8 ms·

The crypto movement is destroying itself

63 points by edward 5y ago

Proven 5y ago
Hah, not that Tether crap again (in TFA)!!! The author completely misunderstands not only Bitcoin, but also economics. To mention just one point, where he complains how only 10,000 addresses (which could be 10K or fewer people and organizations) own 60% of bitcoin. How does it matter to me as a saver or user of money, how many people own how much gold, or silver? It doesn't matter at all. I acquire it at market price, I hold it, and then I sell it at market price. Bitcoin is a failed cryptocurrency, but for completely unrelated reasons and you won't read about that in the author's blog - that's for sure.
gerikson 5y ago
Sounds like they should lay off the Concoda, it sounds dangerous.
- romwell 5y ago
  Yup, I hope the title gets fixed to not say that Concoda is how the movement is destroying itself :)
tracedddd 5y ago
Fixing wealth equality was never a narrative. In fact wealth incentives favoring early adopters were built in day 0. It’s impossible and maddening to keep the “movement” on track in messaging. Every era is less educated technically and cares less about ideological or political goals and more about the bottom line of making some wealth. So of course the movement is diluted. Influencers are rarely true cypherpunks and are the loudest by profession. But it doesn’t mean it isn’t working. IMHO the traditional finance system has only gotten more troubling since Satoshi’s whitepaper while crypto has grown more and more capable. It’s true there have been new challenges that have emerged, some of which are still ongoing, but that’s part of growth.
- fossuser 5y ago
  Yeah - I started off cautiously optimistic, but I've gotten more and more confident in its long term future. The DeFi tech is real, but early. Vitalik Buterin is a really good leader for Ethereum and development. Vitalik Interview: https://www.stitcher.com/show/rationally-speaking/episode/intellectual-honesty-cryptocurrency-more-vitalik-buterin-82142288 https://www.stitcher.com/show/rationally-speaking/episode/in... This is a worthwhile list to read through: https://danromero.org/crypto-reading/ https://danromero.org/crypto-reading/ The main issue for outsiders is that the industry is surrounded by snake oil salesman and people that don't know what they're talking about (the 'evil central bank' types), but the underlying tech is real and the potential is real (imo). If you look at it quickly you might dismiss it all, but I think that'd be a mistake. The ability to manage decentralized state is very cool, but there's a lot to build to make it viable (and as a result, there's a lot of opportunity). When something is hard, there's often value in making it easier. There's also a lot of stuff in legacy finance that requires humans to do and is slow. Multi-day financial transfers for clearing and high associated fees for wires (at some banks) - crypto options are much better and modern implementations of the legacy stack. The current state is still a bit unstable, and the UX is a disaster, but the future is clearly better (imo) in a way legacy systems will have trouble competing with. As an aside, 'wealth inequality' is a feature you want in effective capitalist systems (you can still protect the lower bound). http://paulgraham.com/ineq.html http://paulgraham.com/ineq.html In 1999 a lot of people recognized the value of the internet (though many still dismissed it [0]), but there was also a lot of dumb money and failure - loud people who didn't know what was going on. The web obviously became extremely economically relevant despite all of that. There's some similar potential here - I think it'll just take a while to shake out. [0] "By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s." -Paul Krugman (1998) Irony of the above quote is it's wrong on two levels - the internet, but also the impact of the fax machine (also huge).
  - rawtxapp 5y ago
    Yes, the loud mouths on twitter and other social networks are definitely a turn-off and pretty annoying. For anyone who's looking into more serious/technical discussions, I think looking through github contributions, whitepapers, technical parts of bitcointalk and in depth interviews of legitimate contributors to the ecosystem (like Vitalik) is much more informative and has better signal to noise ratios.
codethief 5y ago
I largely enjoyed reading the article but: > Out of the tools we possess to rid the system of crony capitalism, crypto is still our best shot. What in the DNA of "crypto" suggests that it would ever rid us of "crony capitalism"? Did I not get the memo?
- skulk 5y ago
  Full transparency is in the "DNA of crypto" imo, and shady dealings being out in the open is definitely a check against "crony capitalism." However, beyond the surface, claiming that crypto will clean up corruption is laughable.
  - tome 5y ago
    To what extent is Tether "out in the open"?
  - arcticbull 5y ago
    It's really not - that's just marketing. The reality of the blockchain is that its guarantees only extend to what can be wholly represented and encapsulated on-chain. That's why only abstract/fiat currencies have emerged after 14 years of research as viable use cases. The boundary between the chain and reality is where these guarantees break down. The blockchain cannot guarantee the reserves in Tether's bank account. That's not transparency, that's the illusion of transparency. That's much worse than intentional opacity IMO since it throws people off the trail.
- Finnucane 5y ago
  This is not even really a surprising result. Bitcoin is not designed to be a functional currency in any modern sense. It's never going to be the basis of a complex, large economy. It is far too inflexible and inefficient. It is designed to be a hoardable asset, as long as you can keep convincing people to pay into the system. The lack of government oversight and control obviously appeals to the criminal and the corporate mobsters.
  - ipaddr 5y ago
arcticbull 5y ago
I love that they included Stuart Hoegner's tweet. Hoegner is a hilarious villain, sort of the Saul Goodman of Bitfinex/Tether (he's their GC). He was the head of compliance at Excapa, the parent company of the wildly non-compliant Ultimate Bet. That online poker site had a back door where some of their friends could see other poker players cards [1] Seeing him call anyone a liar - as he does regularly - is downright hilarious. After all, at one point he had all of Tether's entire backing dollars (a small fraction of outstanding USDT) with his personal funds in his Bank of Montreal account. [2] [1] https://bennettftomlin.com/2021/03/27/before-bitfinex-and-tether/ https://bennettftomlin.com/2021/03/27/before-bitfinex-and-te... [2] https://ag.ny.gov/sites/default/files/2021.02.17_-_settlement_agreement_-_execution_version.b-t_signed-c2_oag_signed.pdf https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen... section 17.
- WalterBright 5y ago
  > some of their friends could see other poker players cards Anyone who plays online poker for money is naive. The temptation for the programmers of such systems to cheat has to be enormous.
  - jazzyjackson 5y ago
    Now that’s a system I’d like to see some innovation on: a smart contract card dealer that manages to keep your hand secret. Would be a great demo for a privacy coin.
    - lostmsu 5y ago
      Or a zero knowlege game.
  - noxer 5y ago
    But decentral system are useless and everything works better if centralized ryt? Funny how "blockchains" solve problems exactly like the one you just pointed out.
    - 5y ago
wedn3sday 5y ago
All cryptobucks are pyramid schemes.
- erdos4d 5y ago
  Many are, and in the early days this statement was mostly true, but today there are many legitimate uses for cryptocurrency. In Latin America for instance it is becoming increasingly common to use cryptocurrency for remittance payments, because it is way more efficient than international bank transfers with no questions asked to boot. I expect this trend will eventually start wider adoption by the broader merchant community here, as more people are coming into contact with cryptocurrency in this fashion.
  - wedn3sday 5y ago
    "no questions asked" like, "how did you earn this?" and "did you pay taxes on this income?". I agree that cyberbucks are great for laundering drug money and avoiding taxes.
c7DJTLrn 5y ago
Cryptocurrency has no real world utility. It's a tool for gambling, speculative investment, and pump-and-dump schemes. There, I said it. I was an Ethereum enthusiast back in 2017, but it didn't take long for me to see that cryptocurrency as it stands will never work. Smart contracts are too fragile, trading is too inaccessible, and keeping assets safe is too difficult. There has been barely any innovation in scalability over the years, and I'm wondering if that's because proof of work has become too big to fail. Too profitable for it to end.
- Bombthecat 5y ago
  I think, smart contracts work, but only the super simple ones. Everything else is proned for bugs
  - root_axis 5y ago
    Smart contracts also have near (but not completely) zero utility since they're only useful when applied to entities that are entirely contained on the blockchain.
    - hanniabu 5y ago
      Lol all your comments scream bitcoin maxi
  - hanniabu 5y ago
    That's a property of software in general
- arcticbull 5y ago
  The big challenge is actually the set of core features: decentralization, trustlessness and permissionlessness. These are the features that allow the pricing to be manipulated beyond any semblance of connection to reality. Any number you see, any stat you see, any data presented to you is likely fake. This is made possible because of trustlessness, permissionlessness and decentralization. Nobody can stop it by design. 95% of all trading volume is fake. Exchanges fake volume to draw in new gamblers. [1] The pricing is determined by Tethers, which account for 65% of all trading volume [2, 3] but are backed by $0.03USD per USDT and hot air and are not redeemable by anyone [4]. Even USDC is now backed by "approved investments" instead of dollars [5]. That's just a small sliver. Aparently 1/3 of all small and medium businesses in America accept crypto! Fun fact. Are you sure? Because I haven't seen a single one. [6] The actual market is roughly speaking totally unrecognizable. The only thing we know for a fact is that new money has to come into PoW coins equal to the cost of mining just to keep the price stable. Anything above and beyond that is almost impossible to know for sure. This is what libertarianism looks like (humorous take [7]). It kinda sucks. [1] https://www.forbes.com/sites/cbovaird/2019/03/22/95-of-reported-bitcoin-trading-volume-is-fake-says-bitwise/ https://www.forbes.com/sites/cbovaird/2019/03/22/95-of-repor... [2] https://onlinelibrary.wiley.com/doi/full/10.1111/jofi.12903 https://onlinelibrary.wiley.com/doi/full/10.1111/jofi.12903 [3] https://coinlib.io/coin/BTC/Bitcoin https://coinlib.io/coin/BTC/Bitcoin - among others. [4] https://www.ft.com/content/529eb4e6-796a-4e81-8064-5967bbe3b4d9 https://www.ft.com/content/529eb4e6-796a-4e81-8064-5967bbe3b... [5] https://www.coindesk.com/circle-is-not-winning-stablecoin-transparancy-race https://www.coindesk.com/circle-is-not-winning-stablecoin-tr... [6] https://bitcoinist.com/36-of-u-s-smes-accept-cryptocurrency-payments/ https://bitcoinist.com/36-of-u-s-smes-accept-cryptocurrency-... [7] https://www.newyorker.com/humor/daily-shouts/l-p-d-libertarian-police-department https://www.newyorker.com/humor/daily-shouts/l-p-d-libertari...
smoldesu 5y ago
I love reading articles like this. Not because I'm going long on crypto or anything, but because the market needs a crash. If we can't shake off Wall Street, there will be no democratization of finance. If crypto crashes now, I'd feel much better about the future of digital currency.
- c7DJTLrn 5y ago
  I've been waiting for a crash for years so that the parasites looking to "get rich quick" leave and the discussion can return to technical matters like privacy, scalability, and ease of use instead of Elon Musk's latest cryptocurrency-related tweets and the coin value. For the past ~8 years the discourse has been significantly focused on the latter.
- gruez 5y ago
  >Not because I'm going long on crypto or anything, but because the market needs a crash The recent drop didn't count as a crash?
  - jazzyjackson 5y ago
    It’s still higher than it ever was before 2021 from a quick perusal of the Google chart for BTC, so I think if you bought your Bitcoin before then, this year might just be called “volatile”
    - gruez 5y ago
      That doesn't that describe the price trend of all bitcoin bubbles? It goes up, crashes, but always higher than the prior all-time high.
birthday 5y ago
Why can there be no rich bitcoin holders? Sure you want coins distributed to some degree, but the mere fact that there are rich and poor bitcoin holders is natural and expected. And they will be the minority (less than 10 000).
- arcticbull 5y ago
  There certainly can, however crypto has a worse wealth distribution than the US dollar and any banana republic. Freeing the poor from the tyranny of wealth inequality was one of the flagship features the community has been touting for a decade. The claims do not align with reality, and are likely antithetical to the goals of a functioning, efficient, equitable society. The world would be worse off with such a distribution, IMO. For the record, I'm pro wealth inequality and income inequality, so long as its coupled with social mobility and a high standard of living for the lower classes.
  - gruez 5y ago
    >Freeing the poor from the tyranny of wealth inequality was one of the flagship features the community has been touting for a decade. It has?
    - arcticbull 5y ago
      I mean I've heard it many times [1, 2, 3, 4]. You're welcome to call that anecodta. The reality is quite the opposite of the narrative. [5] [1] [2018] https://www.washingtonpost.com/news/theworldpost/wp/2018/01/29/blockchain/ https://www.washingtonpost.com/news/theworldpost/wp/2018/01/... [2] [2018] https://medium.com/predict/how-bitcoin-solves-the-problem-of-the-worlds-unbanked-poor-ad2f76d7e368 https://medium.com/predict/how-bitcoin-solves-the-problem-of... [3] [2019] https://www.businessinsider.com/this-is-how-bitcoin-can-end-income-inequality-in-2020 https://www.businessinsider.com/this-is-how-bitcoin-can-end-... [4] [2021] https://www.forbes.com/sites/martinrivers/2021/06/15/how-bitcoin-can-fix-global-inequality-one-developing-nation-at-a-time/?sh=5aca5e9d2aa5 https://www.forbes.com/sites/martinrivers/2021/06/15/how-bit... [5] https://digiconomist.net/bitcoin-raises-inequality https://digiconomist.net/bitcoin-raises-inequality
ArtRichards 5y ago
There was a time in 2014/15 where paying for goods with cryptocurrency was becoming popular. Its at this time when coincidentally, regulations towards requiring PII was instantiated in the US, essentially freezing most in/outroads of fiat. It was the end of traded goods for crypto. This coincided with many of the original arguments on how & whether to increase transaction capacity (bitcoin cash debate), we see who influenced these (core devs/miners/exchanges/regulatory reps sponsored by banks) and how they played out in hindsight. I'm not saying this was a coordinated effort, rather an oversimplification of the natural response from traditional fiat participants towards a threat to the 'status quo' at the time. However, this shift, happening at the most crucial tipping point, is what I believe to be the end of the ideal 'cryptorevolution' and instead a new compromise with the existing system. These disruptions were 'successful' But.. you know... thats just my opinion.. man...
- hanniabu 5y ago
  There's many patients that still accept crypto, you're just not coverting to fiat in the process. I would argue that's the point where there stopped being compromise with the existing system.
EGreg 5y ago
Posted it a day ago but only got 8 points hehe https://news.ycombinator.com/item?id=27800381 https://news.ycombinator.com/item?id=27800381
OgAstorga 5y ago
Just a reminder. Everything you say is your opinion by default. No need to write “(imo)” every two sentences.
Animats 5y ago
The list of crooks involved with cryptocurrencies is significant. And a big problem. Binance really was banned from operating in the Cayman Islands.[1] That's an achievement. China's crackdown on Bitcoin mining halved the hash rate.[2] This time, it's serious. Several weeks ago, power was disconnected by the authorities from major Bitcoin mining operations. This is significant, because Bitcoin was being used as a legal way to move money out of China. It's manufacturing and exporting, which is both legal and encouraged. Or was. The crackdown continues.[3] Over a thousand people arrested so far. Three stablecoins have gone to zero in recent weeks. When stablecoins crash, they go all the way . The NFT thing seems to be over, although it's hard to see that, because NFTs stall rather than crashing. As I've pointed out before, NFT markets look like Beanie Baby markets on eBay - offers to sell at high prices, no bids. No liquidity. Highly publicized single transactions at high prices are probably sales between cooperating parties. The real point of NFTs is that they are neither a commodity nor a security, and thus evade regulation. Most importantly, the cryptocurrency world has never experienced a general recession and the resulting net outflow of capital. Remember what happened to Madoff. [1] https://www.caymancompass.com/2021/07/02/cima-binance-not-authorised-to-operate-crypto-currency-exchange/ https://www.caymancompass.com/2021/07/02/cima-binance-not-au... [2] https://www.coinwarz.com/mining/bitcoin/hashrate-chart https://www.coinwarz.com/mining/bitcoin/hashrate-chart [3] https://www.cnbc.com/2021/07/06/china-cracks-down-on-crypto-related-services-in-ongoing-war-on-bitcoin.html https://www.cnbc.com/2021/07/06/china-cracks-down-on-crypto-...
- ValentineC 5y ago
  > Three stablecoins have gone to zero in recent weeks. When stablecoins crash, they go all the way . I found Iron Finance (TITAN) and SafeDollar [1]. What's the third? [1] https://www.newsweek.com/safedollar-price-hits-zero-despite-being-stablecoin-developers-blame-hack-1605063 https://www.newsweek.com/safedollar-price-hits-zero-despite-...
  - Animats 5y ago
    I suppose one could count IRON and TITAN as only one collapse. TITAN was supposed to partially collateralize IRON. There's also Iron's TITANIUM token, which collapsed as well. - IRON Titanium Token (TITAN) $0.00000145 - All-Time High $64.19 -100.0% Jun 16, 2021 The whole Iron Finance house of cards collapsed, taking down multiple tokens. Not that you'd know this from their main web site, "https://iron.finance/ https://iron.finance/". The new hype: Iron Finance relaunch scheduled for Monday, 12 July 2021 at 1PM UTC on Polygon Network The relaunch will include a new token and IronSwap, the Iron Finance stable swap product. As most of you are already aware, the Iron Finance team has renounced ownership of the old TITAN token, it is now actively managed by the TitanDAO community initiative. As explained in our previous Medium article, STEEL, TITAN and DND tokens are no longer part of the Iron Finance products and ecosystem. The new official Iron Finance token to replace the TITAN token will be the ICE token (=“TITANv2”). We were inspired by A Song of Ice and Fire novels, where the Iron Throne is a well-known symbol.
nootropicat 5y ago
>disguising how Bitcoin has failed at almost everything Nakamoto set out to achieve Satoshi mined over 1.1M BTC [1], and designed the emission schedule to give majority of holdings to very early adopters (ie. mostly himself). The coin also has no value source at all (not backed by anything, no income generation), the only way to realize a profit on bitcoin is at the expense of someone else's loss. The name for this economic design is: a ponzi (new variation) and the one reason for a design like that - to become rich at the expense of others. >Since we’re failing to witness any of this happen, however, the crypto dream is crumbling Crypto has become less of a ponzi through the years because bitcoin is becoming less and less relevant with each year - transferring, lending and borrowing dollars is the first major use case that isn't fundamentally a ponzi variation. In fact for people in countries with capital controls saving in dollar in defi is probably the single best way to accumulate wealth. Defi itself as an infrastructure is neutral - it can serve ponzis as well as fundamentally productive use cases (eg. tokenized houses -> defi mortgages), but due to lack of tokenized real assets except for (mostly) dollars, most of activity is related to some new ponzi variation. I think the switch to mostly productive ecosystem is going to happen during this decade - which necessarily requires bitcoin to lose importance to the point that seeing its price on coingecko/cmc requires scrolling. Potential notwithstanding, the accumulated debt from wealth destruction since 2009 is enormous. Mining alone destroyed wealth equivalent to gdp of a small country, on top of that there's enormous loss of human potential (people playing in crypto instead of doing something actually productive - many very smart) and dangerously big wealth transfer to outright scammers that leverage that to scam even more. I estimate the total cumulative negative impact from crypto (esp. bitcoin) to be in the hundreds of billions of dollars. Even in the optimistic timeline in which defi makes everything significantly more efficient it's going to take a really long time to get back to net zero, and to make it a good investment (compared to other possible investment) - decades. All of this is sunk cost, so imo banning crypto now would be a mistake, but even as someone who made a fortune from crypto I recently realized that world in 2021 would be a better place if it never existed. [1] https://bitslog.com/2019/04/16/the-return-of-the-deniers-and-the-revenge-of-patoshi/ https://bitslog.com/2019/04/16/the-return-of-the-deniers-and...
- tromp 5y ago
  > designed the emission schedule to give majority of holdings to very early adopters And nearly every single one of the thousands of altcoins tilt the rewards to early adopters to a greater or same degree as bitcoin. Sadly, there is very little interest in minimizing the concentration of wealth...
noxer 5y ago
Its getting boring, just another Crypto-Hate-Articles with zero merit. Just repeat over and over again what has been said last year already and the year before and the year before. All the way back to 2015 or so when it first became mainstream to hate crypto. Yes most of it is true/is a scam/has no use-case/ etc etc. that doesn't make repeat it any better. Everyone knows move on to something else to write about.
deleted 5y ago
[deleted]
ftr45 5y ago
good

63 points by edward 5y ago

Hah, not that Tether crap again (in TFA)!!! The author completely misunderstands not only Bitcoin, but also economics. To mention just one point, where he complains how only 10,000 addresses (which could be 10K or fewer people and organizations) own 60% of bitcoin. How does it matter to me as a saver or user of money, how many people own how much gold, or silver? It doesn't matter at all. I acquire it at market price, I hold it, and then I sell it at market price. Bitcoin is a failed cryptocurrency, but for completely unrelated reasons and you won't read about that in the author's blog - that's for sure.

gerikson 5y ago

Sounds like they should lay off the Concoda, it sounds dangerous.

romwell 5y ago
Yup, I hope the title gets fixed to not say that Concoda is how the movement is destroying itself :)

tracedddd 5y ago

Fixing wealth equality was never a narrative. In fact wealth incentives favoring early adopters were built in day 0. It’s impossible and maddening to keep the “movement” on track in messaging. Every era is less educated technically and cares less about ideological or political goals and more about the bottom line of making some wealth. So of course the movement is diluted. Influencers are rarely true cypherpunks and are the loudest by profession. But it doesn’t mean it isn’t working. IMHO the traditional finance system has only gotten more troubling since Satoshi’s whitepaper while crypto has grown more and more capable. It’s true there have been new challenges that have emerged, some of which are still ongoing, but that’s part of growth.

fossuser 5y ago
Yeah - I started off cautiously optimistic, but I've gotten more and more confident in its long term future. The DeFi tech is real, but early. Vitalik Buterin is a really good leader for Ethereum and development. Vitalik Interview: https://www.stitcher.com/show/rationally-speaking/episode/intellectual-honesty-cryptocurrency-more-vitalik-buterin-82142288 https://www.stitcher.com/show/rationally-speaking/episode/in... This is a worthwhile list to read through: https://danromero.org/crypto-reading/ https://danromero.org/crypto-reading/ The main issue for outsiders is that the industry is surrounded by snake oil salesman and people that don't know what they're talking about (the 'evil central bank' types), but the underlying tech is real and the potential is real (imo). If you look at it quickly you might dismiss it all, but I think that'd be a mistake. The ability to manage decentralized state is very cool, but there's a lot to build to make it viable (and as a result, there's a lot of opportunity). When something is hard, there's often value in making it easier. There's also a lot of stuff in legacy finance that requires humans to do and is slow. Multi-day financial transfers for clearing and high associated fees for wires (at some banks) - crypto options are much better and modern implementations of the legacy stack. The current state is still a bit unstable, and the UX is a disaster, but the future is clearly better (imo) in a way legacy systems will have trouble competing with. As an aside, 'wealth inequality' is a feature you want in effective capitalist systems (you can still protect the lower bound). http://paulgraham.com/ineq.html http://paulgraham.com/ineq.html In 1999 a lot of people recognized the value of the internet (though many still dismissed it [0]), but there was also a lot of dumb money and failure - loud people who didn't know what was going on. The web obviously became extremely economically relevant despite all of that. There's some similar potential here - I think it'll just take a while to shake out. [0] "By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s." -Paul Krugman (1998) Irony of the above quote is it's wrong on two levels - the internet, but also the impact of the fax machine (also huge).
- rawtxapp 5y ago
  Yes, the loud mouths on twitter and other social networks are definitely a turn-off and pretty annoying. For anyone who's looking into more serious/technical discussions, I think looking through github contributions, whitepapers, technical parts of bitcointalk and in depth interviews of legitimate contributors to the ecosystem (like Vitalik) is much more informative and has better signal to noise ratios.

codethief 5y ago

I largely enjoyed reading the article but: > Out of the tools we possess to rid the system of crony capitalism, crypto is still our best shot. What in the DNA of "crypto" suggests that it would ever rid us of "crony capitalism"? Did I not get the memo?

skulk 5y ago
Full transparency is in the "DNA of crypto" imo, and shady dealings being out in the open is definitely a check against "crony capitalism." However, beyond the surface, claiming that crypto will clean up corruption is laughable.
- tome 5y ago
  To what extent is Tether "out in the open"?
- arcticbull 5y ago
  It's really not - that's just marketing. The reality of the blockchain is that its guarantees only extend to what can be wholly represented and encapsulated on-chain. That's why only abstract/fiat currencies have emerged after 14 years of research as viable use cases. The boundary between the chain and reality is where these guarantees break down. The blockchain cannot guarantee the reserves in Tether's bank account. That's not transparency, that's the illusion of transparency. That's much worse than intentional opacity IMO since it throws people off the trail.
Finnucane 5y ago
This is not even really a surprising result. Bitcoin is not designed to be a functional currency in any modern sense. It's never going to be the basis of a complex, large economy. It is far too inflexible and inefficient. It is designed to be a hoardable asset, as long as you can keep convincing people to pay into the system. The lack of government oversight and control obviously appeals to the criminal and the corporate mobsters.
- ipaddr 5y ago

arcticbull 5y ago

I love that they included Stuart Hoegner's tweet. Hoegner is a hilarious villain, sort of the Saul Goodman of Bitfinex/Tether (he's their GC). He was the head of compliance at Excapa, the parent company of the wildly non-compliant Ultimate Bet. That online poker site had a back door where some of their friends could see other poker players cards [1] Seeing him call anyone a liar - as he does regularly - is downright hilarious. After all, at one point he had all of Tether's entire backing dollars (a small fraction of outstanding USDT) with his personal funds in his Bank of Montreal account. [2] [1] https://bennettftomlin.com/2021/03/27/before-bitfinex-and-tether/ https://bennettftomlin.com/2021/03/27/before-bitfinex-and-te... [2] https://ag.ny.gov/sites/default/files/2021.02.17_-_settlement_agreement_-_execution_version.b-t_signed-c2_oag_signed.pdf https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen... section 17.

WalterBright 5y ago
> some of their friends could see other poker players cards Anyone who plays online poker for money is naive. The temptation for the programmers of such systems to cheat has to be enormous.
- jazzyjackson 5y ago
  Now that’s a system I’d like to see some innovation on: a smart contract card dealer that manages to keep your hand secret. Would be a great demo for a privacy coin.
  - lostmsu 5y ago
    Or a zero knowlege game.
- noxer 5y ago
  But decentral system are useless and everything works better if centralized ryt? Funny how "blockchains" solve problems exactly like the one you just pointed out.
  - 5y ago

wedn3sday 5y ago

All cryptobucks are pyramid schemes.

erdos4d 5y ago
Many are, and in the early days this statement was mostly true, but today there are many legitimate uses for cryptocurrency. In Latin America for instance it is becoming increasingly common to use cryptocurrency for remittance payments, because it is way more efficient than international bank transfers with no questions asked to boot. I expect this trend will eventually start wider adoption by the broader merchant community here, as more people are coming into contact with cryptocurrency in this fashion.
- wedn3sday 5y ago
  "no questions asked" like, "how did you earn this?" and "did you pay taxes on this income?". I agree that cyberbucks are great for laundering drug money and avoiding taxes.

c7DJTLrn 5y ago

Cryptocurrency has no real world utility. It's a tool for gambling, speculative investment, and pump-and-dump schemes. There, I said it. I was an Ethereum enthusiast back in 2017, but it didn't take long for me to see that cryptocurrency as it stands will never work. Smart contracts are too fragile, trading is too inaccessible, and keeping assets safe is too difficult. There has been barely any innovation in scalability over the years, and I'm wondering if that's because proof of work has become too big to fail. Too profitable for it to end.

Bombthecat 5y ago
I think, smart contracts work, but only the super simple ones. Everything else is proned for bugs
- root_axis 5y ago
  Smart contracts also have near (but not completely) zero utility since they're only useful when applied to entities that are entirely contained on the blockchain.
  - hanniabu 5y ago
    Lol all your comments scream bitcoin maxi
- hanniabu 5y ago
  That's a property of software in general
arcticbull 5y ago
The big challenge is actually the set of core features: decentralization, trustlessness and permissionlessness. These are the features that allow the pricing to be manipulated beyond any semblance of connection to reality. Any number you see, any stat you see, any data presented to you is likely fake. This is made possible because of trustlessness, permissionlessness and decentralization. Nobody can stop it by design. 95% of all trading volume is fake. Exchanges fake volume to draw in new gamblers. [1] The pricing is determined by Tethers, which account for 65% of all trading volume [2, 3] but are backed by $0.03USD per USDT and hot air and are not redeemable by anyone [4]. Even USDC is now backed by "approved investments" instead of dollars [5]. That's just a small sliver. Aparently 1/3 of all small and medium businesses in America accept crypto! Fun fact. Are you sure? Because I haven't seen a single one. [6] The actual market is roughly speaking totally unrecognizable. The only thing we know for a fact is that new money has to come into PoW coins equal to the cost of mining just to keep the price stable. Anything above and beyond that is almost impossible to know for sure. This is what libertarianism looks like (humorous take [7]). It kinda sucks. [1] https://www.forbes.com/sites/cbovaird/2019/03/22/95-of-reported-bitcoin-trading-volume-is-fake-says-bitwise/ https://www.forbes.com/sites/cbovaird/2019/03/22/95-of-repor... [2] https://onlinelibrary.wiley.com/doi/full/10.1111/jofi.12903 https://onlinelibrary.wiley.com/doi/full/10.1111/jofi.12903 [3] https://coinlib.io/coin/BTC/Bitcoin https://coinlib.io/coin/BTC/Bitcoin - among others. [4] https://www.ft.com/content/529eb4e6-796a-4e81-8064-5967bbe3b4d9 https://www.ft.com/content/529eb4e6-796a-4e81-8064-5967bbe3b... [5] https://www.coindesk.com/circle-is-not-winning-stablecoin-transparancy-race https://www.coindesk.com/circle-is-not-winning-stablecoin-tr... [6] https://bitcoinist.com/36-of-u-s-smes-accept-cryptocurrency-payments/ https://bitcoinist.com/36-of-u-s-smes-accept-cryptocurrency-... [7] https://www.newyorker.com/humor/daily-shouts/l-p-d-libertarian-police-department https://www.newyorker.com/humor/daily-shouts/l-p-d-libertari...

smoldesu 5y ago

I love reading articles like this. Not because I'm going long on crypto or anything, but because the market needs a crash. If we can't shake off Wall Street, there will be no democratization of finance. If crypto crashes now, I'd feel much better about the future of digital currency.

c7DJTLrn 5y ago
I've been waiting for a crash for years so that the parasites looking to "get rich quick" leave and the discussion can return to technical matters like privacy, scalability, and ease of use instead of Elon Musk's latest cryptocurrency-related tweets and the coin value. For the past ~8 years the discourse has been significantly focused on the latter.
gruez 5y ago
>Not because I'm going long on crypto or anything, but because the market needs a crash The recent drop didn't count as a crash?
- jazzyjackson 5y ago
  It’s still higher than it ever was before 2021 from a quick perusal of the Google chart for BTC, so I think if you bought your Bitcoin before then, this year might just be called “volatile”
  - gruez 5y ago
    That doesn't that describe the price trend of all bitcoin bubbles? It goes up, crashes, but always higher than the prior all-time high.

birthday 5y ago

Why can there be no rich bitcoin holders? Sure you want coins distributed to some degree, but the mere fact that there are rich and poor bitcoin holders is natural and expected. And they will be the minority (less than 10 000).

arcticbull 5y ago
There certainly can, however crypto has a worse wealth distribution than the US dollar and any banana republic. Freeing the poor from the tyranny of wealth inequality was one of the flagship features the community has been touting for a decade. The claims do not align with reality, and are likely antithetical to the goals of a functioning, efficient, equitable society. The world would be worse off with such a distribution, IMO. For the record, I'm pro wealth inequality and income inequality, so long as its coupled with social mobility and a high standard of living for the lower classes.
- gruez 5y ago
  >Freeing the poor from the tyranny of wealth inequality was one of the flagship features the community has been touting for a decade. It has?
  - arcticbull 5y ago
    I mean I've heard it many times [1, 2, 3, 4]. You're welcome to call that anecodta. The reality is quite the opposite of the narrative. [5] [1] [2018] https://www.washingtonpost.com/news/theworldpost/wp/2018/01/29/blockchain/ https://www.washingtonpost.com/news/theworldpost/wp/2018/01/... [2] [2018] https://medium.com/predict/how-bitcoin-solves-the-problem-of-the-worlds-unbanked-poor-ad2f76d7e368 https://medium.com/predict/how-bitcoin-solves-the-problem-of... [3] [2019] https://www.businessinsider.com/this-is-how-bitcoin-can-end-income-inequality-in-2020 https://www.businessinsider.com/this-is-how-bitcoin-can-end-... [4] [2021] https://www.forbes.com/sites/martinrivers/2021/06/15/how-bitcoin-can-fix-global-inequality-one-developing-nation-at-a-time/?sh=5aca5e9d2aa5 https://www.forbes.com/sites/martinrivers/2021/06/15/how-bit... [5] https://digiconomist.net/bitcoin-raises-inequality https://digiconomist.net/bitcoin-raises-inequality

ArtRichards 5y ago

There was a time in 2014/15 where paying for goods with cryptocurrency was becoming popular. Its at this time when coincidentally, regulations towards requiring PII was instantiated in the US, essentially freezing most in/outroads of fiat. It was the end of traded goods for crypto. This coincided with many of the original arguments on how & whether to increase transaction capacity (bitcoin cash debate), we see who influenced these (core devs/miners/exchanges/regulatory reps sponsored by banks) and how they played out in hindsight. I'm not saying this was a coordinated effort, rather an oversimplification of the natural response from traditional fiat participants towards a threat to the 'status quo' at the time. However, this shift, happening at the most crucial tipping point, is what I believe to be the end of the ideal 'cryptorevolution' and instead a new compromise with the existing system. These disruptions were 'successful' But.. you know... thats just my opinion.. man...

hanniabu 5y ago
There's many patients that still accept crypto, you're just not coverting to fiat in the process. I would argue that's the point where there stopped being compromise with the existing system.

EGreg 5y ago

Posted it a day ago but only got 8 points hehe https://news.ycombinator.com/item?id=27800381 https://news.ycombinator.com/item?id=27800381

OgAstorga 5y ago

Just a reminder. Everything you say is your opinion by default. No need to write “(imo)” every two sentences.

Animats 5y ago

The list of crooks involved with cryptocurrencies is significant. And a big problem. Binance really was banned from operating in the Cayman Islands.[1] That's an achievement. China's crackdown on Bitcoin mining halved the hash rate.[2] This time, it's serious. Several weeks ago, power was disconnected by the authorities from major Bitcoin mining operations. This is significant, because Bitcoin was being used as a legal way to move money out of China. It's manufacturing and exporting, which is both legal and encouraged. Or was. The crackdown continues.[3] Over a thousand people arrested so far. Three stablecoins have gone to zero in recent weeks. When stablecoins crash, they go all the way . The NFT thing seems to be over, although it's hard to see that, because NFTs stall rather than crashing. As I've pointed out before, NFT markets look like Beanie Baby markets on eBay - offers to sell at high prices, no bids. No liquidity. Highly publicized single transactions at high prices are probably sales between cooperating parties. The real point of NFTs is that they are neither a commodity nor a security, and thus evade regulation. Most importantly, the cryptocurrency world has never experienced a general recession and the resulting net outflow of capital. Remember what happened to Madoff. [1] https://www.caymancompass.com/2021/07/02/cima-binance-not-authorised-to-operate-crypto-currency-exchange/ https://www.caymancompass.com/2021/07/02/cima-binance-not-au... [2] https://www.coinwarz.com/mining/bitcoin/hashrate-chart https://www.coinwarz.com/mining/bitcoin/hashrate-chart [3] https://www.cnbc.com/2021/07/06/china-cracks-down-on-crypto-related-services-in-ongoing-war-on-bitcoin.html https://www.cnbc.com/2021/07/06/china-cracks-down-on-crypto-...

ValentineC 5y ago
> Three stablecoins have gone to zero in recent weeks. When stablecoins crash, they go all the way . I found Iron Finance (TITAN) and SafeDollar [1]. What's the third? [1] https://www.newsweek.com/safedollar-price-hits-zero-despite-being-stablecoin-developers-blame-hack-1605063 https://www.newsweek.com/safedollar-price-hits-zero-despite-...
- Animats 5y ago
  I suppose one could count IRON and TITAN as only one collapse. TITAN was supposed to partially collateralize IRON. There's also Iron's TITANIUM token, which collapsed as well. - IRON Titanium Token (TITAN) $0.00000145 - All-Time High $64.19 -100.0% Jun 16, 2021 The whole Iron Finance house of cards collapsed, taking down multiple tokens. Not that you'd know this from their main web site, "https://iron.finance/ https://iron.finance/". The new hype: Iron Finance relaunch scheduled for Monday, 12 July 2021 at 1PM UTC on Polygon Network The relaunch will include a new token and IronSwap, the Iron Finance stable swap product. As most of you are already aware, the Iron Finance team has renounced ownership of the old TITAN token, it is now actively managed by the TitanDAO community initiative. As explained in our previous Medium article, STEEL, TITAN and DND tokens are no longer part of the Iron Finance products and ecosystem. The new official Iron Finance token to replace the TITAN token will be the ICE token (=“TITANv2”). We were inspired by A Song of Ice and Fire novels, where the Iron Throne is a well-known symbol.

nootropicat 5y ago

>disguising how Bitcoin has failed at almost everything Nakamoto set out to achieve Satoshi mined over 1.1M BTC [1], and designed the emission schedule to give majority of holdings to very early adopters (ie. mostly himself). The coin also has no value source at all (not backed by anything, no income generation), the only way to realize a profit on bitcoin is at the expense of someone else's loss. The name for this economic design is: a ponzi (new variation) and the one reason for a design like that - to become rich at the expense of others. >Since we’re failing to witness any of this happen, however, the crypto dream is crumbling Crypto has become less of a ponzi through the years because bitcoin is becoming less and less relevant with each year - transferring, lending and borrowing dollars is the first major use case that isn't fundamentally a ponzi variation. In fact for people in countries with capital controls saving in dollar in defi is probably the single best way to accumulate wealth. Defi itself as an infrastructure is neutral - it can serve ponzis as well as fundamentally productive use cases (eg. tokenized houses -> defi mortgages), but due to lack of tokenized real assets except for (mostly) dollars, most of activity is related to some new ponzi variation. I think the switch to mostly productive ecosystem is going to happen during this decade - which necessarily requires bitcoin to lose importance to the point that seeing its price on coingecko/cmc requires scrolling. Potential notwithstanding, the accumulated debt from wealth destruction since 2009 is enormous. Mining alone destroyed wealth equivalent to gdp of a small country, on top of that there's enormous loss of human potential (people playing in crypto instead of doing something actually productive - many very smart) and dangerously big wealth transfer to outright scammers that leverage that to scam even more. I estimate the total cumulative negative impact from crypto (esp. bitcoin) to be in the hundreds of billions of dollars. Even in the optimistic timeline in which defi makes everything significantly more efficient it's going to take a really long time to get back to net zero, and to make it a good investment (compared to other possible investment) - decades. All of this is sunk cost, so imo banning crypto now would be a mistake, but even as someone who made a fortune from crypto I recently realized that world in 2021 would be a better place if it never existed. [1] https://bitslog.com/2019/04/16/the-return-of-the-deniers-and-the-revenge-of-patoshi/ https://bitslog.com/2019/04/16/the-return-of-the-deniers-and...

tromp 5y ago
> designed the emission schedule to give majority of holdings to very early adopters And nearly every single one of the thousands of altcoins tilt the rewards to early adopters to a greater or same degree as bitcoin. Sadly, there is very little interest in minimizing the concentration of wealth...

noxer 5y ago

Its getting boring, just another Crypto-Hate-Articles with zero merit. Just repeat over and over again what has been said last year already and the year before and the year before. All the way back to 2015 or so when it first became mainstream to hate crypto. Yes most of it is true/is a scam/has no use-case/ etc etc. that doesn't make repeat it any better. Everyone knows move on to something else to write about.

deleted 5y ago

[deleted]

ftr45 5y ago

good