21 ms·

The Tinkerbell Griftopia

191 points by rwosync 5y ago

wpietri 5y ago
Stellar article. It matches a ton of my views. I really appreciate the author for taking the time to follow the industry and keep writing about it. I've been tempted to do the same, but it would be so much work. involved but not only is the space metastasizing at an incredible rate, but even proponents agree that there's a ton of BS. And honestly, it would be terrible for my stress levels to deal with the army of financially motivated proponents.
nathias 5y ago
Yes, the bankster grandpa Dahl is right. Crypto is not for you, it is not for the very wealthy old americans that have build the 'open' web of platforms and sucked the value out of all the corners of the Earth. It's for the rest of us.
- kibwen 5y ago
  You realize that there's literally nothing stopping Old Money from buying their way into cryptocurrency ecosystems and concentrating their wealth there too, yes? In fact it's even easier for wealthy people to speculate like this, because unlike poor people, wealthy people have disposable income. Cryptocurrency is a playground for the wealthy and the model for our futuristic serfdom dominated by a digital aristocracy (a class that will have almost perfect overlap with our modern aristocracy).
  - nathias 5y ago
    There is, its risk. They are rich and risk averse, we are poor and have nothing to lose except our tiny paychecks. Wealthy people have assets, poor people have time. There is very little freedom and social mobility left in our decaying system and crypto is all there is left. There is of course the possibility that the current aristocracy will apropriate our tools for themselves (they sure are trying), but I see the potential for a much better world, one where democracy is restored and enhanced by technology.
fredfoobar 5y ago
The thing is, there isn't a bigger grifter than Stephen Diehl.
- VHRanger 5y ago
  I dont see him selling anything You can just admit you dont like that he casts shade on stuff you like
  - casi18 5y ago
    his company makes the closed source financial infrastructure for digitising cash for multinational corporations, that is made useless by crypto becoming popular. of course he doesnt mention this when writing hit pieces on crypto culture. https://twitter.com/TBSocialist/status/1456963980577153026?s=20 https://twitter.com/TBSocialist/status/1456963980577153026?s...
    - VHRanger 5y ago
      Uh, that's the worse citation source I've ever seen? It's a speculative twitter post? Also, what you said is like saying someone working at Stripe felt threatened by crypto. He's still not selling you a product (anywhere I can find in his online presence!) A full decade later, crypto still isn't used for payments except in PR puff pieces, like the El Salvador fiasco. No one working in serious online payments feels threatened by crypto. Some want to ride the crypto PR mania into popularity, however.
      - casi18 5y ago
        http://www.adjoint.io/ http://www.adjoint.io/ is the company hes not selling me anything, but hes selling to companys who have a choice of the stuff hes making or the stuff others are making as FOSS, and the stuff other people are making is being adopted more than his stuff. I guess that would be annoying. I do notice how a decade in, the goalposts continue to shift. The millions of users are still nothing, the daily volume of transferred value is nothing, the hundreds of daos and communities are nothing, twitter discord reddit ycombinator, all of them delusional. yes its all just scammers and people being scammed. thats the true reality. dread it, run from it, destiny still arrives
w-j-w 5y ago
I find that this article's willingness to frame the crypto debate as "entirely cultural" either dishonest or ignorant. There are real technical concerns that the technology itself isn't capable of scaling the way it's proponents want it to (without causing a climate catastrophe).
h2odragon 5y ago
Soon we get to the point when the Tinkerbell believers become violent against the unfaithful because their heresy is what spoiling the magic. In practise this will mean legal regulation and support, probably by some further perversion of IP laws. Really dont see any end game that aint ugly.
- gordian-mind 5y ago
  I've never seen that, ever. There are, however, daily calls to unperson people in the crypto space -- just like what S. Diehl is doing here by claiming it is essentially a 'collective delusion worthy of punishment'.
- kibwen 5y ago
  Keep an eye out for cryptocurrency lobbyists passing laws to force browsers to disable right click > Save Image.
casi18 5y ago
> "Information doesn't want to be free anymore" “Information Wants To Be Free. Information also wants to be expensive....That tension will not go away” - Stuart Brand Think about the whole quote and NFTs will make more sense to you. NFT != DRM go wild, right click and torrent. i'll send you my nft images myself if you want them. the signatures and the economic security of that signature taking place is valuable. there is no scarcity of information in NFTs. these takes are getting so bad, misunderstanding the point so much im not sure how we get people aligned in the discussion at this point. but in the words of satoshi “If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry.”
- AnIdiotOnTheNet 5y ago
  > the signatures and the economic security of that signature taking place is valuable Except, it isn't. What is the point in having a certificate of ownership of a resource so un-scare that it is practically free? We have achieved post-scarcity of information, and people are desperately trying to cram scarcity-based economics back into it because that's all our society knows how to deal with. We should instead be working to remake society around the new reality, in my opinion. > but in the words of satoshi “If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry.” Yeah, that's what scam artists say. Tell everybody you have a miracle, instill some FOMO, and when people poke at the holes tell them you don't have time to explain it to them or it is too complicated, but trust me it's great.
  - casi18 5y ago
    People need to be paid to do the work, so they can eat and pay rent. We dont actually live in a post scarcity star trek world. So we find a way that people can be paid yet the information and content can remain free to everyone. It seems like lots of people like this. For some reason some people really really hate that other people are willing to pay to make content freely available to them. The people buying NFTs are footing the bill for you to have that free information. Sure thats a social/cultural status game with a side of speculation, but in turn we have art that is permeating culture rapidly. As he is quoting a distortion of Stuart Brand, maybe we should see what he would think? well here he is at the ethereum devcon in 2018 talking about this stuff. https://www.youtube.com/watch?v=oLGZdLpHl1w https://www.youtube.com/watch?v=oLGZdLpHl1w Open minded, interested, exploring, doing what he has done for decades and has been admired by people for, being a hacker!
snek_case 5y ago
This writing is truly poetic :')
asfgfsigninoi 5y ago
>But unlike say the eternal emacs/vim war, the divisions on this topic are entirely philosophical and about culture instead of technology. What? My problem with "crypto assets" is that "blockchains" are outperformed by a System/360 while costing billions of dollars to run and drawing about the same power as all datacenters in the world put together. The fact that I like Star Trek is irrelevant.
- AlexandrB 5y ago
  Indeed. Blockchain tech, at least in its PoW incarnation, seems like a negation of Moore's law. The same operations get slower and less efficient over time.
  - asfgfsigninoi 5y ago
    Every incarnation I've heard of is comparably slow. People claim to have ways to improve efficiency but I haven't heard of anything within three orders of magnitude of performance of the Windows 95 machine rusting in my garage.
    - pphysch 5y ago
      The canonical way to get around the inevitable inefficiency of decentralization at scale is to quietly re-add centralization (ReFi?) and bury it under technical neologisms and benchmarks. "Look how fast and innovative $cryptocurrency is! I totally didn't just reinvent a centralized payment settlement system."
- setpatchaddress 5y ago
  This is specifically about NFTs, and not the general environmental problems with cryptocurrency, which exist, but are solvable with known technology.
- deleted 5y ago
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NikolaeVarius 5y ago
Anyway here you go https://thenftbay.org/description.html https://thenftbay.org/description.html https://thenftbay.org/ https://thenftbay.org/ You can have all the NFTs in existence without having to wear out your right click button. We can all be "rich"
- firloop 5y ago
  Turns out that torrent is mostly full of zeroes: https://github.com/ghuntley/thenftbay.org/issues/9 https://github.com/ghuntley/thenftbay.org/issues/9
  - NikolaeVarius 5y ago
    Issue was deleted.
  - notpachet 5y ago
    Probably still figuratively the case even after that issue is resolved...
- darawk 5y ago
  https://www.moma.org/collection/works/79802 https://www.moma.org/collection/works/79802 MOMA is going to be so mad when they find out Starry Night is worthless now.
  - jjulius 5y ago
    You're talking about a piece of art that exists on a canvas, with its own bumps/grooves, versus a photo/scan of that art. There is still only one Starry Night in it's exact, original form despite us being able to pull it up on Google Images. It will age, and change with age. A .jpg NFT can literally be saved/copied in it's exact original form an infinite number of times.
    - darawk 5y ago
      So, you're saying that those exact bumps and grooves are the repository of value for Starry Night? That if only we could perfectly replicate those grooves, then it'd have no value?
brighton36 5y ago
Great piece. Really liking Stephen's content lately.
reedf1 5y ago
It's hard to take takes like this seriously when they get the basic premise wrong. It's flowery and cute but its a lot of writing with very little substance.
- zepto 5y ago
  It’s very hard to take seriously critiques that say a premise is wrong but are unable to say what that wrong premise actually is.
- vehemenz 5y ago
  How did they get the premise wrong? What premise? If you're going to try undercutting a 1,000 word essay, you'll need to work to get there.
  - gordian-mind 5y ago
    He thinks that being able to download every NFT's as a torrent is an own. But nobody cares about this. Also, to me this is not a '1,000 word essay' but a 'carefully crafted attempt to gaslight people without any substantive claims'. Since I qualified it that way, there is no need to refute it. :)
- deleted 5y ago
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woah 5y ago
This dude really pumps out the rambly anti-crypto takes. Too bad HN upvotes are not a cryptocurrency or he'd be rich
- notpachet 5y ago
  Too bad being rich is such a temptation to people, or he'd probably not have to spend time writing these anti-crypto takes decrying the rampant greed that's undermining the technical foundations of internet culture.
  - woah 5y ago
    A huge number of people are now paid to work full time on the cryptography, networking, and distributed systems challenges of creating decentralized tech, and open sourcing most of their work. This is paid for by cryptocurrency siphoning off a tiny sliver of transaction volume from the opaque, cronyist, closed source traditional financial system. You want to go back to the old days where decentralized technologies were mostly created as a cute hobby by engineers getting rich off surveillance technology, or by phd students studying to get a job getting rich off surveillance technology?
- thrower123 5y ago
  It's unfortunate. Before he fell into this rut of anti-crypto screeds in the past year or so, there was some pretty interesting programming language material https://www.stephendiehl.com/posts.html https://www.stephendiehl.com/posts.html
- gordian-mind 5y ago
  His twitter feed instantly reveals how personal and petty his crusade has become: https://twitter.com/smdiehl https://twitter.com/smdiehl What it shows us is that the veneer of intellectual honesty displayed in the article is just a facade. The real goal is to gaslight and unperson people he dislikes. Sad!
trevyn 5y ago
I think he missed the part where the crypto infrastructure is aggressively based on open-source, abundance, post-scarcity, universal access, and equality. The current "assets" that are traded are indeed meaningless, as is most of what people buy with money beyond food and basic shelter. This is what initial post-scarcity looks like: people being ridiculous with assets because they realize that assets themselves are ridiculous, because post-scarcity. We're in a transition period, a lot of old structures don't work anymore. We're just starting to rebuild critical functions using new ways of thinking. One of my favorite examples: https://cryptoforthehomeless.org/ https://cryptoforthehomeless.org/
- pphysch 5y ago
  Broadly speaking, people are not buying crypto assets "for the lulz" because they have too much darn money lying around, they are buying them on the speculation that they will appreciate--like Bitcoin--and can be dumped at a profit.
  - trevyn 5y ago
    This is exactly the key insight in a post-scarcity environment, though: Beyond food and basic shelter, everything is lulz. A lot of people didn't grow up in that environment of abundance, so they still think that "profit" is serious business and not lulz, but then they use that profit for big houses or yachts or children or other lulz anyway.
    - pphysch 5y ago
      Is it lulz, or is it a desperate attempt to find a financial/economic foothold when traditional footholds (bearable careers, houses, etc.) are increasingly out of reach for Millennials and onward?
      - trevyn 5y ago
        The traditional footholds are no longer relevant. Millennials and onward live on their phones, not in a house or at a workplace. From the traditional perspective, this seems like a loss. From another perspective, it's not.
convexfunction 5y ago
Very weird to frame crypto as contrasting with "an open source culture that, at least aspirationally, built software around ideas of abundance, post-scarcity, universal access, and equality". Were the "older grizzled engineers" all literal communists or what?
- zepto 5y ago
  Nothing weird about it. Crypto / web3 is about financializing everything. I.e, making everything about money. The goal is to create a gamified world in which all human interactions are controlled via financial incentives. The contrast is not communism, but rather the current gift economy model of open source, where people offer what they want out of intrinsic motivation rather than the desire to accumulate coins in a ledger.
  - AlexandrB 5y ago
    This is the really icky part of crypto. It would be deeply ironic if crypto, which was supposedly created in opposition to traditional banking institutions, was able to open the door for those institutions to financialize every nook and cranny of our lives.
    - zepto 5y ago
      I don’t see what’s ironic about it. Those existing banking institutions may not prevail, but that’s irrelevant. The financial engineers behind crypto are not some different breed of human than those who work at Goldman Sachs. Their goal is nothing but financializing all interactions on the web. That is literally what web3 means.
    - pohl 5y ago
      There's no shortage of icky parts of crypto. The whole idea from the outset was to enable an end-run around societal regulation of undesireables like money laundering, hiring hits, funding terrorism, human trafficking, tax evasion, and trading drugs & child pornography.
- 5y ago
typon 5y ago
Not only is the article completely on point, the writing is marvelous
colesantiago 5y ago
Devil's Advocate: Do cryptocurrencies have _any_ legitimate use case? I can see that some newer and non-mineable coins, Solana, Avalanche, Hedera, XRP, XLM, etc don't have mining issues that the big coins (BTC, ETH, Chia, etc) have. Is what I am seeing from critics that there has been absolutely no progress whatsoever in this space?
- newacc9 5y ago
  Are there _any_ true Scotsmen left?
  - colesantiago 5y ago
    It goes like this, I ask a question and an answer is given, not another question.
    - deleted 5y ago
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- curioussavage 5y ago
  Of course they do. The biggest one to me is micro transactions to me. Of course being required to pay capital gains on every transaction kills that. It opens up ways to run ad free online services without thinking of dumb schemes like charging exhorbitant amounts of money for digital “stickers” and other crap. Like tipping with a small percentage going to the platform, charging tiny amount per min/hour of usage, tiny subscriptions. In game currencies/economies that use regular crypto.
  - pjc50 5y ago
    But you can't do micro transactions on the blockchain - or rather, everyone can't do microtransactions on the blockchain because it's fundamentally anti-scalable and has to transmit every transaction to every full node. (LN does not solve this unless you re-centralise on a common broker with whom you have a channel!) This doesn't solve any of the other problems such as microfraud or friction either.
pphysch 5y ago
It is worth ruminating on how this 21st century Tinkerbell Griftopia started. Most of the proponents would have grown up roughly within the period 1991-2008. After the Cold War, before the Global Financial Crisis (GFC). The zenith of neoliberalism. The globalized USD seemed invincible, a worldwide Tinkerbell. Then the GFC happened. The USD-based system was not infallible after all. But it is hard to overcome our conditioning. Rather than evolve beyond the financial Tinkerbell mindset, increasing numbers of disillusioned have looked for a new Tinkerbell to believe in. Just listen to one of their slogans: "Fix the money, fix the world". Bitcoin happened to pop up also in 2008. The stage was set for a Tinkerbell revolution. My prediction is that the money will never be "fixed", and the global economy will continue to migrate away from the free-market financial Tinkerbell model of the last 75 years and towards computer-driven allocation and trading systems between sovereign governments and global corporations. For example, Ford Motor just inked a (non-binding) partnership with Global Foundries for car chips. Expect to see a lot more of these bilateral economic partnerships and less free-market chaos over the coming decades.
danielvf 5y ago
I work in the crypto industry right now - my job is to keep bad guys from stealing XXX millions of dollars. I've also worked on a team that has done the tech side of several record breaking NFT's sales. And I've sold my own NFTS for fun, and strangers have bought them (wat!). I'm not a "believer". Crypto is indeed full of idiots - and scammers - and crazy people who will say anything to see the token they hold go up - and scammers - and crazy people chasing a 100x buck - and more scammers. And even ignoring the scams, it's like living in an alternate Alice-in-Wonderland world where the rules of normal physics, normal economics, and normal society no longer seem to apply. It is truly a frothing zoo of non-normality. And yet I'm not a "skeptic" either. There are really, really hard technological problems out there, and there are really wonderful people working on them. In the middle of the economic silliness, there's a lot of new things around groups and economics being tried. And amidst the flurry of insanity in NFT world, there is some genuinely good art being created. For example, take the stuff this person creates (https://tylerxhobbs.com/fidenza https://tylerxhobbs.com/fidenza). The process of making it is exactly the kind of stuff hackernews loves, and it is genuinely good art. It's stuff I put on the wall. The whole game around who gets to pay a stupid amount of money to say they own it (https://opensea.io/assets/0xa7d8d9ef8d8ce8992df33d8b8cf4aebabd5bd270/78000313 https://opensea.io/assets/0xa7d8d9ef8d8ce8992df33d8b8cf4aeba...) of them doesn't diminish the fact that art has been created, and the art can be enjoyed anyone. It's easy, when you see lots of people making absurd claims, to go beyond just refuting those claims, and to slip into purely dismissing everything without ever checking to see if there's something of value there. But there is good, interesting stuff going underneath the madness frothing on twitter around crypto. Deep behind the apparent wall of film-flam artists, there's work going on in super weird math, formal software proving with billions of dollars on the line, new programming languages, new ways of scaling consensus, and lots of art being created.
- NikolaeVarius 5y ago
  Well, I saved a bunch of that art and can view it any time.
  - danielvf 5y ago
    Open source funding hits art. Anyone can view it and get the benefit of doing so, the artist got paid to create, somebody gets bragging rights. Everybody wins.
iskander 5y ago
I think what Stephen misses in his campaign against crypto is that the old ideals have already been coopted and smothered with the corporatization of the web and splintering of what was a decentralized ecosystem into a megacorp walled gardens. I know there's a tiny community of non-crypto decentralized web advocates and I hope they win. But, the main force for a return to decentralization is in crypto and the only realistic alternative to a web3 future is one where everything is a property of Google, Facebook, Microsoft, &c
- phillipcarter 5y ago
  > But, the main force for a return to decentralization is in crypto and the only realistic alternative to a web3 future is one where everything is a property of Google, Facebook, Microsoft, &c It'd be awfully nice if said decentralization was offering more valuable things than just naked ponzi schemes. I'm on team "we're in an ad bubble and it's disgusting that these major companies created a surveillance state" but the alternative presented is an extremely toxic culture of money-obsessed scammers who burn energy with reckless abandon. I'd advise that proponents of cryptocurrency-based systems like "web3" clean their houses out a bit.
  - iskander 5y ago
    I think it's easy to miss the content at the core of the movement given how thoroughly it's wrapped in gold rush and scamming. But the more time I spend around the space the more it seems that there is a legitimately transformative force which attracts the gold rush in the first place. And the ethos of people working on e.g. research DAOs, decentralized publishing, crypto art, &c feels right compared to the web2 world.
    - nefitty 5y ago
      It's the classic MBA meets genius nerd situation. "Hey everyone, look at this weird tech thing my brother has been obsessively building for the past year! You can have one for $5!"
    - easrng 5y ago
demygale 5y ago
From the article: "But truly that is the message of the Andersen folktale, that power begets the capacity to inspire delusion in the masses." Does the "Andersen folktale" refer to Tinkerbell? Has nothing to do with the merit of the article or his argument, but Tinkerbell was a character invented by J.M. Barrie for Peter Pan and not a folktale at all.
- ejj28 5y ago
  I believe the author was referring to The Emperor's New Clothes, which he also mentioned in the article
  - demygale 5y ago
    Thanks. My reading comprehension has not powered up yet this morning.
- brennen 5y ago
  https://en.wikipedia.org/wiki/The_Emperor's_New_Clothes https://en.wikipedia.org/wiki/The_Emperor's_New_Clothes
- deleted 5y ago
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streamofdigits 5y ago
Surely somewhere beyond the wall street grifters, the silicon valley data slurpers and the cryptomaniacs there is a fintech community that is actually worth being part of?
- h2odragon 5y ago
  Casinos?
darawk 5y ago
> A lot of us older grizzled engineers came from an open source culture that, at least aspirationally, built software around ideas of abundance, post-scarcity, universal access, and equality. We may not have always succeeded in achieving such goals, but these ideas informed much of what we now take for granted as the open source substrate that powers well … everything. Lol. And how is that working out for you with the modern internet? I came from this period as well, and I believe in these ideals. But scarcity is a fact of the world, and it is going to exist on the internet whether we like it or not. The only choice we have is whether that scarcity exists in centralized servers and closed protocols, or whether it exists on top of open, decentralized ones. The "post scarcity internet" is a ship that sailed two decades ago, or more. > Much ink has been spilled describing the technical internals of NFTs, and about as equal as much ink has been spent on obscurantism and decentralized woo woo to explain why the internals don’t matter. There is very little common ground on such debates because to the faithful the value of NFTs is a presuppositional truth instilled in them in the revelation of them making money off them. And simultaneously the non-believers can “right-click” or Torrent any NFT as a statement of the rejection of the ontological status of playing word games with the term “own”. I agree with all the author's criticisms of NFTs. However, they all apply equally well to every piece of art ever created. A context in which I also agree with them. NFTs are no more or less stupid than the art market generally. I'm not particularly into art myself, but the art market has a very long history of existing and operating relatively smoothly. Any decent modern day painter could make you a passable copy of Starry Night, but that doesn't make the original any less valuable. > There’s nothing new under the sun and the phenomenon of self-perpetuating faith-based economic schemes are well known to exist, there’s even a term: the Tinkerbell Effect. The phenomenon where things that are thought to exist only because people believe in them. The crypto acolytes really believe they can will into existence a whole new epistemé of value detached from the classical economics of the previous order. And that’s an idea that’s not without some historical precedence. The first book about virality of mania was written by the Scottish journalist Charles Mackay back in 1841 (See Extraordinary Popular Delusions and the Madness of Crowds), and to this day it remains the definitive reference on crypto mania because human nature remains largely invariant across the ages. This was a totally valid criticism in 2013. Just as this criticism was valid of the internet in 2001. It is not valid today. Even if you believe crypto will never offer any transactional utility to anyone, assets like gold derive 99% of their value from their utility as hedges. Ultimately, that is not an economic truth, it is a social truth. People don't like that - they desperately want their assets to have some mathematical, provable value to them. But they don't. Some assets really are equal to their discounted future cash flows. Other assets, like gold and bitcoin, derive their value from inter-subjective social consensus. That does not make them illegitimate, any more than the meaning of words or handshake greetings are illegitimate. > But at the same time, it must be understood that many of us in other intellectual traditions don’t look at the Tinkerbell Griftopia and see a promised land where we sit on a golden throne of monkey JPEGs. We see crypto as a mob of misguided fools repeating the ecological disaster of Easter Island on a global scale for the sole purpose of selling man-child themed Neopets. And some of us in the old guard think that’s not a future we want to see realized It's amusing to me that people lean so hard into the environmental argument. This argument will likely continue to be valid for Bitcoin, but it won't be for Ethereum, and most of the stuff this guy is criticizing lives on top of Ethereum. Hitching your wagon to a contingent, ephemeral feature of the technology who's obsolescence is already planned seems like a major tactical error to me. But go ahead.
victorvosk 5y ago
I have never seen someone so consistently angry about jpegs.
127 5y ago
Seems to me there's a conversation about the technology and conversation about how people react to that technology. Would be nice to talk about only the technology, but I guess in this case the social dimension is impossible to separate.
betwixthewires 5y ago
How exactly is cryptocurrency disconnected from classical economics?
- Hjfrf 5y ago
  Try pricing any cryptocurrency in a discounted cash flow model.
  - betwixthewires 5y ago
    That's not classical economics, that's asset specific. Try pricing USD or a commodity or literally any other asset that doesn't represent financial investment in a business venture in a discounted cash flow model.
    - Hjfrf 5y ago
      Nobody is using cryptocurrency as a currency, securities pricing is the only one that makes sense. Net trade balance (as in fx) gives them no investment value either-it's called a discount curve for a reason. Aside from that, there's stock to flow (lol) and technical analysis of volume/sentiment which are fine for day trading but ignore fundamentals. How would you price them on fundamentals?
      - betwixthewires 5y ago
        It's going to sound hand wavy, but it is a new asset class with a novel value proposition, so analyzing fundamentals will require assessing novel characteristics. How do you price a currency on fundamentals? Some of those indicators apply, like supply, yearly monetary inflation, reserves ("hoarding"), and some don't, like stability of the issuing state, but an analog to that would be network security. How do you price tulips? I'm not going to pretend that there isn't a massive section of demand that is entirely speculative. As far as a novel approach, you have to gauge potential utility, something there aren't very many analogs to in other asset classes. Can you send it over borders without being molested by various bureaucracies? Is there some guy that is going to change how things work under pressure? IMO the unique fundamentals of a cryptocurrency have to do with censorship resistance, permissionlessness, fungibility, some of the hot buzzwords that people use as selling points are more than buzzwords. And there's no century long history of refining the methodology of doing this, we are figuring out exactly what works and what doesn't, which is a part of the process of price discovery with any new asset class.
counternotions 5y ago
Reading this, nodded along mostly in agreement until the author attempted to compare the crypto community to "Scientology and their beliefs about alien thetans and e-meters"... come on, that's a dubious stretch in logic and with that one mean comment makes his points, as a whole, much less credible.
- pavlov 5y ago
  Have you read some of the stuff written by Bitcoin believers like MicroStrategy CEO Michael Saylor? It is genuinely Scientology-level in its open defiance of physics wrapped into scientific-sounding jargon. Bitcoin is a form of energy storage, it's a new form of energy, etc.
cwkoss 5y ago
There are several major issues with NFTs but I don't think this article identifies any of them: - NFTs are not durable. All of the implementations I've seen are trading "ownership" of URLs that rely on DNS and WHOIS. URL is nice for convenience feature, but they should at least include file hashes, ideally multiple perceptual hashes as well. If there is a central point of failure in a web service, the benefits of decentralization are null. If OpenSea goes down, your NFT is effectively gone: so what is the effective distinction from OpenSea hosting a centralized database? - Scarcity is entirely illusory across ecosystems. A given NFT within one ecosystem may be scarce, but there is nothing preventing duplicate NFTs of the exact same content (or minor pixel changes). That's why perceptual and file hashes would be useful: currently there is little to stop someone from taking popular NFTs on one ecosystem and selling the same images on another ecosystem. Ecosystems have a financial incentive to ignore enforcing duplicated content from other ecosystems: it makes them more money and hurts their competitors at the cost of possible minor reputation risk. Each NFT ecosystem is effectively a separate competing namespace system. Imagine if opensea://google.com and rarible://google.com were entirely independent and routed to servers controlled by competing organizations: chaos. - There is no validation of copyright upon NFT creation. I can find someone else's art, make an NFT and sell it. NFT ecosystems need to evolve into becoming more like auction houses: their brand's value should be based on the trust that the art sold is not counterfeit, and are being sold by the true owner. - NFTs have not succeeded in a test within the courts (afaik, lmk if you have an example of this). NFTs grant no legal rights to the holder. If NFTs granted the exclusive right to license that content AND courts enforced that right, they could be immensely valuable. There is no unified "IP Registry" that I can find a picture/audio/video on the internet and look up who the current owner is to contact for licensing. This is the killer app for NFTs IMO, but whether courts will play along with code-as-law has not been legally validated yet. Fortunately for NFTs, non of these are technically insurmountable. Maybe there are some smaller ecosystems that have better designs, but it seems the big players are all taking the easy path and building a fragile foundation for ownership.
- RyanCavanaugh 5y ago
  If you have a "unified 'IP Registry'", as you (I think correctly) posit would be useful, why does it have to be done with a blockchain? Blockchains are useful for decentralized decisions, but decentralization is antithetical to the kind of thing you would need in order to take an IP claim to court. If you and another person with alleged IP claims to the same work but different registries show up to court, the court has no way to determine which registrar is authoritative for that work, and will ignore both of you. IP without government enforcement is literally useless, so your IP rights are nothing. This is why property records, patents, etc. aren't decentralized. You and another person can't both have a legitimate claim to the same patent based on two different patent decentralized blockchain records, as cool as that concept might sound technically. And once a system is unified, it doesn't need to be a blockchain. You can just have a simple database.
axbytg 5y ago
"A lot of us older grizzled engineers came from an open source culture that, at least aspirationally, built software around ideas of abundance, post-scarcity, universal access, and equality" I can't square this type of thinking with actual analysis. Some tech bro is making $225k arbing AVAX every day? I can literally go and check out his contract on chain. I can deploy it myself! How is that anything but abundance, universal access, and equality? TBH if you check out this guys tweets its like 70% crypto stuff, but anti crypto. I think he found his social echo chamber and is exulting in the attention.

191 points by rwosync 5y ago

Stellar article. It matches a ton of my views. I really appreciate the author for taking the time to follow the industry and keep writing about it. I've been tempted to do the same, but it would be so much work. involved but not only is the space metastasizing at an incredible rate, but even proponents agree that there's a ton of BS. And honestly, it would be terrible for my stress levels to deal with the army of financially motivated proponents.

nathias 5y ago

Yes, the bankster grandpa Dahl is right. Crypto is not for you, it is not for the very wealthy old americans that have build the 'open' web of platforms and sucked the value out of all the corners of the Earth. It's for the rest of us.

kibwen 5y ago
You realize that there's literally nothing stopping Old Money from buying their way into cryptocurrency ecosystems and concentrating their wealth there too, yes? In fact it's even easier for wealthy people to speculate like this, because unlike poor people, wealthy people have disposable income. Cryptocurrency is a playground for the wealthy and the model for our futuristic serfdom dominated by a digital aristocracy (a class that will have almost perfect overlap with our modern aristocracy).
- nathias 5y ago
  There is, its risk. They are rich and risk averse, we are poor and have nothing to lose except our tiny paychecks. Wealthy people have assets, poor people have time. There is very little freedom and social mobility left in our decaying system and crypto is all there is left. There is of course the possibility that the current aristocracy will apropriate our tools for themselves (they sure are trying), but I see the potential for a much better world, one where democracy is restored and enhanced by technology.

fredfoobar 5y ago

The thing is, there isn't a bigger grifter than Stephen Diehl.

VHRanger 5y ago
I dont see him selling anything You can just admit you dont like that he casts shade on stuff you like
- casi18 5y ago
  his company makes the closed source financial infrastructure for digitising cash for multinational corporations, that is made useless by crypto becoming popular. of course he doesnt mention this when writing hit pieces on crypto culture. https://twitter.com/TBSocialist/status/1456963980577153026?s=20 https://twitter.com/TBSocialist/status/1456963980577153026?s...
  - VHRanger 5y ago
    Uh, that's the worse citation source I've ever seen? It's a speculative twitter post? Also, what you said is like saying someone working at Stripe felt threatened by crypto. He's still not selling you a product (anywhere I can find in his online presence!) A full decade later, crypto still isn't used for payments except in PR puff pieces, like the El Salvador fiasco. No one working in serious online payments feels threatened by crypto. Some want to ride the crypto PR mania into popularity, however.
    - casi18 5y ago
      http://www.adjoint.io/ http://www.adjoint.io/ is the company hes not selling me anything, but hes selling to companys who have a choice of the stuff hes making or the stuff others are making as FOSS, and the stuff other people are making is being adopted more than his stuff. I guess that would be annoying. I do notice how a decade in, the goalposts continue to shift. The millions of users are still nothing, the daily volume of transferred value is nothing, the hundreds of daos and communities are nothing, twitter discord reddit ycombinator, all of them delusional. yes its all just scammers and people being scammed. thats the true reality. dread it, run from it, destiny still arrives

w-j-w 5y ago

I find that this article's willingness to frame the crypto debate as "entirely cultural" either dishonest or ignorant. There are real technical concerns that the technology itself isn't capable of scaling the way it's proponents want it to (without causing a climate catastrophe).

h2odragon 5y ago

Soon we get to the point when the Tinkerbell believers become violent against the unfaithful because their heresy is what spoiling the magic. In practise this will mean legal regulation and support, probably by some further perversion of IP laws. Really dont see any end game that aint ugly.

gordian-mind 5y ago
I've never seen that, ever. There are, however, daily calls to unperson people in the crypto space -- just like what S. Diehl is doing here by claiming it is essentially a 'collective delusion worthy of punishment'.
kibwen 5y ago
Keep an eye out for cryptocurrency lobbyists passing laws to force browsers to disable right click > Save Image.

casi18 5y ago

> "Information doesn't want to be free anymore" “Information Wants To Be Free. Information also wants to be expensive....That tension will not go away” - Stuart Brand Think about the whole quote and NFTs will make more sense to you. NFT != DRM go wild, right click and torrent. i'll send you my nft images myself if you want them. the signatures and the economic security of that signature taking place is valuable. there is no scarcity of information in NFTs. these takes are getting so bad, misunderstanding the point so much im not sure how we get people aligned in the discussion at this point. but in the words of satoshi “If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry.”

AnIdiotOnTheNet 5y ago
> the signatures and the economic security of that signature taking place is valuable Except, it isn't. What is the point in having a certificate of ownership of a resource so un-scare that it is practically free? We have achieved post-scarcity of information, and people are desperately trying to cram scarcity-based economics back into it because that's all our society knows how to deal with. We should instead be working to remake society around the new reality, in my opinion. > but in the words of satoshi “If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry.” Yeah, that's what scam artists say. Tell everybody you have a miracle, instill some FOMO, and when people poke at the holes tell them you don't have time to explain it to them or it is too complicated, but trust me it's great.
- casi18 5y ago
  People need to be paid to do the work, so they can eat and pay rent. We dont actually live in a post scarcity star trek world. So we find a way that people can be paid yet the information and content can remain free to everyone. It seems like lots of people like this. For some reason some people really really hate that other people are willing to pay to make content freely available to them. The people buying NFTs are footing the bill for you to have that free information. Sure thats a social/cultural status game with a side of speculation, but in turn we have art that is permeating culture rapidly. As he is quoting a distortion of Stuart Brand, maybe we should see what he would think? well here he is at the ethereum devcon in 2018 talking about this stuff. https://www.youtube.com/watch?v=oLGZdLpHl1w https://www.youtube.com/watch?v=oLGZdLpHl1w Open minded, interested, exploring, doing what he has done for decades and has been admired by people for, being a hacker!

snek_case 5y ago

This writing is truly poetic :')

asfgfsigninoi 5y ago

>But unlike say the eternal emacs/vim war, the divisions on this topic are entirely philosophical and about culture instead of technology. What? My problem with "crypto assets" is that "blockchains" are outperformed by a System/360 while costing billions of dollars to run and drawing about the same power as all datacenters in the world put together. The fact that I like Star Trek is irrelevant.

AlexandrB 5y ago
Indeed. Blockchain tech, at least in its PoW incarnation, seems like a negation of Moore's law. The same operations get slower and less efficient over time.
- asfgfsigninoi 5y ago
  Every incarnation I've heard of is comparably slow. People claim to have ways to improve efficiency but I haven't heard of anything within three orders of magnitude of performance of the Windows 95 machine rusting in my garage.
  - pphysch 5y ago
    The canonical way to get around the inevitable inefficiency of decentralization at scale is to quietly re-add centralization (ReFi?) and bury it under technical neologisms and benchmarks. "Look how fast and innovative $cryptocurrency is! I totally didn't just reinvent a centralized payment settlement system."
setpatchaddress 5y ago
This is specifically about NFTs, and not the general environmental problems with cryptocurrency, which exist, but are solvable with known technology.
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NikolaeVarius 5y ago

Anyway here you go https://thenftbay.org/description.html https://thenftbay.org/description.html https://thenftbay.org/ https://thenftbay.org/ You can have all the NFTs in existence without having to wear out your right click button. We can all be "rich"

firloop 5y ago
Turns out that torrent is mostly full of zeroes: https://github.com/ghuntley/thenftbay.org/issues/9 https://github.com/ghuntley/thenftbay.org/issues/9
- NikolaeVarius 5y ago
  Issue was deleted.
- notpachet 5y ago
  Probably still figuratively the case even after that issue is resolved...
darawk 5y ago
https://www.moma.org/collection/works/79802 https://www.moma.org/collection/works/79802 MOMA is going to be so mad when they find out Starry Night is worthless now.
- jjulius 5y ago
  You're talking about a piece of art that exists on a canvas, with its own bumps/grooves, versus a photo/scan of that art. There is still only one Starry Night in it's exact, original form despite us being able to pull it up on Google Images. It will age, and change with age. A .jpg NFT can literally be saved/copied in it's exact original form an infinite number of times.
  - darawk 5y ago
    So, you're saying that those exact bumps and grooves are the repository of value for Starry Night? That if only we could perfectly replicate those grooves, then it'd have no value?

brighton36 5y ago

Great piece. Really liking Stephen's content lately.

reedf1 5y ago

It's hard to take takes like this seriously when they get the basic premise wrong. It's flowery and cute but its a lot of writing with very little substance.

zepto 5y ago
It’s very hard to take seriously critiques that say a premise is wrong but are unable to say what that wrong premise actually is.
vehemenz 5y ago
How did they get the premise wrong? What premise? If you're going to try undercutting a 1,000 word essay, you'll need to work to get there.
- gordian-mind 5y ago
  He thinks that being able to download every NFT's as a torrent is an own. But nobody cares about this. Also, to me this is not a '1,000 word essay' but a 'carefully crafted attempt to gaslight people without any substantive claims'. Since I qualified it that way, there is no need to refute it. :)
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woah 5y ago

This dude really pumps out the rambly anti-crypto takes. Too bad HN upvotes are not a cryptocurrency or he'd be rich

notpachet 5y ago
Too bad being rich is such a temptation to people, or he'd probably not have to spend time writing these anti-crypto takes decrying the rampant greed that's undermining the technical foundations of internet culture.
- woah 5y ago
  A huge number of people are now paid to work full time on the cryptography, networking, and distributed systems challenges of creating decentralized tech, and open sourcing most of their work. This is paid for by cryptocurrency siphoning off a tiny sliver of transaction volume from the opaque, cronyist, closed source traditional financial system. You want to go back to the old days where decentralized technologies were mostly created as a cute hobby by engineers getting rich off surveillance technology, or by phd students studying to get a job getting rich off surveillance technology?
thrower123 5y ago
It's unfortunate. Before he fell into this rut of anti-crypto screeds in the past year or so, there was some pretty interesting programming language material https://www.stephendiehl.com/posts.html https://www.stephendiehl.com/posts.html
gordian-mind 5y ago
His twitter feed instantly reveals how personal and petty his crusade has become: https://twitter.com/smdiehl https://twitter.com/smdiehl What it shows us is that the veneer of intellectual honesty displayed in the article is just a facade. The real goal is to gaslight and unperson people he dislikes. Sad!

trevyn 5y ago

I think he missed the part where the crypto infrastructure is aggressively based on open-source, abundance, post-scarcity, universal access, and equality. The current "assets" that are traded are indeed meaningless, as is most of what people buy with money beyond food and basic shelter. This is what initial post-scarcity looks like: people being ridiculous with assets because they realize that assets themselves are ridiculous, because post-scarcity. We're in a transition period, a lot of old structures don't work anymore. We're just starting to rebuild critical functions using new ways of thinking. One of my favorite examples: https://cryptoforthehomeless.org/ https://cryptoforthehomeless.org/

pphysch 5y ago
Broadly speaking, people are not buying crypto assets "for the lulz" because they have too much darn money lying around, they are buying them on the speculation that they will appreciate--like Bitcoin--and can be dumped at a profit.
- trevyn 5y ago
  This is exactly the key insight in a post-scarcity environment, though: Beyond food and basic shelter, everything is lulz. A lot of people didn't grow up in that environment of abundance, so they still think that "profit" is serious business and not lulz, but then they use that profit for big houses or yachts or children or other lulz anyway.
  - pphysch 5y ago
    Is it lulz, or is it a desperate attempt to find a financial/economic foothold when traditional footholds (bearable careers, houses, etc.) are increasingly out of reach for Millennials and onward?
    - trevyn 5y ago
      The traditional footholds are no longer relevant. Millennials and onward live on their phones, not in a house or at a workplace. From the traditional perspective, this seems like a loss. From another perspective, it's not.

convexfunction 5y ago

Very weird to frame crypto as contrasting with "an open source culture that, at least aspirationally, built software around ideas of abundance, post-scarcity, universal access, and equality". Were the "older grizzled engineers" all literal communists or what?

zepto 5y ago
Nothing weird about it. Crypto / web3 is about financializing everything. I.e, making everything about money. The goal is to create a gamified world in which all human interactions are controlled via financial incentives. The contrast is not communism, but rather the current gift economy model of open source, where people offer what they want out of intrinsic motivation rather than the desire to accumulate coins in a ledger.
- AlexandrB 5y ago
  This is the really icky part of crypto. It would be deeply ironic if crypto, which was supposedly created in opposition to traditional banking institutions, was able to open the door for those institutions to financialize every nook and cranny of our lives.
  - zepto 5y ago
    I don’t see what’s ironic about it. Those existing banking institutions may not prevail, but that’s irrelevant. The financial engineers behind crypto are not some different breed of human than those who work at Goldman Sachs. Their goal is nothing but financializing all interactions on the web. That is literally what web3 means.
  - pohl 5y ago
    There's no shortage of icky parts of crypto. The whole idea from the outset was to enable an end-run around societal regulation of undesireables like money laundering, hiring hits, funding terrorism, human trafficking, tax evasion, and trading drugs & child pornography.
5y ago

typon 5y ago

Not only is the article completely on point, the writing is marvelous

colesantiago 5y ago

Devil's Advocate: Do cryptocurrencies have _any_ legitimate use case? I can see that some newer and non-mineable coins, Solana, Avalanche, Hedera, XRP, XLM, etc don't have mining issues that the big coins (BTC, ETH, Chia, etc) have. Is what I am seeing from critics that there has been absolutely no progress whatsoever in this space?

newacc9 5y ago
Are there _any_ true Scotsmen left?
- colesantiago 5y ago
  It goes like this, I ask a question and an answer is given, not another question.
  - deleted 5y ago
    [deleted]
curioussavage 5y ago
Of course they do. The biggest one to me is micro transactions to me. Of course being required to pay capital gains on every transaction kills that. It opens up ways to run ad free online services without thinking of dumb schemes like charging exhorbitant amounts of money for digital “stickers” and other crap. Like tipping with a small percentage going to the platform, charging tiny amount per min/hour of usage, tiny subscriptions. In game currencies/economies that use regular crypto.
- pjc50 5y ago
  But you can't do micro transactions on the blockchain - or rather, everyone can't do microtransactions on the blockchain because it's fundamentally anti-scalable and has to transmit every transaction to every full node. (LN does not solve this unless you re-centralise on a common broker with whom you have a channel!) This doesn't solve any of the other problems such as microfraud or friction either.

pphysch 5y ago

It is worth ruminating on how this 21st century Tinkerbell Griftopia started. Most of the proponents would have grown up roughly within the period 1991-2008. After the Cold War, before the Global Financial Crisis (GFC). The zenith of neoliberalism. The globalized USD seemed invincible, a worldwide Tinkerbell. Then the GFC happened. The USD-based system was not infallible after all. But it is hard to overcome our conditioning. Rather than evolve beyond the financial Tinkerbell mindset, increasing numbers of disillusioned have looked for a new Tinkerbell to believe in. Just listen to one of their slogans: "Fix the money, fix the world". Bitcoin happened to pop up also in 2008. The stage was set for a Tinkerbell revolution. My prediction is that the money will never be "fixed", and the global economy will continue to migrate away from the free-market financial Tinkerbell model of the last 75 years and towards computer-driven allocation and trading systems between sovereign governments and global corporations. For example, Ford Motor just inked a (non-binding) partnership with Global Foundries for car chips. Expect to see a lot more of these bilateral economic partnerships and less free-market chaos over the coming decades.

danielvf 5y ago

I work in the crypto industry right now - my job is to keep bad guys from stealing XXX millions of dollars. I've also worked on a team that has done the tech side of several record breaking NFT's sales. And I've sold my own NFTS for fun, and strangers have bought them (wat!). I'm not a "believer". Crypto is indeed full of idiots - and scammers - and crazy people who will say anything to see the token they hold go up - and scammers - and crazy people chasing a 100x buck - and more scammers. And even ignoring the scams, it's like living in an alternate Alice-in-Wonderland world where the rules of normal physics, normal economics, and normal society no longer seem to apply. It is truly a frothing zoo of non-normality. And yet I'm not a "skeptic" either. There are really, really hard technological problems out there, and there are really wonderful people working on them. In the middle of the economic silliness, there's a lot of new things around groups and economics being tried. And amidst the flurry of insanity in NFT world, there is some genuinely good art being created. For example, take the stuff this person creates (https://tylerxhobbs.com/fidenza https://tylerxhobbs.com/fidenza). The process of making it is exactly the kind of stuff hackernews loves, and it is genuinely good art. It's stuff I put on the wall. The whole game around who gets to pay a stupid amount of money to say they own it (https://opensea.io/assets/0xa7d8d9ef8d8ce8992df33d8b8cf4aebabd5bd270/78000313 https://opensea.io/assets/0xa7d8d9ef8d8ce8992df33d8b8cf4aeba...) of them doesn't diminish the fact that art has been created, and the art can be enjoyed anyone. It's easy, when you see lots of people making absurd claims, to go beyond just refuting those claims, and to slip into purely dismissing everything without ever checking to see if there's something of value there. But there is good, interesting stuff going underneath the madness frothing on twitter around crypto. Deep behind the apparent wall of film-flam artists, there's work going on in super weird math, formal software proving with billions of dollars on the line, new programming languages, new ways of scaling consensus, and lots of art being created.

NikolaeVarius 5y ago
Well, I saved a bunch of that art and can view it any time.
- danielvf 5y ago
  Open source funding hits art. Anyone can view it and get the benefit of doing so, the artist got paid to create, somebody gets bragging rights. Everybody wins.

iskander 5y ago

I think what Stephen misses in his campaign against crypto is that the old ideals have already been coopted and smothered with the corporatization of the web and splintering of what was a decentralized ecosystem into a megacorp walled gardens. I know there's a tiny community of non-crypto decentralized web advocates and I hope they win. But, the main force for a return to decentralization is in crypto and the only realistic alternative to a web3 future is one where everything is a property of Google, Facebook, Microsoft, &c

phillipcarter 5y ago
> But, the main force for a return to decentralization is in crypto and the only realistic alternative to a web3 future is one where everything is a property of Google, Facebook, Microsoft, &c It'd be awfully nice if said decentralization was offering more valuable things than just naked ponzi schemes. I'm on team "we're in an ad bubble and it's disgusting that these major companies created a surveillance state" but the alternative presented is an extremely toxic culture of money-obsessed scammers who burn energy with reckless abandon. I'd advise that proponents of cryptocurrency-based systems like "web3" clean their houses out a bit.
- iskander 5y ago
  I think it's easy to miss the content at the core of the movement given how thoroughly it's wrapped in gold rush and scamming. But the more time I spend around the space the more it seems that there is a legitimately transformative force which attracts the gold rush in the first place. And the ethos of people working on e.g. research DAOs, decentralized publishing, crypto art, &c feels right compared to the web2 world.
  - nefitty 5y ago
    It's the classic MBA meets genius nerd situation. "Hey everyone, look at this weird tech thing my brother has been obsessively building for the past year! You can have one for $5!"
  - easrng 5y ago

demygale 5y ago

From the article: "But truly that is the message of the Andersen folktale, that power begets the capacity to inspire delusion in the masses." Does the "Andersen folktale" refer to Tinkerbell? Has nothing to do with the merit of the article or his argument, but Tinkerbell was a character invented by J.M. Barrie for Peter Pan and not a folktale at all.

ejj28 5y ago
I believe the author was referring to The Emperor's New Clothes, which he also mentioned in the article
- demygale 5y ago
  Thanks. My reading comprehension has not powered up yet this morning.
brennen 5y ago
https://en.wikipedia.org/wiki/The_Emperor's_New_Clothes https://en.wikipedia.org/wiki/The_Emperor's_New_Clothes
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streamofdigits 5y ago

Surely somewhere beyond the wall street grifters, the silicon valley data slurpers and the cryptomaniacs there is a fintech community that is actually worth being part of?

h2odragon 5y ago
Casinos?

darawk 5y ago

> A lot of us older grizzled engineers came from an open source culture that, at least aspirationally, built software around ideas of abundance, post-scarcity, universal access, and equality. We may not have always succeeded in achieving such goals, but these ideas informed much of what we now take for granted as the open source substrate that powers well … everything. Lol. And how is that working out for you with the modern internet? I came from this period as well, and I believe in these ideals. But scarcity is a fact of the world, and it is going to exist on the internet whether we like it or not. The only choice we have is whether that scarcity exists in centralized servers and closed protocols, or whether it exists on top of open, decentralized ones. The "post scarcity internet" is a ship that sailed two decades ago, or more. > Much ink has been spilled describing the technical internals of NFTs, and about as equal as much ink has been spent on obscurantism and decentralized woo woo to explain why the internals don’t matter. There is very little common ground on such debates because to the faithful the value of NFTs is a presuppositional truth instilled in them in the revelation of them making money off them. And simultaneously the non-believers can “right-click” or Torrent any NFT as a statement of the rejection of the ontological status of playing word games with the term “own”. I agree with all the author's criticisms of NFTs. However, they all apply equally well to every piece of art ever created. A context in which I also agree with them. NFTs are no more or less stupid than the art market generally. I'm not particularly into art myself, but the art market has a very long history of existing and operating relatively smoothly. Any decent modern day painter could make you a passable copy of Starry Night, but that doesn't make the original any less valuable. > There’s nothing new under the sun and the phenomenon of self-perpetuating faith-based economic schemes are well known to exist, there’s even a term: the Tinkerbell Effect. The phenomenon where things that are thought to exist only because people believe in them. The crypto acolytes really believe they can will into existence a whole new epistemé of value detached from the classical economics of the previous order. And that’s an idea that’s not without some historical precedence. The first book about virality of mania was written by the Scottish journalist Charles Mackay back in 1841 (See Extraordinary Popular Delusions and the Madness of Crowds), and to this day it remains the definitive reference on crypto mania because human nature remains largely invariant across the ages. This was a totally valid criticism in 2013. Just as this criticism was valid of the internet in 2001. It is not valid today. Even if you believe crypto will never offer any transactional utility to anyone, assets like gold derive 99% of their value from their utility as hedges. Ultimately, that is not an economic truth, it is a social truth. People don't like that - they desperately want their assets to have some mathematical, provable value to them. But they don't. Some assets really are equal to their discounted future cash flows. Other assets, like gold and bitcoin, derive their value from inter-subjective social consensus. That does not make them illegitimate, any more than the meaning of words or handshake greetings are illegitimate. > But at the same time, it must be understood that many of us in other intellectual traditions don’t look at the Tinkerbell Griftopia and see a promised land where we sit on a golden throne of monkey JPEGs. We see crypto as a mob of misguided fools repeating the ecological disaster of Easter Island on a global scale for the sole purpose of selling man-child themed Neopets. And some of us in the old guard think that’s not a future we want to see realized It's amusing to me that people lean so hard into the environmental argument. This argument will likely continue to be valid for Bitcoin, but it won't be for Ethereum, and most of the stuff this guy is criticizing lives on top of Ethereum. Hitching your wagon to a contingent, ephemeral feature of the technology who's obsolescence is already planned seems like a major tactical error to me. But go ahead.

victorvosk 5y ago

I have never seen someone so consistently angry about jpegs.

127 5y ago

Seems to me there's a conversation about the technology and conversation about how people react to that technology. Would be nice to talk about only the technology, but I guess in this case the social dimension is impossible to separate.

betwixthewires 5y ago

How exactly is cryptocurrency disconnected from classical economics?

Hjfrf 5y ago
Try pricing any cryptocurrency in a discounted cash flow model.
- betwixthewires 5y ago
  That's not classical economics, that's asset specific. Try pricing USD or a commodity or literally any other asset that doesn't represent financial investment in a business venture in a discounted cash flow model.
  - Hjfrf 5y ago
    Nobody is using cryptocurrency as a currency, securities pricing is the only one that makes sense. Net trade balance (as in fx) gives them no investment value either-it's called a discount curve for a reason. Aside from that, there's stock to flow (lol) and technical analysis of volume/sentiment which are fine for day trading but ignore fundamentals. How would you price them on fundamentals?
    - betwixthewires 5y ago
      It's going to sound hand wavy, but it is a new asset class with a novel value proposition, so analyzing fundamentals will require assessing novel characteristics. How do you price a currency on fundamentals? Some of those indicators apply, like supply, yearly monetary inflation, reserves ("hoarding"), and some don't, like stability of the issuing state, but an analog to that would be network security. How do you price tulips? I'm not going to pretend that there isn't a massive section of demand that is entirely speculative. As far as a novel approach, you have to gauge potential utility, something there aren't very many analogs to in other asset classes. Can you send it over borders without being molested by various bureaucracies? Is there some guy that is going to change how things work under pressure? IMO the unique fundamentals of a cryptocurrency have to do with censorship resistance, permissionlessness, fungibility, some of the hot buzzwords that people use as selling points are more than buzzwords. And there's no century long history of refining the methodology of doing this, we are figuring out exactly what works and what doesn't, which is a part of the process of price discovery with any new asset class.

counternotions 5y ago

Reading this, nodded along mostly in agreement until the author attempted to compare the crypto community to "Scientology and their beliefs about alien thetans and e-meters"... come on, that's a dubious stretch in logic and with that one mean comment makes his points, as a whole, much less credible.

pavlov 5y ago
Have you read some of the stuff written by Bitcoin believers like MicroStrategy CEO Michael Saylor? It is genuinely Scientology-level in its open defiance of physics wrapped into scientific-sounding jargon. Bitcoin is a form of energy storage, it's a new form of energy, etc.

cwkoss 5y ago

There are several major issues with NFTs but I don't think this article identifies any of them: - NFTs are not durable. All of the implementations I've seen are trading "ownership" of URLs that rely on DNS and WHOIS. URL is nice for convenience feature, but they should at least include file hashes, ideally multiple perceptual hashes as well. If there is a central point of failure in a web service, the benefits of decentralization are null. If OpenSea goes down, your NFT is effectively gone: so what is the effective distinction from OpenSea hosting a centralized database? - Scarcity is entirely illusory across ecosystems. A given NFT within one ecosystem may be scarce, but there is nothing preventing duplicate NFTs of the exact same content (or minor pixel changes). That's why perceptual and file hashes would be useful: currently there is little to stop someone from taking popular NFTs on one ecosystem and selling the same images on another ecosystem. Ecosystems have a financial incentive to ignore enforcing duplicated content from other ecosystems: it makes them more money and hurts their competitors at the cost of possible minor reputation risk. Each NFT ecosystem is effectively a separate competing namespace system. Imagine if opensea://google.com and rarible://google.com were entirely independent and routed to servers controlled by competing organizations: chaos. - There is no validation of copyright upon NFT creation. I can find someone else's art, make an NFT and sell it. NFT ecosystems need to evolve into becoming more like auction houses: their brand's value should be based on the trust that the art sold is not counterfeit, and are being sold by the true owner. - NFTs have not succeeded in a test within the courts (afaik, lmk if you have an example of this). NFTs grant no legal rights to the holder. If NFTs granted the exclusive right to license that content AND courts enforced that right, they could be immensely valuable. There is no unified "IP Registry" that I can find a picture/audio/video on the internet and look up who the current owner is to contact for licensing. This is the killer app for NFTs IMO, but whether courts will play along with code-as-law has not been legally validated yet. Fortunately for NFTs, non of these are technically insurmountable. Maybe there are some smaller ecosystems that have better designs, but it seems the big players are all taking the easy path and building a fragile foundation for ownership.

RyanCavanaugh 5y ago
If you have a "unified 'IP Registry'", as you (I think correctly) posit would be useful, why does it have to be done with a blockchain? Blockchains are useful for decentralized decisions, but decentralization is antithetical to the kind of thing you would need in order to take an IP claim to court. If you and another person with alleged IP claims to the same work but different registries show up to court, the court has no way to determine which registrar is authoritative for that work, and will ignore both of you. IP without government enforcement is literally useless, so your IP rights are nothing. This is why property records, patents, etc. aren't decentralized. You and another person can't both have a legitimate claim to the same patent based on two different patent decentralized blockchain records, as cool as that concept might sound technically. And once a system is unified, it doesn't need to be a blockchain. You can just have a simple database.

axbytg 5y ago

"A lot of us older grizzled engineers came from an open source culture that, at least aspirationally, built software around ideas of abundance, post-scarcity, universal access, and equality" I can't square this type of thinking with actual analysis. Some tech bro is making $225k arbing AVAX every day? I can literally go and check out his contract on chain. I can deploy it myself! How is that anything but abundance, universal access, and equality? TBH if you check out this guys tweets its like 70% crypto stuff, but anti crypto. I think he found his social echo chamber and is exulting in the attention.