29 ms·

The Non-Innovation of Cryptocurrency

61 points by tenslisi 5y ago

redpiller 5y ago
There is innovation in the crypto space but it's not being talked about or covered in mainstream media. Not yet at least. Just because the author has fallen victim to the media oligopoly and is thus unable to see any innovation past all the flashy CNN, Facebook and Cointelegraph interfaces, doesn't mean there is no innovation occuring. I'm involved in an innovative project right now which is creating real world economic value. It's small but we've already proved the concept and are profitable. The blockchain adds undeniable value to our use case. When people finally find out about all the innovation that has been going on outside of their awarenesses, it's going to be a shock and they will regret it.
- faeyanpiraat 5y ago
  Are you sure about that? How did you arrive at the conclusion that it is undeniably a value-add?
  - redpiller 5y ago
    We came up with a way to allow investors to independently verify how much profit a business makes with certainty without having to trust company directors or accountants. Clearly this is a value-add for new/small companies which don't yet have a reputation as it reduces risk for the investor. It's also a value-add for investors of big companies as it prevents them from being mislead about quarterly profits. In our specific case, we applied it to a real estate rental business. We use the token as the primary store of value for the profits of the underlying economic activity. We have a holding company but the share was made worthless as part of the company's memorandum of incorporation. This can be achieved with a couple of simple clauses. The token is a much more transparent and more reliable financial instrument to represent ownership of some economic activity than the share. Being able to then trade it on decentralized exchanges is another advantage but more of a convenience at this stage. The next phase for the community will be to build search engines which can crawl blockchains and decentralized exchanges to find tokenized businesses.
    - timkam 5y ago
      Can you elaborate? I doubt your claim because "how much profit" a business makes is tied to the legal/financial system(s) the business operates in. To me it looks like we have the "object level vs. meta level" fallacy that is so typical for crypto enthusiasts: in the end, what governs our society is not crypto tech (object level), but meta level institutions. And even if these institutions were to agree that, for example, a smart contract is a legal contract, they could still reverse this decisions and hence move the agreement back to the meta level.
      - redpiller 5y ago
        Here is an article about our use case: https://jonathangrosdubois.medium.com/how-leasehold-achieves-decentralization-8e311c6e55f https://jonathangrosdubois.medium.com/how-leasehold-achieves...
        RandomLensman 5y ago
        Maybe I get this wrong, but doesn't this rely very classically on aligned interests and various parts keeping the other parts in check? No blockchain or tokens required... I did not see anything how profit is verified. Could always use expenses to funnel money out, opex and capex are mixed creatively etc.
        redpiller 5y ago
        It costs real money to buy back tokens from the market and to burn them on the blockchain because they are provably scarce. Because new tokens cannot be created, burning them on the blockchain permanently reduces the remaining circulating supply of tokens so the value of remaining tokens goes up (supply versus demand). Someone could potentially funnel money out from the stream of profits but anyone could independently check expected earnings (looking at the assets in the portfolio) against the on-chain buyback amount. At least, it significantly limits how much money can be funnelled out. On the other hand, with a regular company, the directors can make up any numbers on the books and funnel out all of the profits and could keep this going for years undetected. That is far worse. Altogether, it's not 100% trustless but it's orders of magnitude more transparent than a share-based system. As a small business with directors located in different parts of the world (some of which only met over video chat), this model was essential for us to get over the trust hurdle. Now that we can see tokens being bought and burned, it is building trust within the community. Many community members have already sold some tokens back and seen them burned. Some small investors already made a profit over their initial investment and still have half of their tokens left. That said, it's not going to be ideal until we we multiple real estate companies (run by different people) hooked into the LSH blockchain. The more companies there are, the less trust there is.
- yosamino 5y ago
  > When people finally find out about all the innovation that has been going on outside of their awarenesses Do you have some examples of what you mean? Maybe it would be interesting to get into that
- pjkundert 5y ago
  I've been involved in "Crypto" since before Bitcoin (yup), and I never cease to be surprised at the innovation-blindness here on HN! Even clearly obvious disruptions that are already affecting the financial industry (such as DeFi exchanges, etc.), and which signal even greater disruptions to come, are blithely discarded as irrelevant. The abusive treatment of free citizens by the banking system is going to end. "The banks" haven't yet really declared war on Crypto, perhaps because they still feel unassailable in their super-national castles, well beyond the reach of any national law or moral principle. This naiveté will be their downfall, I hope.
ddtaylor 5y ago
This article is borderline fear mongering against cryptocurrency.
- vorexz 5y ago
  Not really
- cinntaile 5y ago
  His website has several such articles about the crypto space,they sometimes end up on HN. He's quite negative towards crypto.
  - jiriknesl 5y ago
    I wouldn't name it quite, from all contents I have read from him, he is fanatically negative towards crypto.
    - cinntaile 5y ago
      It clouds his vision and his arguments unfortunately, it happens on both sides of the debate of course. But it would imo be preferable to see more reasonable debate happening.
      - jiriknesl 5y ago
        For sure. Cryptocurrency community has so many fanatics it's not healthy either. The thing is, some clown shouting diamond hands, HODL, to the moon, won't make it to #10 on HN I guess.
tromp 5y ago
> no purpose other than to enrich the owners of the various casino fiefdoms who issue those tokens That can be argued for coins with premines (such as all PoS coins), but PoW coins with no premine or instamine or dev tax, where all coins go to miners, offer no financial reward to the coin creators. Such coins are rather rare though. And ones that do not handicap later miners relative to early miners even rarer.
- yunohn 5y ago
  > where all coins go to miners, offer no financial reward to the coin creators. Such coins are rather rare though Seems like that’s exactly the problem.
keymone 5y ago
> However bitcoin is a technology which did not arise out of an engineering effort directed towards a specific problem or market inefficiency, but instead out of a anarchist political narrative that views democratic control of the money supply and law enforcement as the problem. omg this is painful. democratic control of money supply? no market inefficiencies? does author live in a separate reality? bitcoin is the biggest invention in financial world since sliced bread - dematerialized, decentralized, censorship resistant, scarce, non-debaseable, with clear issuance schedule, asset and transaction platform with incentive structure that ensures security and functioning for hundred years.
- skohan 5y ago
  I agree that Bitcoin probably has had about as much impact on the financial system as sliced bread.
  - keymone 5y ago
    It’s ok, people like you wondered why would anybody need to speak into a tube with a wire instead of meeting in person, why would anybody send a radio broadcast to nobody in particular, why would anybody send email when post and fax are ubiquitous. Some just need time to process the upside of new tech. But please, write down your thoughts and re-read them every couple years.
    - skohan 5y ago
      All of the technologies you mentioned gained wide adoption much faster than blockchain has. > why would anybody need to speak into a tube with a wire instead of meeting in person I am fairly sure the value proposition of instantaneous vocal communication at a distance was extremely obvious even before the telephone existed.
      - keymone 5y ago
        > technologies you mentioned gained wide adoption much faster than blockchain has They really didn’t, do some research. > value proposition of instantaneous vocal communication at a distance was extremely obvious even before the telephone existed And value proposition of being in full control of your financial assets and ability to transfer them anywhere around the world without intermediaries is not extremely obvious? Give it time, you’ll get it.
mattdesl 5y ago
Blockchains and crypto tech does seem to provide solutions to many challenging problems: distributed ledgers, immutable and decentralized data, ownerless contracts and program execution, secure and decentralized ownership of a digital asset (eg: owning a domain name), programmable free markets, preventing the double spend problem, etc. These may not be problems the author is interested in, but it does not mean the technology as a whole achieves nothing. For what it’s worth: I would welcome more technology and innovations that solves the above problems without the need for casino style speculation and ecologically harmful PoW algorithms.
- mdoms 5y ago
  > Blockchains and crypto tech does seem to provide solutions to many challenging problems: distributed ledgers, immutable and decentralized data, ownerless contracts and program execution, secure and decentralized ownership of a digital asset None of these are real problems. Each and every one was invented as a problem as a post hoc rationalisation for Blockchain technologies.
  - hvidgaard 5y ago
    Many of mans greatest inventions have started like this. Just because we are not aware of a problem today, does not mean it is not there, will not come, or that it can be solved efficiently in other ways.
    - skohan 5y ago
      Blockchain is quite old at this point by technology standards, no? In 2017 there was a ton of attention and funding going into the space - it's not as if there hasn't been the opportunity to do something interesting with blockchain.
      - bhawks 5y ago
        The fine article and your comment both say crypto is 'old' tech. TFA points to iPhone's 2007 release date as if no one (even apple themselves had tried to crack the personal digital assistant before). Which is a laughable omission of history. The first PDA landed in the 80s. Apple started development in 87 on the newton and didn't have a product til 93. The iphone stands on the ashes of 2 decades of product and engineering iterations. The AI winter lasted from 80s until the 2010s. Technology takes time and innovation is a discrete not continuous function. If we all gave up after 10 years we would be sitting in caves and probably not even planting seeds. TFA is full of blustery arguments to say that crypto is a worthless dead end and should be banned deserves more reasoned arguments. Toning down the emotional levels might be a good first step.
CyberRabbi 5y ago
I understand having a negative opinion of crypto but this comes off as nearly totalitarian and tyrannical. The norm for liberal democracies is to regulate moderately and find compromise, not wholesale push a single interested party’s will.
sneak 5y ago
> Ending this scourge on civilization is one of most important political problems facing the international community these days, and marks a new era of global cooperation on financial regulation that now necessarily transcends borders and nations. A very neutral, objective viewpoint. > However bitcoin is a technology which did not arise out of an engineering effort directed towards a specific problem or market inefficiency, but instead out of a anarchist political narrative that views democratic control of the money supply and law enforcement as the problem. A completely false claim. > It is an attempted financial coup by the anarcho-capitalist wing of Silicon Valley to set themselves up as central bankers but without any accountability or democratic oversight. Another completely false claim. > Any non-zero valuation for bitcoin depends on it either yielding some positive cashflows—which is impossible—or depends on an infinite chain of economically irrational actors who will all continue pour money into the scheme ad infinitum irregardless of fundamentals. This one is also objectively false. This article is... not good. There exist some decent criticisms of cryptocurrencies. This article doesn't seem to contain any, and is just the biased ranting of someone who doesn't understand them very well. I flagged it.
- yunohn 5y ago
  Maybe you can explain more, and not just say “objectively false”?
- bryanrasmussen 5y ago
  >> However bitcoin is a technology which did not arise out of an engineering effort directed towards a specific problem or market inefficiency, but instead out of a anarchist political narrative that views democratic control of the money supply and law enforcement as the problem. >A completely false claim. my admittedly not in depth understanding of the history is that it should be written as: Bitcoin as a technology arose out of an engineering effort directed towards solving what its anarchist political creators saw as the problems of democratic control of the money supply and law enforcement. I mean I would say it is false that it did not arise out of an engineering effort to solve a problem, just not a problem that most would agree is much of a problem.
  - 5y ago
neilwilson 5y ago
"There are indeed a lot of fools in this world, but to presume an infinite chain of them as the core of an investment thesis is beyond absurd." It's worked for gold and diamonds for generations. Not to mention pretty much every artwork or other concoction human beings create and then collect. There's not a lot of cash flow from first edition Marvel comics, but there are an awful lot of them stored in plastic bags. Humans collect and value all sorts of stuff for no good reason. Cryptocurrency is no different. It becomes even less of an issue when you realise that we all create 'currency' all the time. It's just an embodiment of a promise to do something in the future. Far more of a unit of account than a thing. The trick is getting other people to accept your currency. Which is a lot easier when you can impose coercive charges on people denominated in that currency - whether that is a tax, or a tithe.
- creshal 5y ago
  Precious metals and gemstones are also physical objects with strong industrial demand, that people hope will survive a civilisatory collapse; blockchain tokens can't even survive a prolonged power outage. Artworks are desirable because they're physical objects with a limited supply that we can use to impress our peers. Memecoin #21983 can't do that. Currencies are also backed by the physical assets of the country/countries issuing them, guaranteeing that you will find a buyer and will get value for it. Worst case, by making the country in question pull a Greece and sell you its lands. Who will give similar guarantees for memecoin #19381?
  - occamrazor 5y ago
    > Precious metals and gemstones are also physical objects with strong industrial demand, that people hope will survive a civilisatory collapse; blockchain tokens can't even survive a prolonged power outage. Industrial demand for natural diamonds is approximately nil, synthetic ones are cheaper and have better properties. Industrial demand for gold is larger, but it wouldn’t remain that large in case of societal collapse. > Artworks are desirable because they're physical objects with a limited supply that we can use to impress our peers. Memecoin #21983 can't do that. The NFT mania (and CryptoKitties before that) have shown that at least some people are impressed by it and are willing to pay for it. I don’t get it either, but I can’t deny it’s happening. > Currencies are also backed by the physical assets of the country/countries issuing them, guaranteeing that you will find a buyer and will get value for it. Worst case, by making the country in question pull a Greece and sell you its lands. Who will give similar guarantees for memecoin #19381? Greece could not devalue the Euro unilaterally. Investors in Argentinian bonds had a different experience.
lambdaphagy 5y ago
> scourge on civilization international community a fight for the cause of democratic norms rules-based international order consistent pushback “innovation” mistaken beliefs and not supported by any evidence quirky ideas chattering class “the potential for innovation” amorphous and hand-wavy rhetorical gestures a anarchist political narrative Private entities now wish to disrupt the global international order attempted financial coup anarcho-capitalist wing of Silicon Valley something so unregulated and volatile ideological purpose crypto acolytes cling to this narrative misplaced faith magical thinking and unspecified means or empty appeals failed narrative seemingly plausible zero evidence token schemes failed narrative highly irrational infinite chain of economically irrational actors greater pools of fools into the scheme Ponzi scheme laughable absurd to think systemic misunderstanding absurdly small original sin bluster amazing solution for nothing non-existent problems they don’t understand extremely byzantine Rube Goldberg-esque slot machines casino fiefdoms money laundering, ransomware criminality dark money veneer of gambling false claims zero evidence environmental devastation increasingly frothy ecosystem of scams to defraud the public
jiriknesl 5y ago
> The notion that these technologies can transform financial services in any way is laughable, because there is no mechanism or specific problem they aim to address that is not currently better done with a simpler solution. Well, he hasn't obviously tried to send money from Europe to Latin America. On $2000 transaction. $25-40 bank transfer (takes up to 5 days). $80 Payoneer (can be fast, but can also take 2 days) $1 Bitcoin (4 hours)
- weikju 5y ago
  How much to get your $2000 in and out of a bitcoin wallet/exchange?
  - jiriknesl 5y ago
    It depends on exchange. Each has different fees. Also, as Bitcoin is deflationary, in those 5 years, I usually got more than $2000. But this is I guess just temporary. And if Bitcoin will grow, it will stabilize (probably) and interfacing with the world will get cheaper (both exchange to fiat or buying directly for cryptocurrencies or cryptocurrency-backed payment card).
  - mclightning 5y ago
    some exchanges offer credit cards which means you can use the amount directly.
- rostigerpudel 5y ago
  Just looked it up for Western Union: To transfer 2000€ from Germany to a Chilean bank account, you pay a fee of 0.90€. The currency exchange spread adds 13.32€ to the costs. Transfer time is between 0-4 work days. If you want to have cash in hand within minutes, they offer that too, albeit with a hefty surcharge. With Bitcoin, you have to pay an on-ramp and an off-ramp because EUR->Bitcoin->CLP, which will be hard to get done cheaper than the WU currency exchange spread (introductory offers don't count, so keep your anecdote). Given current Bitcoin volatility you need to do the currency exchange quickly or you may have a hodl moment and have to wait for Bitcoin to regain its value. I really fail to see where the great savings from carrying out such a transaction via Bitcoin are supposed to come from, in particular when take into account the number of intermediaries I have to interact with and trust and the technical complexity involved in handling Bitcoin. People are always willing to pay a small fee for comfort and security.
mypastself 5y ago
> Ending this scourge on civilization is one of most important political problems facing the international community these days What is it about this topic that always brings out the most extreme voices on either side? It seems like both proponents and detractors wildly overestimate the technology’s importance. This particular blog post drops the above quoted bomb right at the start, and then goes on to argue the comparatively irrelevant question of innovation instead. I’d love to read a well argued post about how exactly blockchain destroys civilization (or saves it, for that matter).
- creshal 5y ago
  PoW undermines our attempts to fight climate change, there's tons of examples of fossil fuel power plants being used for the sole purpose of running "crypto" "currencies". That is a very direct threat to our survival as a species. Additionally, unregulated currency in general undermines the international political system itself, by allowing rogue states and terrorist organisations to completely bypass attempts at embargoing them. Or in case of organisations like the CIA, any attempts at governmental oversight – the situation was already bad before bitcoin, it's completely hopeless now.
  - mypastself 5y ago
    It seems to me the technology is one of the contributors/facilitators in both those cases, rather than the cause. Surely the main scourge in your first paragraph are the fossil fuel power plants? Do you think either of these problems would be resolved or even significantly mitigated if cryptocurrencies were banned?
    - creshal 5y ago
      When already decommissioned fossil power plants get reactivated to mine bitcoin, I think it's safe to say that a ban of cryptocurrencies would have a significant impact.
      - mypastself 5y ago
Gatsky 5y ago
> These days I spend a great deal of my time writing about and helping inform public policy on the global cryptocurrency crackdown. Ending this scourge on civilization is one of most important political problems facing the international community these days, and marks a new era of global cooperation on financial regulation that now necessarily transcends borders and nations. The fight against cryptocurrency and ransomware is now a fight for the cause of democratic norms and the continuation of the rules-based international order. I have never met this person, but I am certain I would not enjoy a conversation with them.
denton-scratch 5y ago
> circumventing the rule of law I'll risk some karma here (I don't place a high value on it!) A major use of cryptocurrencies is for drug-dealing. That is trade, and trade is normally considered to be a good thing, economically. The "rule of law" makes possible the (non-violent) enforcement of contracts, so it facilitates trade. But it's prefectly possible to trade without relying on access to courts; in many places, the courts are corrupt, or the system is so slow as to be useless. But trade goes on. I'm stuck to think of any other way in which the "rule of law" confers economic value, and the war against drugs clearly reduces economic output. I'm not taking a position on whether the drugs trade is more or less reprehensible than (e.g.) the trade in fossil fuels. But it happens, and it's been happening ever since Prohibition and Reefer Madness; apparently "rule of law" doesn't rule very effectively.
riskneutral 5y ago
> The saving grace of this situation is the technology being proposed to do this is neither robust nor particularly useful at achieving their stated political goals. Yes but we know that technology can improve over time. Given the amount of capital being poured into cryptocurrency, it is reasonable to expect that cryptocurrency technology could get better at achieving its stated goals. It could get dramatically better. The technology is based on cryptography and open source code, trying to ban it would be like trying to ban drugs or guns (good luck).

61 points by tenslisi 5y ago

There is innovation in the crypto space but it's not being talked about or covered in mainstream media. Not yet at least. Just because the author has fallen victim to the media oligopoly and is thus unable to see any innovation past all the flashy CNN, Facebook and Cointelegraph interfaces, doesn't mean there is no innovation occuring. I'm involved in an innovative project right now which is creating real world economic value. It's small but we've already proved the concept and are profitable. The blockchain adds undeniable value to our use case. When people finally find out about all the innovation that has been going on outside of their awarenesses, it's going to be a shock and they will regret it.

faeyanpiraat 5y ago
Are you sure about that? How did you arrive at the conclusion that it is undeniably a value-add?
- redpiller 5y ago
  We came up with a way to allow investors to independently verify how much profit a business makes with certainty without having to trust company directors or accountants. Clearly this is a value-add for new/small companies which don't yet have a reputation as it reduces risk for the investor. It's also a value-add for investors of big companies as it prevents them from being mislead about quarterly profits. In our specific case, we applied it to a real estate rental business. We use the token as the primary store of value for the profits of the underlying economic activity. We have a holding company but the share was made worthless as part of the company's memorandum of incorporation. This can be achieved with a couple of simple clauses. The token is a much more transparent and more reliable financial instrument to represent ownership of some economic activity than the share. Being able to then trade it on decentralized exchanges is another advantage but more of a convenience at this stage. The next phase for the community will be to build search engines which can crawl blockchains and decentralized exchanges to find tokenized businesses.
  - timkam 5y ago
    Can you elaborate? I doubt your claim because "how much profit" a business makes is tied to the legal/financial system(s) the business operates in. To me it looks like we have the "object level vs. meta level" fallacy that is so typical for crypto enthusiasts: in the end, what governs our society is not crypto tech (object level), but meta level institutions. And even if these institutions were to agree that, for example, a smart contract is a legal contract, they could still reverse this decisions and hence move the agreement back to the meta level.
    - redpiller 5y ago
      Here is an article about our use case: https://jonathangrosdubois.medium.com/how-leasehold-achieves-decentralization-8e311c6e55f https://jonathangrosdubois.medium.com/how-leasehold-achieves...
      - RandomLensman 5y ago
        Maybe I get this wrong, but doesn't this rely very classically on aligned interests and various parts keeping the other parts in check? No blockchain or tokens required... I did not see anything how profit is verified. Could always use expenses to funnel money out, opex and capex are mixed creatively etc.
        redpiller 5y ago
        It costs real money to buy back tokens from the market and to burn them on the blockchain because they are provably scarce. Because new tokens cannot be created, burning them on the blockchain permanently reduces the remaining circulating supply of tokens so the value of remaining tokens goes up (supply versus demand). Someone could potentially funnel money out from the stream of profits but anyone could independently check expected earnings (looking at the assets in the portfolio) against the on-chain buyback amount. At least, it significantly limits how much money can be funnelled out. On the other hand, with a regular company, the directors can make up any numbers on the books and funnel out all of the profits and could keep this going for years undetected. That is far worse. Altogether, it's not 100% trustless but it's orders of magnitude more transparent than a share-based system. As a small business with directors located in different parts of the world (some of which only met over video chat), this model was essential for us to get over the trust hurdle. Now that we can see tokens being bought and burned, it is building trust within the community. Many community members have already sold some tokens back and seen them burned. Some small investors already made a profit over their initial investment and still have half of their tokens left. That said, it's not going to be ideal until we we multiple real estate companies (run by different people) hooked into the LSH blockchain. The more companies there are, the less trust there is.
yosamino 5y ago
> When people finally find out about all the innovation that has been going on outside of their awarenesses Do you have some examples of what you mean? Maybe it would be interesting to get into that
pjkundert 5y ago
I've been involved in "Crypto" since before Bitcoin (yup), and I never cease to be surprised at the innovation-blindness here on HN! Even clearly obvious disruptions that are already affecting the financial industry (such as DeFi exchanges, etc.), and which signal even greater disruptions to come, are blithely discarded as irrelevant. The abusive treatment of free citizens by the banking system is going to end. "The banks" haven't yet really declared war on Crypto, perhaps because they still feel unassailable in their super-national castles, well beyond the reach of any national law or moral principle. This naiveté will be their downfall, I hope.

ddtaylor 5y ago

This article is borderline fear mongering against cryptocurrency.

vorexz 5y ago
Not really
cinntaile 5y ago
His website has several such articles about the crypto space,they sometimes end up on HN. He's quite negative towards crypto.
- jiriknesl 5y ago
  I wouldn't name it quite, from all contents I have read from him, he is fanatically negative towards crypto.
  - cinntaile 5y ago
    It clouds his vision and his arguments unfortunately, it happens on both sides of the debate of course. But it would imo be preferable to see more reasonable debate happening.
    - jiriknesl 5y ago
      For sure. Cryptocurrency community has so many fanatics it's not healthy either. The thing is, some clown shouting diamond hands, HODL, to the moon, won't make it to #10 on HN I guess.

tromp 5y ago

> no purpose other than to enrich the owners of the various casino fiefdoms who issue those tokens That can be argued for coins with premines (such as all PoS coins), but PoW coins with no premine or instamine or dev tax, where all coins go to miners, offer no financial reward to the coin creators. Such coins are rather rare though. And ones that do not handicap later miners relative to early miners even rarer.

yunohn 5y ago
> where all coins go to miners, offer no financial reward to the coin creators. Such coins are rather rare though Seems like that’s exactly the problem.

keymone 5y ago

> However bitcoin is a technology which did not arise out of an engineering effort directed towards a specific problem or market inefficiency, but instead out of a anarchist political narrative that views democratic control of the money supply and law enforcement as the problem. omg this is painful. democratic control of money supply? no market inefficiencies? does author live in a separate reality? bitcoin is the biggest invention in financial world since sliced bread - dematerialized, decentralized, censorship resistant, scarce, non-debaseable, with clear issuance schedule, asset and transaction platform with incentive structure that ensures security and functioning for hundred years.

skohan 5y ago
I agree that Bitcoin probably has had about as much impact on the financial system as sliced bread.
- keymone 5y ago
  It’s ok, people like you wondered why would anybody need to speak into a tube with a wire instead of meeting in person, why would anybody send a radio broadcast to nobody in particular, why would anybody send email when post and fax are ubiquitous. Some just need time to process the upside of new tech. But please, write down your thoughts and re-read them every couple years.
  - skohan 5y ago
    All of the technologies you mentioned gained wide adoption much faster than blockchain has. > why would anybody need to speak into a tube with a wire instead of meeting in person I am fairly sure the value proposition of instantaneous vocal communication at a distance was extremely obvious even before the telephone existed.
    - keymone 5y ago
      > technologies you mentioned gained wide adoption much faster than blockchain has They really didn’t, do some research. > value proposition of instantaneous vocal communication at a distance was extremely obvious even before the telephone existed And value proposition of being in full control of your financial assets and ability to transfer them anywhere around the world without intermediaries is not extremely obvious? Give it time, you’ll get it.

mattdesl 5y ago

Blockchains and crypto tech does seem to provide solutions to many challenging problems: distributed ledgers, immutable and decentralized data, ownerless contracts and program execution, secure and decentralized ownership of a digital asset (eg: owning a domain name), programmable free markets, preventing the double spend problem, etc. These may not be problems the author is interested in, but it does not mean the technology as a whole achieves nothing. For what it’s worth: I would welcome more technology and innovations that solves the above problems without the need for casino style speculation and ecologically harmful PoW algorithms.

mdoms 5y ago
> Blockchains and crypto tech does seem to provide solutions to many challenging problems: distributed ledgers, immutable and decentralized data, ownerless contracts and program execution, secure and decentralized ownership of a digital asset None of these are real problems. Each and every one was invented as a problem as a post hoc rationalisation for Blockchain technologies.
- hvidgaard 5y ago
  Many of mans greatest inventions have started like this. Just because we are not aware of a problem today, does not mean it is not there, will not come, or that it can be solved efficiently in other ways.
  - skohan 5y ago
    Blockchain is quite old at this point by technology standards, no? In 2017 there was a ton of attention and funding going into the space - it's not as if there hasn't been the opportunity to do something interesting with blockchain.
    - bhawks 5y ago
      The fine article and your comment both say crypto is 'old' tech. TFA points to iPhone's 2007 release date as if no one (even apple themselves had tried to crack the personal digital assistant before). Which is a laughable omission of history. The first PDA landed in the 80s. Apple started development in 87 on the newton and didn't have a product til 93. The iphone stands on the ashes of 2 decades of product and engineering iterations. The AI winter lasted from 80s until the 2010s. Technology takes time and innovation is a discrete not continuous function. If we all gave up after 10 years we would be sitting in caves and probably not even planting seeds. TFA is full of blustery arguments to say that crypto is a worthless dead end and should be banned deserves more reasoned arguments. Toning down the emotional levels might be a good first step.

CyberRabbi 5y ago

I understand having a negative opinion of crypto but this comes off as nearly totalitarian and tyrannical. The norm for liberal democracies is to regulate moderately and find compromise, not wholesale push a single interested party’s will.

sneak 5y ago

> Ending this scourge on civilization is one of most important political problems facing the international community these days, and marks a new era of global cooperation on financial regulation that now necessarily transcends borders and nations. A very neutral, objective viewpoint. > However bitcoin is a technology which did not arise out of an engineering effort directed towards a specific problem or market inefficiency, but instead out of a anarchist political narrative that views democratic control of the money supply and law enforcement as the problem. A completely false claim. > It is an attempted financial coup by the anarcho-capitalist wing of Silicon Valley to set themselves up as central bankers but without any accountability or democratic oversight. Another completely false claim. > Any non-zero valuation for bitcoin depends on it either yielding some positive cashflows—which is impossible—or depends on an infinite chain of economically irrational actors who will all continue pour money into the scheme ad infinitum irregardless of fundamentals. This one is also objectively false. This article is... not good. There exist some decent criticisms of cryptocurrencies. This article doesn't seem to contain any, and is just the biased ranting of someone who doesn't understand them very well. I flagged it.

yunohn 5y ago
Maybe you can explain more, and not just say “objectively false”?
bryanrasmussen 5y ago
>> However bitcoin is a technology which did not arise out of an engineering effort directed towards a specific problem or market inefficiency, but instead out of a anarchist political narrative that views democratic control of the money supply and law enforcement as the problem. >A completely false claim. my admittedly not in depth understanding of the history is that it should be written as: Bitcoin as a technology arose out of an engineering effort directed towards solving what its anarchist political creators saw as the problems of democratic control of the money supply and law enforcement. I mean I would say it is false that it did not arise out of an engineering effort to solve a problem, just not a problem that most would agree is much of a problem.
- 5y ago

neilwilson 5y ago

"There are indeed a lot of fools in this world, but to presume an infinite chain of them as the core of an investment thesis is beyond absurd." It's worked for gold and diamonds for generations. Not to mention pretty much every artwork or other concoction human beings create and then collect. There's not a lot of cash flow from first edition Marvel comics, but there are an awful lot of them stored in plastic bags. Humans collect and value all sorts of stuff for no good reason. Cryptocurrency is no different. It becomes even less of an issue when you realise that we all create 'currency' all the time. It's just an embodiment of a promise to do something in the future. Far more of a unit of account than a thing. The trick is getting other people to accept your currency. Which is a lot easier when you can impose coercive charges on people denominated in that currency - whether that is a tax, or a tithe.

creshal 5y ago
Precious metals and gemstones are also physical objects with strong industrial demand, that people hope will survive a civilisatory collapse; blockchain tokens can't even survive a prolonged power outage. Artworks are desirable because they're physical objects with a limited supply that we can use to impress our peers. Memecoin #21983 can't do that. Currencies are also backed by the physical assets of the country/countries issuing them, guaranteeing that you will find a buyer and will get value for it. Worst case, by making the country in question pull a Greece and sell you its lands. Who will give similar guarantees for memecoin #19381?
- occamrazor 5y ago
  > Precious metals and gemstones are also physical objects with strong industrial demand, that people hope will survive a civilisatory collapse; blockchain tokens can't even survive a prolonged power outage. Industrial demand for natural diamonds is approximately nil, synthetic ones are cheaper and have better properties. Industrial demand for gold is larger, but it wouldn’t remain that large in case of societal collapse. > Artworks are desirable because they're physical objects with a limited supply that we can use to impress our peers. Memecoin #21983 can't do that. The NFT mania (and CryptoKitties before that) have shown that at least some people are impressed by it and are willing to pay for it. I don’t get it either, but I can’t deny it’s happening. > Currencies are also backed by the physical assets of the country/countries issuing them, guaranteeing that you will find a buyer and will get value for it. Worst case, by making the country in question pull a Greece and sell you its lands. Who will give similar guarantees for memecoin #19381? Greece could not devalue the Euro unilaterally. Investors in Argentinian bonds had a different experience.

lambdaphagy 5y ago

> scourge on civilization international community a fight for the cause of democratic norms rules-based international order consistent pushback “innovation” mistaken beliefs and not supported by any evidence quirky ideas chattering class “the potential for innovation” amorphous and hand-wavy rhetorical gestures a anarchist political narrative Private entities now wish to disrupt the global international order attempted financial coup anarcho-capitalist wing of Silicon Valley something so unregulated and volatile ideological purpose crypto acolytes cling to this narrative misplaced faith magical thinking and unspecified means or empty appeals failed narrative seemingly plausible zero evidence token schemes failed narrative highly irrational infinite chain of economically irrational actors greater pools of fools into the scheme Ponzi scheme laughable absurd to think systemic misunderstanding absurdly small original sin bluster amazing solution for nothing non-existent problems they don’t understand extremely byzantine Rube Goldberg-esque slot machines casino fiefdoms money laundering, ransomware criminality dark money veneer of gambling false claims zero evidence environmental devastation increasingly frothy ecosystem of scams to defraud the public

jiriknesl 5y ago

> The notion that these technologies can transform financial services in any way is laughable, because there is no mechanism or specific problem they aim to address that is not currently better done with a simpler solution. Well, he hasn't obviously tried to send money from Europe to Latin America. On $2000 transaction. $25-40 bank transfer (takes up to 5 days). $80 Payoneer (can be fast, but can also take 2 days) $1 Bitcoin (4 hours)

weikju 5y ago
How much to get your $2000 in and out of a bitcoin wallet/exchange?
- jiriknesl 5y ago
  It depends on exchange. Each has different fees. Also, as Bitcoin is deflationary, in those 5 years, I usually got more than $2000. But this is I guess just temporary. And if Bitcoin will grow, it will stabilize (probably) and interfacing with the world will get cheaper (both exchange to fiat or buying directly for cryptocurrencies or cryptocurrency-backed payment card).
- mclightning 5y ago
  some exchanges offer credit cards which means you can use the amount directly.
rostigerpudel 5y ago
Just looked it up for Western Union: To transfer 2000€ from Germany to a Chilean bank account, you pay a fee of 0.90€. The currency exchange spread adds 13.32€ to the costs. Transfer time is between 0-4 work days. If you want to have cash in hand within minutes, they offer that too, albeit with a hefty surcharge. With Bitcoin, you have to pay an on-ramp and an off-ramp because EUR->Bitcoin->CLP, which will be hard to get done cheaper than the WU currency exchange spread (introductory offers don't count, so keep your anecdote). Given current Bitcoin volatility you need to do the currency exchange quickly or you may have a hodl moment and have to wait for Bitcoin to regain its value. I really fail to see where the great savings from carrying out such a transaction via Bitcoin are supposed to come from, in particular when take into account the number of intermediaries I have to interact with and trust and the technical complexity involved in handling Bitcoin. People are always willing to pay a small fee for comfort and security.

mypastself 5y ago

> Ending this scourge on civilization is one of most important political problems facing the international community these days What is it about this topic that always brings out the most extreme voices on either side? It seems like both proponents and detractors wildly overestimate the technology’s importance. This particular blog post drops the above quoted bomb right at the start, and then goes on to argue the comparatively irrelevant question of innovation instead. I’d love to read a well argued post about how exactly blockchain destroys civilization (or saves it, for that matter).

creshal 5y ago
PoW undermines our attempts to fight climate change, there's tons of examples of fossil fuel power plants being used for the sole purpose of running "crypto" "currencies". That is a very direct threat to our survival as a species. Additionally, unregulated currency in general undermines the international political system itself, by allowing rogue states and terrorist organisations to completely bypass attempts at embargoing them. Or in case of organisations like the CIA, any attempts at governmental oversight – the situation was already bad before bitcoin, it's completely hopeless now.
- mypastself 5y ago
  It seems to me the technology is one of the contributors/facilitators in both those cases, rather than the cause. Surely the main scourge in your first paragraph are the fossil fuel power plants? Do you think either of these problems would be resolved or even significantly mitigated if cryptocurrencies were banned?
  - creshal 5y ago
    When already decommissioned fossil power plants get reactivated to mine bitcoin, I think it's safe to say that a ban of cryptocurrencies would have a significant impact.
    - mypastself 5y ago

Gatsky 5y ago

> These days I spend a great deal of my time writing about and helping inform public policy on the global cryptocurrency crackdown. Ending this scourge on civilization is one of most important political problems facing the international community these days, and marks a new era of global cooperation on financial regulation that now necessarily transcends borders and nations. The fight against cryptocurrency and ransomware is now a fight for the cause of democratic norms and the continuation of the rules-based international order. I have never met this person, but I am certain I would not enjoy a conversation with them.

denton-scratch 5y ago

> circumventing the rule of law I'll risk some karma here (I don't place a high value on it!) A major use of cryptocurrencies is for drug-dealing. That is trade, and trade is normally considered to be a good thing, economically. The "rule of law" makes possible the (non-violent) enforcement of contracts, so it facilitates trade. But it's prefectly possible to trade without relying on access to courts; in many places, the courts are corrupt, or the system is so slow as to be useless. But trade goes on. I'm stuck to think of any other way in which the "rule of law" confers economic value, and the war against drugs clearly reduces economic output. I'm not taking a position on whether the drugs trade is more or less reprehensible than (e.g.) the trade in fossil fuels. But it happens, and it's been happening ever since Prohibition and Reefer Madness; apparently "rule of law" doesn't rule very effectively.

riskneutral 5y ago

> The saving grace of this situation is the technology being proposed to do this is neither robust nor particularly useful at achieving their stated political goals. Yes but we know that technology can improve over time. Given the amount of capital being poured into cryptocurrency, it is reasonable to expect that cryptocurrency technology could get better at achieving its stated goals. It could get dramatically better. The technology is based on cryptography and open source code, trying to ban it would be like trying to ban drugs or guns (good luck).