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The Handwavy Technobabble Nothingburger of Crypto

• ufo 5y ago
  I'd add another sub-category: the so-called algorithmic stablecoins. Their biggest flaws being that they can blow up catastrophically in extreme events, something which may be hidden between a veneer of convoluted logic.
• 1970-01-01 5y ago
  >Until proven otherwise it seems like the goal of the crypto ecosystem is to build an enormous unregulated casino with a crazy party scene. The goal of crypto was to move blockchains from theory to reality. Upsetting traditional FinTech and its regulation was a side-effect of the experiment.
  • notpachet 5y ago
    This is like saying that the goal of the Manhattan project was to reach new heights in our understanding of atomic physics. The people paying for the work had very clear expectations in mind.
• anonymoushn 5y ago
  This particular source is extremely low quality and is motivated by the author's undisclosed competing product. I would like to see higher quality sources on the front page of hacker news one day.
  • traeregan 5y ago
    > the author's undisclosed competing product Which is: http://adjoint.io http://adjoint.io "Adjoint digitises cash and settlement processes for multinational corporates."
    • yannoninator 5y ago
      Interesting! What advantage does Adjoint have over all the cryptocurrencies in existence can it handle payments without your bank declining your payment or chargebacks?
      • realce 5y ago
        I think the main advantage is that it's owned by this one guy.
        • meheleventyone 5y ago
          There seems to be three guys (at least) and it doesn't look like it competes with crypto as much as it is a product for financial firms.
    • adamgordonbell 5y ago
      I always assumed his anti-crypto writing was related to being in the Haskell community and a lot of Haskell community really going all-in for crypto at some point several years ago. I think because the problems were interesting and the type of hard that Haskell people like. It's news to me he has other reasons to dislike crypto. I didn't know about adjoint, but that is very curious. I wonder which came first, the distaste or the financial company. I suspect his opinion would be the same regardless of adjoint.
    • louwrentius 5y ago
      It is a business-to-business product that doesn't seem to have anything to do with crypto. It's not like crypto is a thread for this business.
    • mkeeter 5y ago
      It's even funnier than that – back in 2019, Adjoint was bragging about "delivering blockchain technology built specifically for the needs of the financial industry" [1] No idea if they pivoted away from blockchain or just stopped saying it on their website, but it makes me take this with several grains of salt. [1] https://web.archive.org/web/20190502154457/https://www.adjoint.io/ https://web.archive.org/web/20190502154457/https://www.adjoi...
  • bhouston 5y ago
    Can you point out what is low quality about it? Right now it seems that you are just making that claim because you disagree with the thesis of the article. e.g. https://www.txstate.edu/philosophy/resources/fallacy-definitions/Ad-Hominem.html https://www.txstate.edu/philosophy/resources/fallacy-definit...
    • briantakita 5y ago
      Using the phrase "woo woo" along with various strawmen & many omissions of why crypto is being adopted was the extent of his criticism, hence low quality. He does not understand crypto & is trying to sell his competing product. If he were to talk about decentralization/distribution vs centralization along with who controls the fiat money supply & who benefits & who does not benefit from the fiat central bank policies, then he would at least begin to broach the subject of why crypto currencies are being adopted.
      • bhouston 5y ago
        > If he were to talk about decentralization/distribution vs centralization along with who controls the fiat money supply & who benefits & who does not benefit from the fiat central bank policies, then he would at least begin to broach the subject of why crypto currencies are being adopted. Is that why crypto is being adopted? Are you serious? I bet nearly no one who buys crypto even knows what fiat money is nor have they have a clue as to the ideas of the Austrian school of economists. We live in an age of memes and discords. Crypto and NFTs are primarily being adopted because they are speculative vehicles that generally go up and to the right. It is quite simple.
        • chishaku 5y ago
          > I bet nearly no one who buys crypto even knows what fiat money is You're uninformed. GS, BofA, Barclays, Citi, CS, DB, JPM, MS, UBS, WF and countless funds. The current hype cycle would be nothing without the institutional support. But even before institutional investors started jumping in, traders and other employees of the above institutions have long been a key part of crypto markets.
  • deleted 5y ago
    [deleted]
  • Accujack 5y ago
    I agree. Just the fact that he lumps Doge and Bitcoin together into "meme coins" tells me he has no idea what he's talking about or that he has an ulterior motive. Whatever you think about those two coins, they are not really similar, especially given that some nations have made Bitcoin legal tender at this point.
    • deleted 5y ago
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    • pcthrowaway 5y ago
      I'm very much looking forward to seeing the way cryptocurrency revolutionizes the world in the next 20-50 years, but even I don't see any difference between Dogecoin and Bitcoin other than Doge having a dog on it. Yes, it's pretty unorthodox to consider Bitcoin a memecoin, but it is fundamentally nearly identical to doge, but with even less energy efficiency. The fact that it's a more established asset class with wider adoption does make it more useful to most people, but this isn't due to anything intrinsic to bitcoin or dogecoin
      • MrMan 5y ago
        It's the same code but doge has inflation?
        • pcthrowaway 5y ago
          Fair point, doge supply will increase indefinitely, while bitcoin will increase towards an upper bound.
  • louwrentius 5y ago
    Thank you for sharing in detail why you think the article is so low quality. What can be stated without evidence, can be dismissed without evidence.
    • anonymoushn 5y ago
      No problem. Let's have a look at a high-qualify evidence-backed paragraph of the fine article: > A stablecoin bank would be subject to exactly the same FinCEN and OFAC money movement restrictions and compliance checks as banks; so know your customer gating, counter-terrorism financing, sanctions enforcement, and anti-money laundering enforcement. And these compliance requirements are the almost always the bottleneck consumers may encounter when doing cross-border transactions, and it’s not a technology issue. I'm not sure what the fine author means by "A stablecoin bank," and he doesn't really tell us, but it seems like he means a stablecoin issuer who processes creations and redemptions, but doesn't control the use of stablecoins otherwise. In this case, an example of "a completely legal and above-board stablecoin (which doesn’t exist today)" might be GUSD. I'm also not sure why he thinks DAI is illegal, because again he just throws out a bunch of claims without substantiating them. Anyway, he was actually talking about how stablecoins don't provide any benefit for international settlements. For whatever reason, I have bank accounts in the US and Japan, and I often have to move funds to Japan to pay bills. This takes about a week and costs about 50 basis points. The fine author would like us to know that the 1-week delay and 50 basis point charge are required by law. While this is not my area of expertise, my impression is that none of the regulations mentioned by the author require this process to take 1 week and cost 50 basis points when I am remitting funds *to myself*. I am under the impression, which may be wrong, that I am not breaking the law if I pay for goods in SPL USDC instead of waiting a week to move dollars from FTX to account at Shinsei bank via my US bank and Transferwise at the cost of taking a phone call at 2am and paying 50 basis points plus 20 dollars. > Nothing about stablecoins is either necessary nor desirable, and any alleged improvement these systems may offer at the moment are purely illusory and derived only from the unstable situation that they temporarily inhabit a yet-unregulated shadow banking system that is either non-compliant or entirely scofflawing. This seems like an unsubstantiated claim that it's a crime to pay for goods and services using SPL USDC in every country. I don't think that's true, but maybe if the fine author could elaborate I could learn more here. > A regulated stablecoin bank is just a bank, but with a core ledger built on a terribly inefficient and bizarre piece of software not built for that purpose. All this while guzzling entire nation states worth of energy for no reason. Using inefficient blockchain as core banking software makes old legacy core banking solutions like Jack Henry look like a Ferrari by comparison. Our European allies all built extremely reliable real time payments like SEPA that work marvelously and they didn’t need any stablecoins. The fine author seems unaware that there are currently deployed blockchains that can process the transaction volume of Visa and use less energy than Visa. That's discouraging, given that the fine author has chosen to write in such an authoritative tone about these technologies. SEPA might be fine if you live in Europe and everyone you ever need to pay or accept payments from lives in Europe and has never lived anywhere else. It just doesn't do much for me personally when I have to move money from the US to Japan to pay living expenses, my lawyer is in Dubai and wants to get paid in Switzerland, and my developer in Japan wants to get paid in Hong Kong. So I just keep paying like $60 and taking phone calls at 2am to send wire transfers to my lawyer and dreaming of the day I can pay less than a penny and not take any phone calls at 2am if my lawyer adopts existing technology. The fine author would like me to know that this isn't actually a problem and I'm just delusional. That's not particularly helpful. For the rest of the things the fine author has ever written, see here: https://en.wikipedia.org/wiki/Brandolini%27s_law https://en.wikipedia.org/wiki/Brandolini%27s_law
  • nice_byte 5y ago
    explains why that particular person's entire personality seemed to be based around anti-cryptocurrency sentiment.
  • ur-whale 5y ago
    > motivated by the author's undisclosed competing product Thank you for this, I have been wondering why Diehl has been spewing so much hate and disinformation about cryptos. The least he could have done if he had even a shred of intellectual honesty would have been to disclose it indeed. [EDIT]: It's even sadder when you go check the site. The look is exactly that of a scamcoin site, all the way to the animated triangulation and the (two suits and a tech guy) pictures.
• echopurity 5y ago
  HN desperate to read any ignorant take on crypto so they feel better about their Tesla paper.
• guscost 5y ago
  > bitcoin is a meme token for gambling on a fantasy about living in a cyberpunk dystopia. Ok, thanks. > It’s a scary but essential truth to realise that normal software engineers like us are an integral part of society’s immune system against the enormous moral hazard of technology-hyped asset bubbles metastasizing into systemic risk. This sure sounds like “a fantasy about living in a cyberpunk dystopia” too. Maybe the author should diversify a little into Bitcoin, and relax.
• mandmandam 5y ago
  Another rant about crypto which ignores Nano, which has been around for 6 years now. *y*a*w*n*. There is immediate and obvious utility in being able to send value instantly with no fees, with no dependence on a centralized authority. Nano just got its own currency ticker - XNO - and avoids every fault this author finds in the rest of the field. Mr. Diehl went far enough to pick out some flaws, and then generalized them onto every variant of the technology without going that little bit further to actually check if he's right or not. Laziness. There's so many 'Edisons' out there who have decided that because 9,999 filaments don't work that well, lightbulbs are a dead technology. And it's so tiresome - because there's a feckin LED lighthouse beaming photons across the planet as we speak.
  • rvz 5y ago
    > Another rant about crypto which ignores Nano, which has been around for 6 years now. And also something like Stellar or Hedera which isn't mineable at all and are used for CBDCs.
    • mandmandam 5y ago
      Or Algorand, etc. I get that this is all 'new' and confusing, but the know-it-all condescension really rubs me the wrong way - do they clone these people or what? Where do they all come from?
      • bildung 5y ago
        All of Stellar, Hedera and Algorand have a big centralization problem, they have solved nothing. Stellar and Ripple aren't even proper cryptocurrencies unless you allow for a very lenient definition. > the know-it-all condescension really rubs me the wrong way - do they clone these people or what? Where do they all come from? In my experience the people being very optimistic about crypto real world use cases usually have their first exposure with economic theory from within the crypto sphere and lack the real world experience to know some actual pain points of the current economic system. For example the oracle problem is severly glossed over by smart contract approaches, which mostly try to solve trust issues that are essentially solved issues in the real world.
• coralreef 5y ago
  This entire post seems to avoid or lack the understanding of the basic reasons blockchain were created; that is, to offer a decentralized, permissionless, censorship-resistant network. This was Satoshi's vision, and those values are a blockchain's express priority over scale and efficiency. Centralization is great for speed and efficiency, not so great for protection against authoritarian actors (governments or central banks).
  • flenserboy 5y ago
    What's most hated about Satoshi's vision is how it prevents, and at the same time, theft through intentional inflation and easily picking/rewarding winners. The lifeblood of contemporary governments is cheating, and thus it makes sense that they will have strong immune responses against anything getting between them and their nutrients.
  • jrd259 5y ago
    We have one already: cash. As for protection against authoritarian actors. If your state has already gone full panopticon, crypto won't save you, indeed the state will mandate exclusive use of their chosen crypto, gaining even more visibility into your life. If your state has not yet done so, you should fight to preserve liberty and the rule of law. If your country turns into a full-out surveillance state, you are not going to overthrow it by buying things with Bitcoin. I would like to see some data on what actually valuable applications or businesses have been enabled (or simply improved) by crypto currency. I regret that the only business I know to be benefiting from bitcoin is ransomware.
    • badkitty99 5y ago
      Cash printer go burrrr
    • coralreef 5y ago
      > We have one already: cash. Cash is awful if you live in Turkey, Venezuela, Zimbabwe, Lebanon, etc. The USD has lost 90% of its purchasing power since the 1950's, meaning cash is toxic over longer time horizons. You cannot have a society where everyone seeks to get rid of the reserve asset over time. > If your country turns into a full-out surveillance state, you are not going to overthrow it by buying things with Bitcoin. You're going to have much better chances anonymizing yourself, compared to say a bank account. > I would like to see some data on what actually valuable applications or businesses have been enabled (or simply improved) by crypto currency. Bitcoin is a savings account in a world where Bank of America's Savings account yields you 0.01% APY, or up to 0.04% if you have more money. We are increasingly forced to take on more risk simply to maintain the purchasing power of our wealth.
• todd8 5y ago
  From the article: > Any application that could be done on a blockchain could be better done on a centralized database. Except crime. Governments, world-wide, may end up emulating China, which is planning to outlaw other crypto-currencies while providing its own. The information gathered by a national government monopolizing crypto-currency is simply too appealing to those that would like to deter crime, stop tax-avoidance, or even understand in real-time what is going on in their economies. After China, I believe that other nations are likely to do the same thing and outlaw or heavily regulate crypto.
  • CTDOCodebases 5y ago
    They will just try to turn crypto into the existing banking network by forcing citizen coin holders onto the exchanges, banning transactions from non custodial addresses and continuing to control the on-ramps and off-ramps. This way they can monitor transaction and if they don’t like something or are suspicious they can just seize the funds once they hit an on-ramp/off-ramp. A CBDC will be introduced and all other USD stable coins will be banned and consider counterfeit currency. The US CBDC will replace stable coins and allow the US to continue exporting its currency abolishing other currencies in the process while gathering intelligence.
    • Jerrrry 5y ago
      This. https://en.wikipedia.org/wiki/Executive_Order_6102 https://en.wikipedia.org/wiki/Executive_Order_6102 Remember, the use of encryption above a certain keyspace is still considered exporting arms, and subject to ITAR. They will let more suffer from the bubble to allow swift legal reform.
      • CTDOCodebases 5y ago
        Maybe the bubble will be popped deliberately like it was back in 2017.[0] [0] https://www.coindesk.com/markets/2019/10/22/trump-administration-popped-2017-bitcoin-bubble-ex-cftc-chair-says/ https://www.coindesk.com/markets/2019/10/22/trump-administra...
• IronIvan 5y ago
  > Any application that could be done on a blockchain could be better done on a centralized database. Except crime. After all as we all know: If you've got nothing to hide, you've got nothing to fear. And look at how inefficient all these permissionless, trustless protocols are! What a waste! Let's just all trust a central authority and think of the savings and the children.
  • deleted 5y ago
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  • padobson 5y ago
    Yeah, this is what I don't understand from the naysayers. Anyone who says blockchain-driven assets don't have intrinsic value seems to ignore the value of trust - the ability to trust that the ledger is accurate seems extremely valuable. The author of the article skips over the question entirely, maybe he's addressed it elsewhere, but if the crypto skeptics continue to ignore one of its primary value propositions, I have to assume either ignorance or bad faith.
    • swenger 5y ago
      A blockchain doesn’t provide trust, though. A person who doesn’t understand technology doesn’t trust a distributed ledger, but they do trust their centralised bank because it’s regulated.
      • core-utility 5y ago
        There are plenty of non-tech people with investments in crypto that would disagree with you. Also, some exchanges are FDIC insured.
      • eof 5y ago
        They do though. A very small percentage of current holders of crypto have an understanding of the technology. Trust will (continue to) come with time.
      • hackinthebochs 5y ago
• h2odragon 5y ago
  Dogecoin started out as an explicitly value-free "let's play with this without risk or seriousness" fork of Bitcoin. The speed with which the scams took it over was instructive and I think indicative of everything that's played out since then... In that sense, Dogecoin was a rousing, complete, wonderful success.
  • can16358p 5y ago
    I remember reports telling Dogecoin was one of the safest cryptos to invest in, as it doesn't promise anything, accepts itself existing only for a meme, and all the reports were underlying its honesty, telling "it is what it is". Then it skyrocketed and became a purely speculative one, of course it's not Dogecoin's fault but more like Elon's.
• jude- 5y ago
  We get it, Steve. You don't like crypto. And it upsets you that other people like things you don't like, so you feel compelled to write the same useless whine over and over to cope. Get a life
  • ethanbond 5y ago
    There are significant negative externalities created by your toys.
    • SubiculumCode 5y ago
      and also by the production of Legos and Xboxes, and all the other toys.
      • ethanbond 5y ago
        Yep and if someone wants to criticize those things, it doesn’t mean that they just hate fun.
• dvh1990 5y ago
  "Any application that could be done on a blockchain could be better done on a centralized database. Except crime." So you're saying there IS a use case :)
  • nikanj 5y ago
    And that use case is HUGE. Cryptos are really enabling unprecedented efficiency in a wide variety of crime
    • Scarblac 5y ago
      Imagine when ransoms had to be paid in suitcases full of dollar bills with non-sequential serial numbers. Bitcoin has made it all so much easier.
      • germinalphrase 5y ago
        If all transaction can be tracked, what prevents the [FBI\et al] from simply following the bitcoin trail until someone cashes out?
        • andrewla 5y ago
          The fungibility of cash is what makes it hard, although likely law enforcement will be able to trace many of these. For example, you take your ill-gotten gains and just randomly send $1 to a million different addresses, some owned by you, some owned by random people or exchanges or whatever. Nobody's going to say no to free money, so the trail goes cold. Or you use an offshore exchange that doesn't really practice strong KYC, and exchange the ill-gotten gains for a different cryptocurrency and now without the private ledger of the exchange, the trail is cold. At one point "mixing services" were the talk of the town, but at this point it's clear that you can get 99% of the benefits of mixing without having to go through an explicit service.
          • zaphar 5y ago
• deleted 5y ago
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• chias 5y ago
  I think the thing that bothers me most about using "crypto" to mean "cryptocurrency" is when people write articles deriding the "nothingburger of crypto", I feel conflicted. Part of me wonders how many non-tech people we're conditioning to assume cryptography is worthless in 2021.
  • jcbrand 5y ago
    I'd say about zero.
• nikanj 5y ago
  I think the biggest lesson here is that people really, really love unregulated gambling. The same way they love doing drugs, making narcotics an extremely profitable business. If we don’t legalize the things our population deeply desire, the criminal elements are more than happy to step up and provide said services.
  • motohagiography 5y ago
    The authors example use cases about a database doing everything except crime summarizes it well. One persons crime is another persons freedom. If you rephrased it as saying, the only thing blockchains provide that a database doesn't is freedom, I think the resounding response would be: Yes. What I think anti-crypto people object to is the freedom of others, because it represents a limit and undermines the necessary absolute and total Hobbesian sovereignty and dominion of the systems that provide them with their own status, which is based on something other than consent and desire, and when I read these objections, most of what I interpret is that implicit humiliation. Gambling provides opportunity for people to live independent of being subordinate to an employer, as if your employees suddenly don't have to work for you, it's hard to build and scale social stability and wealth. I sympathize with the morality of reducing gambling as being appropriate for over a thousand years ago, but today? You also can't use shame to control people who can afford to walk away. The current financial system is designed by-and-for creditors as a means of leverage over debtors, and crypto is explicitly not. The only problems of gambling are really problems with debts, and better laws limiting the power of creditors would solve that. The interests behind the criticisms are clear, but to me dressing them up and carting them around as moral is a bit much.
    • nikanj 5y ago
      The very same people complain about Nanny State when they’re stopped from getting scammed, and scream for justice and legal action once they manage to get scammed after all. See also: people getting absolutely furious when the bank stops them from wiring money to Nigerian scammers for their million-dollar lottery win - and then demanding the same bank reverses the transactions after the jig is up. They want to freely gamble with cryptos now that everything is going to the moon, but are going to be demanding answers once the bubble pops and the casino takes their life savings
• dqpb 5y ago
  This is the sound someone makes when they realizing they're slowing down and everyone around them is speeding up. Update: It seems I've triggered some sensitive HN'rs Here's how to tell when someone has a real argument - they pick the best possible interpretation of the theoretical foundation of a system and then they disprove it. Here's how to tell when someone is full of shit - they complain about meme coins.
• romille 5y ago
  This guy has a personal brand by now for putting down crypto. Like stop writing about it if you don’t like it!
  • the_gastropod 5y ago
    Beginning in the 1960s, Clair Cameron Patterson was very vocal against the widespread use of leaded gasolines. He was ignored and mocked for over 20 years, but kept going because he knew it was damaging, and fought to end its use. He didn't just "not like it", he was compelled to improve the world. Whether you agree with him or not, Stephen believes crypto is damaging to society. As such, he is driven to help root it out.
    • mechanical_bear 5y ago
      Stephen has a competing product, and a hidden financial motive for slagging cryptocurrency.
      • the_gastropod 5y ago
        A competing product? Not sure how "providing data analytics to community banks" is a competing product to... cryptocurrency? But sure.. you got 'em! <we should improve society somewhat meme.jpg>
• bradhe 5y ago
  Author's not wrong. I've seen some seriously cringe-inducing "talks" about what blockchain is and is not, and what it can or cannot unlock for you. I also find NFTs to be just...just...confusing. But mostly I don't care. Do whatever you like as long as you're not hurting anyone. On average people are getting misinformed about some technologies, at worst willingly grifted. But I've seen worse technology trends come (and, by the way, go).
  • bgroat 5y ago
    The problem is that PoW is hurting everyone via greenhouse emissions.
    • dqpb 5y ago
      Algorand is carbon negative.
      • bgroat 5y ago
        Which is awesome, but I Algorand is < 0.5% of the crypto-ecosystem
        • dqpb 5y ago
          Well, this is how progress happens. Someone complains about a whole industry in broad brushstrokes, someone else invalidates the complaint with a counter example, and we move forward with the better option.
          • bradhe 5y ago
            Eh, a "clean" coal burning power plant (do those exist?) doesn't excuse the coal burning power industry. Same for crypto.
            • dqpb 5y ago
              Let me get this straight, you think I’m saying that because Algorand is faster, cheaper, and more energy efficient than Bitcoin and Ethereum, that that makes it ok that Bitcoin and Ethereum are slow, expensive, and inefficient? Have you never gone through the exercise of comparing alternatives before? Or evaluating the strengths and weaknesses of competing technologies?
• Scarblac 5y ago
  I wonder how much of the Crypto hype is because the US banking system still lives in the 1980s or thereabouts. If everybody in the US had access to bank accounts with easy electronic transfers within 5 seconds for no charge, no chargebacks and so on, as people are used to in the EU, would people still be excited about Bitcoin?
  • deleted 5y ago
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  • rchowe 5y ago
    Most Bitcoin transactions have a quite high transaction cost, and I would argue that chargebacks are an important consumer protection.
    • tommek4077 5y ago
      Only if you do your transaction on the blockchain. Most are done internally. It's like your bank is not sending someone with a suitcase full of money just because you pay your phone bill.
      • jakear 5y ago
        It's strange to me how the only two options are "pay obscene transaction fees" or "just keep your crypto in a centralized exchange and hope they don't go MtGox". Is it impossible to achieve the stated benefit of being able to make quick and easy transactions and being decentralized? I spent some time researching the best low transaction fee easily accessible crypto for making a sort of crypto Patreon, but the vast vast majority of all crypto information available was folks speculating what was going to go "up", nobody seems interested in what is actually a decent form of money (cheap&easy to exchange, cheap&easy to transfer, and stable). I suppose it makes some sense from a game theoretic standpoint. If we consider the decision making entities in the game to be the massive crypto exchanges and miners, the best way they make money is by transaction fees and exchange fees, so they aren't likely to come up with a great micro-transaction and micro-exchange fee system. Oh well.
• flignats 5y ago
  It's the world's first globally accessible, decentralized, transparent, immutable ledger. Lots of value and future value that is being unlocked.
• kobieyc 5y ago
  Excellent straw-manning 10/10
• bhouston 5y ago
  Stephen is mostly likely right that the decentralized nature of Crypto is not really a benefit. That said digital cash and tokens and NFTs do have value and I expect them to get even more popular. I am reminded of the P2P/decentralized nature of Napster and how it was going to be a revolution. Napter's P2P infrastructure (and later Gnutelle and Bittorrent) allowed it to operate in a legal gray zone or at least have deniability. But Napster's lasting innovation wasn't P2P, it was showing how popular digital music was when it was being fought by the powers that be (and Bittorrent showed how popular digital films would be.) BitTorrent is still around, primarily for pirating content. It is no where near as popular as the legal means of accessing and distributing digital music and video though -- Netflix, Apple Music, Spotify, Disney+ have grabbed the main innovation and separated it from the decentralized P2P infrastructure that first enabled it. I think crypto is likely going in that direction. People want digital cash. People want NFTs. But they do not need this wasteful decentralized infrastructure and the complete anonymity that it is designed around. That said, I think the criminal needs will keep decentralized crypto around forever, even after it is likely banned in most places, just like BitTorrent continues today. Crypto servers a great purpose just like Napster/Gnutella and Bitorrent did -- it is forcing us to modernize our traditional banking infrastructure to compete with these wildcat currencies. Digital cash versions of each major currency will exist, be formally blessed by the powers that be, they will probably have at least semi-centralized infrastructure, KYC and rollback capabilities and near 0 gas fees. KYC and rollback capabilities are key for reducing crime.
  • __alexs 5y ago
    > That said digital cash and tokens and NFTs do have value and I expect them to get even more popular. Literally all my cash is already digital.
    • bhouston 5y ago
      You are referring to Google Pay/Apple Pay/VISA. This is correct and it is mostly what people use these days. But it isn't on a block chain and it isn't extensible. With our current digital cash I can not create NFTs and trade then around. It also doesn't allow for arbitrarily large transfers. It doesn't replace ACH or Interac. There are no public ledgers. I think that digital cash with the features I described above will come into existence, as parallel structures to the existing ones, but probably will see significantly more adoption. Right now we are seeing fracturing of the cash system with PayPal, Stripe, Venmo, etc. I think there could easily be a consolidation period around block chain official state currencies at some point.
• deleted 5y ago
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• CTDOCodebases 5y ago
  Funny how he fails to mention that Tether regardless of how dodgy it is provides a lifeline to people in countries undergoing massive inflation like Lebanon. Legal or not a back up option to a failed currency has real utility. This is why I suspect countries will push ahead with CBDCs and seek to export their use for financial and intelligence reasons.
  • deleted 5y ago
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• tanseydavid 5y ago
  I stopped at "decentralized woo woo".
• c7DJTLrn 5y ago
  I wish I could have discussions about cryptocurrency as a technology rather than a "get rich quick" scheme. Back in 2017 I was really excited about Ethereum and the promises of scalability not just from Vitalik B. but from other developers too. I still think that cryptocurrency could do good for the world if the issues can be resolved but for now everybody's got their eyes on the price, not the technology's horizon.
  • bob331 5y ago
    It has no use case. Zero
    • ravenstine 5y ago
      Case closed. /s That's not a particularly valuable contribution to the discussion, nor is it even true. A use case for crypto is to be independent of the establishment financial system. This isn't important to that many people, but it is a use case, and there are valid reasons for it.
    • dsco 5y ago
      What if you’re stuck in Turkey with its current inflation and want to hedge against it? Or what if you’re someone who would like to in a permissionless way buy Bitcoin options? What the Hacker News crowd generally misses about crypto is that it’s technology, ideology and finance in one package. They keep on arguing against the storage model itself (centralized vs decentralized) and miss the bigger picture. So many of these anti blockchain comments remind me of the initial HN reaction to Dropbox and people saying that “hey, you can just set this up yourself on a Linux machine”. You’re missing the point. A 3 trillion dollar industry doesn’t give a shit about your database takes and how it’s all a bubble - we’re way beyond that.
    • c7DJTLrn 5y ago
      Check out Monero. Untraceable, decentralised transactions have no use case?
      • floatboth 5y ago
• LocalH 5y ago
  "Cryptocurrency", not "Crypto". Title should be updated to correct this.
  • floatboth 5y ago
    Unfortunately that battle is lost :/
    • timbit42 5y ago
      It is for you because you've given up.
• nathias 5y ago
  Any application that could be done on a blockchain could be better done on my centralized database. Buy now.
• SubiculumCode 5y ago
  I submitted this recently, as a counterpoint to this article: Yes, You May Need a Blockchain (coindesk.com) https://news.ycombinator.com/item?id=29319205 https://news.ycombinator.com/item?id=29319205
• andrewla 5y ago
  If anything, I think stablecoins are way more dangerous than the author indicates. People talk about things like Bitcoin as a threat to sovereign currencies, and they are, as competitors, of sorts. But stablecoins are another matter entirely. One huge aspect of the value of sovereign currencies is that they are instruments of law -- courts will settle in them as a lowest common denominator, and it is safe to use them in all sorts of settings as a result. When dollar-denominated assets appear, they always run the risk of being considered a dollar-equivalent. For example, bank deposits are dollar-denominated, and are considered dollar-equivalent (even dollar-superior, in the sense that there are transactions that you can't legally do with specie, only with bank deposits, like buy stocks). That means that if banks (which are businesses) are not good at doing business, the government is essentially forced to treat them as dollar-equivalents by making them whole. See Savings & Loan Crisis, the GFC, LTCG, etc., etc. Stablecoins piggyback on the legal aspects of dollars, and as long as you treat them as dollar-denominated assets, you're fine. The second you treat them as dollar-equivalents, you run the risk of a change in the value of that asset being something that the government is forced into supporting.
  • JuliusBranson 5y ago
    Stablecoins are dangerous because they have the potential to change the current selection effects on the elite. For one thing, stablecoins subvert the ability of the Federal Reserve to print money and give it to their friends at Goldman Sachs et al --- normally this is supposed to result in their friends have a larger fraction of money than they previously had. You start with 1 dollar, David at Goldman Sachs starts with 1 dollar, you each have 50% of the wealth in the "nation." David and his friends start printing themselves money, soon they have 99 dollars and you have 1, and you can't compete because they'll lock you up with violence for being a "counterfeiter." That's how inflation works. When there's stablecoin, you just put your dollar in stablecoin before they print the money, the dollar inflates, stablecoin goes up proportionately, you spend the stablecoin and things remain fair. This obviously curtails the ability of the ruling class to reproduce itself. More than that, if the pool of people getting billions through stablecoins is more random than the pool of people who got rich on the dollar, then the ruling class will change to be more representative of the population as a whole. This could cause massive cultural changes, consequently.
• can16358p 5y ago
  Not being pegged to a centralized, state-controlled currency is a dealbreaker for me. It's still in infancy and it's true that 99% of the projects are get-rich-quick schemes with no intrinsic value. Though, I think the author lives in a country with a trustworthy government because that's not the case for many people including me. In the last two days my country's currency has shaken much more than crypto and I don't trust a single word my government says. In this case, crypto really shines. In addition, as more services get integrated into crypto ecosystem and as get-rich bubbles wear off, combined with solutions to scalability and speed problems, many will see much more value in crypto. 12 years is nothing when reinventing fundamental workings of economics is at stake. Give it more time.
  • 3np 5y ago
    > Not being pegged to a centralized, state-controlled currency is a dealbreaker for me Pretty sure you mean the opposite
    • optimalsolver 5y ago
      He probably did, but there's wisdom in his typo.
    • IggleSniggle 5y ago
      I don’t think so. I think they were saying there’s a benefit to being able to transact using a concurrency of a trusted govt when you’re own govt is not trusted.
  • rzanella 5y ago
    Not being pegged to a state-controlled currency means your devalued currency competes with stronger ones, at least on the fictitious transitional period, you're sure you want that ? Assuming a stateless money, when/if someone then steals your crypto coin, which gov't backed law/judicial system are you gonna turn to ?
    • dinobones 5y ago
      if you aren’t wealthy you are effectively priced out of the US law/judicial system anyway. If I took $5,000, maybe even $10,000 from you right now there would be almost nothing you could do because the legal efforts to pursue me for that amount would likely equal or surpass that.
• kinnth 5y ago
  Decentralisation offers the following value over centralisation: * Control by a majority, not a minority. (democratic) * Open ecosystem that visible and able to be analysed by anyone (transparent) * Immutable (no one makes up assets without everyone knowing about it) * Fair. Same price for everyone at all times, no chance of a monopoly. Those don't exist in central systems and so the price you must pay for that is speed, scalability and anonymity (which is both used for good or bad). I don't believe crypto is the answer to everything, but I certainly don't see it as useless.
  • the_optimist 5y ago
    Can you describe your anticipated role of decentralization under China or US regulation? Do you simply expect and plan a parallel black market?
  • brazzy 5y ago
    > Control by a majority, not a minority. (democratic) In what way is that even remotely true for any major cryptocurrency? >Open ecosystem that visible and able to be analysed by anyone (transparent) Right. How is that Tether audit going again? And how did all that transparency prevent this week's multimillion dollar Oopsie? > Immutable (no one makes up assets without everyone knowing about it) Except, you know, the entire thing being made up by people who automatically get ridiculously large shares of the pie as "early adopters". > Fair. Same price for everyone at all times, no chance of a monopoly. See above. And do you have any idea how rampant market manipulation is?
  • roywiggins 5y ago
    Proof of Work/Stake are both oligopolistic, not democratic. If you can buy yourself a larger vote, that's not democratic.
  • throwawayffffas 5y ago
    First of all decentralization is not a property solely confined to cryptocurrencies. The traditional banking system is decentralized, there are thousands of banks that are all separate entities. There is no single central bank, even central banks are not unique, every country has one. Additionally the traditional banking system and cash have a huge advantage, no global consensus is required, Iran still has a banking system much to the dismay of the American government. > *Control by a majority, not a minority. (democratic) It's a majority of hash power in the case of PoW and a majority of capital in the case of PoS, since hash power costs capital in both cases it's a majority of capital that has control, oh and the systems devs of course a small group that essentially decides the future of the system. > * Open ecosystem that visible and able to be analysed by anyone (transparent) That is not necessarily a good thing, the fact that all the transactions are public means that they can be analyzed to identify people, this is bad not for criminals that will use sophisticated anonymizing techniques. But casual users that don't know any better and maybe identified doing either illegal (buying drugs), compromising (paying for sex) or simply being associated with other known users. In the traditional banking paradigm these problems are usually circumvented by using cash, or relying on the institutions privacy guarantees when no law enforcement is involved. > *Immutable All these schemes while claiming to be immutable are really not, firstly the last block is always subject to being overridden by a longer chain with more blocks, thus everyone waits for multiple blocks(confirmations) before accepting a transaction as committed, secondly even if the development team / or the majority of the miners does not like a specific transaction they can always revert it, by controlling / or being the majority as was the case with the events that lead to the existence of ethereum classic. So these schemes are not really immutable, they are only immutable when a single users tokens are stolen. As for me, I don't believe that cryptocurrencies are completely useless. I just don't see why everyone is so excited.
• bob331 5y ago
  it’s impossible to persuade crypto fantasists because they are in a cult
• ashalhashim 5y ago
  “Let me explain why crypto is bad by showing how it doesn’t fit neatly into the definitions of any of the monetary instruments that preceded it”
  • chromatin 5y ago
    Also although I don't mention it in this article, I am the CTO of a competing fintech firm
• alcio 5y ago
  > Any application that could be done on a blockchain could be better done on a centralized database. Except crime. In a weird way, this quote is a good explanation of why cryptos exist: they give the possibility of creating systems evading state controls. Crime is a relative thing: moving money outside of certain countries is prohibited, in others it's owning property for certain category of people.
  • WanderPanda 5y ago
    The definition of crime is not only a relative thing, but also a moving target which is quite unpredictable and has a lot of long tail events.
• gfodor 5y ago
  For a crypto-skeptic, this is actually a stunning admission: "Any application that could be done on a blockchain could be better done on a centralized database. Except crime." If you acknowledge this, then you acknowledge that crypto has a unique value proposition of being able to shield ones financial transactions. From there, you have to pull in a lot of assumptions that the only time this will be valuable is crime, not to mention what seems to be an assumption that all crime is morally determined to be crime.
  • dqpb 5y ago
    Crime can be as simple as the delta between the desires of those with power and the desire of those without power.
• yashg 5y ago
  When I understood the blockchain and proof of work, my first reaction was - this is nuts. It's a waste of computing power and electricity all for removing a trust provider. And immediately the next realisation was that making a blockchain private and removing proof of work made it pointless. Blockchain is a solution for nothing.
• bitwize 5y ago
  Crypto is libertarianism-as-code: it promises freedom for all, even from the state (or "cathedral" in Moldbugese), but it's really an unworkable scam whose actual effect is to enrich the founders and the investor elite at the expense of everyone else. Oh, and as a side effect, it contributes to destroying the environment while its proponents tell us this is a good thing.
  • floatboth 5y ago
    Don't forget fueling the ransomware explosion.
  • optimalsolver 5y ago
    > Crypto is libertarianism-as-code: It was supposed to be, but that whole code-is-law thing lasted all of five minutes before the first major hack (Ethereum DAO exploit).
• phektus 5y ago
  "Any application that could be done on a blockchain could be better done on a centralized database." The scientific community will disagree with this. The whole culture of independent peer review process assumes there is no centralized control over scientific conclusions, whose rigor stems from decentralized feedback. The time when centralized database (source of truth) became the basis of mainstream science was during the dark ages.
• BoysenberryPi 5y ago
  When it comes to crypto I am completely uninformed. In my uninformed opinion, I think there is probably something of value in crypto and the blockchain but I can't see it under the intense amount of bullshit the crypto community comes up with and I am not willing to dig through that mountain.
  • discordianfish 5y ago
    I felt exactly the same, until I did some research and realized it's bullshit all the way.
  • davidw 5y ago
    I'm in a similar boat. I could see ... something of value coming out of all this, perhaps something unexpected. But I certainly don't want to get involved with all the grifters, scammers, hucksters, confidence men, cryptobros and their various and sundry schemes. Knowing that I don't know much about the details of it... I think of "if you're playing a poker game and you look around the table and and can't tell who the sucker is, it's you" and know that I'd be the sucker, so the winning move is not to play.
    • sweetbitter 5y ago
      As many in the community joke, "don't buy [currency] unless you have a use-case". If your "use-case" includes gambling at the casino and not simple transactions, it is indeed better not to play.
  • sweetbitter 5y ago
    As someone who is interested in this space, you have a proper way of looking at it. Most tokens are just scams outright, or if not scams, have communities which are totally unwilling to solve the technological problems inherent of their coins (see Bitcoin's high fees, limited block size, lack of privacy). One example of a decent currency which runs counter to this trend is privacy-focused Monero, though the developers/community don't bother to market it in the same manner as many other coins, to a point that on of the main criticisms of it is its comparable lack of volatility, amusingly enough. tl;dr There are quite a few innovations that have been made by various actors in the cryptographic currency space, most of which are entirely drowned out by a torrent of mind-numbing get-rich-quick scams and stubborn, close-minded speculators.
• joshmarlow 5y ago
  I think a lot of discussions around the utility of blockchains misses (or just ignores) a really subtle but important point: smart contract networks (like Ethereum) could be thought of like public utilities that are implemented via markets. And I think that perspective can unlock a lot of innovation. If I want to launch a startup, I have to cover hosting costs, manage infrastructure (terraform, AWS/DigitalOcean, Docker, DNS, etc) and handle lots of other complexity that is incidental to what I'm actually trying to build. It really helps to have VC money to ease that pain - but VC money is a dangerous train to get on. But if I can build my app using smart contracts, then they are always available to execute when needed - just pay to write/execute. I don't need to cover hosting costs or much infrastructure beyond some web interface (which I could just put on Netlify). That simplicity reduces the need for funding. Any data or infrastructure that I put in place is - by default - still available if my startup fails, so users who put their content into the system can still get access to it even if I can't afford to pay the bills anymore. And of course, other startups could immediately build on top of whatever I've created. Honestly, using blockchains for money - while essential for some of this - is not the most interesting application.
  • tsimionescu 5y ago
    > But if I can build my app using smart contracts, then they are always available to execute when needed - just pay to write/execute Do you mean that you would build your app so that it entirely runs on the Ethereum network, basically using Ethereum like a cloud provider? This sounds like just a more expensive, difficult, and resource intensive way of running a lambda function...
    • joshmarlow 5y ago
      > This sounds like just a more expensive, difficult, and resource intensive way of running a lambda function... It definitely would be for some applications - but probably not all. It's all about engineering trade-offs. There's a possibility that tools with different trade-offs will make new niches feasible.
  • Igelau 5y ago
    I thought the article did a fairly good job pointing out: - The only applications anyone is implementing on progcoins are exchanges and/or gambling. So far, dApps are a circular argument. - Smart contracts aren't so smart. They are ticking time bombs waiting to get exploited DAO-style. That doesn't leave a whole lot of room for utility.
• JulianMorrison 5y ago
  "self-automated bug bounties" is my new favourite phrase.
• KKKKkkkk1 5y ago
  I'm afraid that the war against crypto was lost once Wall Street decided to join the game. Crypto will not go away regardless of utility or externalities.
  • NoGravitas 5y ago
    Yep. We're getting Economics 2.0, complete with the Vile Offspring and making the earth uninhabitable.
• betwixthewires 5y ago
  They're really hammering away at the narrative these days. Every one of these articles i see reference one another. If this issue is so contentious as they claim every time, why is it that they can only seem to find a handful of people to reference each other? Seems like a group of people that for whatever assortment of reasons (probably their stated ones) don't like cryptocurrency and are crafting and hammering away at a narrative. I don't disagree with a lot of what's said in the article. But there's a lot that is ignored, and a lot that isn't put into context. Yes, this entire system is designed to put financial interaction outside the purview of regulators. This is 100% true. But that's a selling point, at least to those who see it as a positive. That doesn't equate to "crime" though (although it includes crime as a subset) unless you blanked define all financial activity outside the reach of regulation as "crime", which is circular logic.
• krisrm 5y ago
  "every economist worth their weight in salt" Which ones might those be? I think the public's trust in economists has been rightly damaged for a long time.
• bsza 5y ago
  Posting this while the inflation rate of USD is over 6% is kind of tone deaf.
• karaterobot 5y ago
  I feel like I have a pretty good idea of Stephen Diehl's opinions on cryptocurrency markets, after reading a lot of his articles posted on HN. I'll read this one too, if there's a new argument in it. Is this one worth reading for someone who is beginning to find them a little samey?
• moolcool 5y ago
  What about gaming? A huge problem in gaming now is that once games are no longer profitable, the servers go offline and they become unplayable. In-game assets simply disappear, and DRM servers go offline on the whim of the publisher. With the right architecture, crypto could solve both of these problems. Disclaimer: I don't like DRM or microtransactions, I think both of them make the gaming experience in 2021 pretty terrible.
  • rtb 5y ago
    How would crypto force gaming companies to keep servers for old games online?
    • moolcool 5y ago
      Instead of hitting the publisher's endpoints, they'd hit a web3 endpoint to get the list of digital assets owned by the player
      • dvdcxn 5y ago
        What use is that if the servers running the rest of the game are turned off?
        • almostkorean 5y ago
          Most (not all) web3 games don't have a server. Just frontend interacting with a smart contract
          • pcthrowaway 5y ago
            And what do you think you're getting the frontend assets from? They certainly don't live on-chain, and usually aren't open source.
            • moolcool 5y ago
              Distribution of binaries of obsolete games is a solved problem. It costs money to leave dedicated servers running for legacy titles, but costs nothing to leave the Steam page online. Plenty of commercial games are also free to download, but cost money to register and actually play.
• dougSF70 5y ago
  The Oracle problem renders the trust component of the blockchain untrustworthy. The storage expense of using a blockchain (because of the validation required) imposes the requirement of using off chain DB for storage. So you end up with the most economically viable use for Blockchain being the validation of high value digital transactions..e.g Crypto. Perhaps this is why crypto prices will continue to rise, since the validation component requires energy ($) to function and the more transactions that take place, the more validation is required - I believe it does not scale linearly even though it happens in parallel. Since validation fees are paid in crypto, crypto prices must rise as more validation takes place. It is sort of circular. I could be 100% wrong though.
• sharemywin 5y ago
  So, let's all use facebook ... no that wouldn't work they sell off our data...google...apple...the government(bailouts anyone)... as hard as I try I can't seem time find a central authority that's earn my trust.. do I use them now sure. and if all I need it is for a couple of crypto coins to hold value long enough to buy crap until my next pay check then I could see it being stable enough for that. file coin seems like a pretty cool protocol. prediction markets seem like a cool way to keep truth manageable. and if 10-40 people run a publicly verifiable block chain and they have a stake if it works then I don't see how small groups or towns couldn't run a local blockchain and it's compatible with a bunch of other ones thru defi. To me the whole point of blockchain and Defi is that the network doesn't scale but does it really need to.
  • sharemywin 5y ago
    and as for NFT. I imagine watermarking will be added and apple made billions selling music for 99cents when pirating was at an all time high. Most people want to see creators create and get paid. In the long run its going to be about network transaction fees going to near 0. so as long as distributed means fair competition baked into the networks, crypto will thrive maybe not as an investment but as a way to handle micro payments and funding creators
• tigereyeTO 5y ago
  The author of this article makes specious claims that can each be refuted. >Any application that could be done on a blockchain could be better done on a centralized database. Except crime. That's simply not true. First he doesn't define "better" which is incredibly important when making such a claim. I would agree that centralized databases can do things "more quickly" and "with less overhead" but you'd lose the most important quality of what make cryptocurrencies important: "without permission, consent, or control of anyone else." Centralized systems can make changes to your data without your knowledge or consent. They can freeze/edit/delete your records without your say. Decentralized systems that use blockchains are immune to this, and for people who prioritize privacy or use of a system without consent from some over-arching 3rd party, they would definitely say blockchain-based systems are "better" >crypto assets have no claim to be currencies because their deflationary properties and volatility don’t fulfill the theoretical or even practical function of money This is untrue. There are government-issued currencies that are far more volatile than cryptocurrencies are. There are 3 functions of money: store of value, unit of account, and medium of exchange. Cryptocurrencies like Bitcoin fulfill all 3. >They aren’t commodities because they have no non-circular economic use case. Again untrue. ENS and Handshake allow registration of domains without a centralized DNS registrar. Helium tokens allow access to a global decentralized sensor/relay network without relying on centralized telecoms. ETH and AKT allow you to code and deploy a program that does not rely on any centralized servers in two different formats. Sentinel (DVPN) lets you pay for and access a decentralized VPN without relying on a centralized party. Each of these projects - and many many others - have economic use cases that are not circular. The author has twisted facts to conform to his own predetermined reality.
  • user-the-name 5y ago
    > There are 3 functions of money: store of value, unit of account, and medium of exchange. Cryptocurrencies like Bitcoin fulfill all 3. Bitcoin fails miserably at all three. Come on. Bitcoin can do a measly three transactions per second for exorbitant fees, it is massively unstable and unsuitable as a store of value.
  • whatever1 5y ago
    Crypto can be forked without my consent too.
• chishaku 5y ago
  > It’s a scary but essential truth to realise that normal software engineers like us are an integral part of society’s immune system against the enormous moral hazard of technology-hyped asset bubbles metastasizing into systemic risk. Myopic and uninformed. Pretend crypto doesn't exist and you still have a market rife with moral hazard and technology-hyped asset bubbles that metastasize into systemic risk to the point of bringing down the real economy in increasingly shorter crash cycles. Is crypto a cause or a symptom?
• llimos 5y ago
  Most people on HN are rational people who look at the world in a rational way. Bitcoin and friends are not operating in a rational market, therefore we don't understand them, and most of us would probably be pretty lousy investors since we would try to make decisions rationally instead of memeing and YOLOing. But, and this is a key point, that doesn't make us right and them wrong. It's just a different kind of market, one that I am not very good at, but it is for sure possible to make money in it. You just need to be a different kind of person. We can say our way is "better", but who are we to decide that?
  • PantaloonFlames 5y ago
    The issue is not whether a person can make money in a Ponzi scheme. We know it is possible. The issue is, is it a good idea?
    • koonsolo 5y ago
      Buying low and selling high is not a ponzi scheme.
      • mypalmike 5y ago
        The losers in a Ponzi scheme buy high and sell low. What did the winners do?
        • koonsolo 5y ago
          So real-estate, stocks and gold are all ponzi schemes?
          • Jensson 5y ago
            All of those have value even if you wouldn't be allowed to sell them. Stocks pay dividends, people use gold as jewellery, and you can live in real estate. Speculating on assets with real world value is different from speculating on assets nobody would care about unless they could sell it. The whole point of these scams is to convince people to buy assets that nobody wants, but you convince them that some other guy really wants it a lot and will pay more for it in the future. And of course if he could convince some new guy of the same thing he can even sell it at a profit, but since there ultimately is nobody who wants this asset the chain has to break sooner or later.
• deleted 5y ago
  [deleted]
• gbolcer 5y ago
  Putting aside cryptoeconomics for a second, a centralized database can be manipulated in a criminal activity. A decentralized, omni-inspected one with no clear owner and no ability to take an axe to it provides a cryptographically sound public ledger (unless it's a private blockchain of course). It'd be very difficult to--independent of the activities that the technology is being used for now--criminally tamper with the history. I think you have to split it into conceptual layers. Decentralization at the lower layer has value independently of how it's used.
  • Jerrrry 5y ago
    >Any application that could be done on a blockchain could be better done on a centralized database. Except crime.
• agentultra 5y ago
  I work in fintech and I don't see how a run on Tether will result in everyone getting their money back. The people financing it are hidden behind shell corps in shady countries with loose reporting and have not been playing ball with regulators. It's not reasonable to believe they have the reserves. The systems of payments we have today are social systems. They're built on a system of obligations, credits, debits, and liabilities. The technology used to facilitate modern systems is merely a reflection of that system. The entire reason for the crypto ecosystem to exist is to have a financial system free of that regulation and governance.
  • Zamicol 5y ago
    Tether is rat poison, and from the very beginning most voices in the cryptocurrency community have refused to call it a "cryptocurrency". It's a private token controlled by a private ledger. I know no one in the space that has a favorable view of Tether. USDC is regulated and sane centralized alternative. Dai is a sane distributed alternative.
• notpachet 5y ago
  > There is a somewhat coherent proposition that crypto assets are effectively unregistered securities contracts, basically like stock in an empty company that doesn’t do anything except promote the sale of its own stock. I sometimes think that when anthropologists from the future look back at today, the primary lessons they'll draw from us won't have to do with our technological cleverness, but rather our financial imagination. Greed is at work in the world, and it is a strong force of propulsion in terms of how the world we are living in is changing. Perhaps dramatically more so than technology, in a given period of time. The willingness to speculate in a manner that is completely unhinged from reality: that is the dark heart of cryptocurrencies. It is rent-seeking behavior taken to its brutally logical conclusion. And it is not unique to crypto. Look at people's behavior in the stock market, or the housing market. It isn't that these assets are actually appreciating that much in the real world, so much as investors are simply trying to find a place to put their money and get a return. In that sense, the speculative utility that <meme stonks/Vancouver condos/cryptocoins> provide, as a store of financial value, has become orthogonal to reality. In some markets, I'd argue that we're even seeing a weird parasitic effect, where the host is kept alive simply to serve as a form of blue sky contract by the force of our collective willingness to play Russian Roulette speculative games with each other. GameStop is a good example.
• elif 5y ago
  The author completely omits any mention of immutability or value storage, instead choosing to characterize crypto as an overengineered scam platform. Really dubious analysis imo.
• exdsq 5y ago
  This guy always writes such negative posts about crypto while working on his own centralized digital treasury settlement system https://github.com/adjoint-io https://github.com/adjoint-io - the exact thing crypto threatens.
• Zamicol 5y ago
  The cryptocurrency world is full of endless, technical publications. Yet what gets posted on Hackernews and upvoted are low quality political panderings from a cryptocurrency competitor. Compare this post with something from Ethereum: https://vitalik.ca/general/2021/06/18/verkle.html https://vitalik.ca/general/2021/06/18/verkle.html
• colinrand 5y ago
  I appreciate the authors sentiments but I missed perhaps the most important one to me. Crypto has really re-invigorated interest in DIY/Tinkerer/random projects with no real purpose. These may appear pointless externally, but internally to the ones working on them they are incredibly fun, educational, and sure, potentially profitable. When industry / tech is in this chaotic phase, often the major benefit is figuring out what doesn't work, what fails, etc. If things were easy, everyone would do it, but when it's hard to get right, amazing innovation can happen along the way. Don't discount the random meandering towards solutions.
• outside1234 5y ago
  http://shouldiuseablockchain.com/ http://shouldiuseablockchain.com/ is my go-to reference personally.
• keyme 5y ago
  What an obnoxious piece of drivel. "Any application that could be done on a blockchain could be better done on a centralized database. Except crime." The HN California tech-bros could be forgiven for not "getting it" 2 years ago. However, when leaving your own damn house became a crime, this lack of understanding is beginning to become infuriating. The value proposition of cryptocurrencies is not only in shielding you from the whims of bureaucrats that are in charge of monetary policies, but of idiotic changes to all policies. When my country was in a full insane-mode covid lockdown, no centralized database helped me to get a haircut. That haircut guy took only cash or crypto. When the next insane demand is inevitably decreed upon you, maybe cash won't do anymore either.
• cwkoss 5y ago
  This is the second time this week I've seen an article from Diehl on the front page that is critical of cryptocurrency but has next to zero substance. Weird that people regard him as a crypto expert, he doesn't seem to understand the space very well. - Comparing Bitcoin to doge and shiba is laughable - Re progcoins, he says "After twelve years of these technologies existing" - Ethereum is only 6 years old... - Like most other crypto skeptics, this author doesn't understand the value of decentralized value transfer, so his analysis entirely misses the pro's of these technologies. It's like someone trying to understand why candy is popular by only looking at the nutritional information - never tasting it. I'd bet 1000 SHIBA that one of Diehl's friends tried to convince him to buy in years ago, and now the cognitive dissonance of that rejection costing him hundreds of thousands of dollars in potential gains is forcing him to double down: his ego cannot tolerate crypto success - or else he'd have to admit to himself he was naive and short sided by discounting it years ago. The majority of coins will eventually fail, and it's even possible all the currently popular ones will be included in that. The road to maturity has been and will continue to be bumpy. But the writing is on the wall that crypto is going to be a major force in global finance for decades to come. Pandora's box is open, anyone who thinks it will entirely flame out and disappear doesn't understand what has happened over the past decade.
  • medo-bear 5y ago
    >this author doesn't understand the value of decentralized value transfer, so his analysis entirely misses the pro's of these technologies came here to say the same thing, with one addition: unregulated decentralized transfer the author seems to brush this off as only appealing to criminals
  • isoprophlex 5y ago
    The thinly veiled ad hominem stuff against Diehl is uncalled for.
  • louwrentius 5y ago
    > This is the second time this week I've seen an article from Diehl on the front page that is critical of cryptocurrency but has next to zero substance. Weird that people regard him as a crypto expert, he doesn't seem to understand the space very well. What is stated without evidence can be dismissed without evidence. These unfounded personal attacks is not what HW was about, I remember. > Comparing Bitcoin to doge and shiba is laughable such insight! > - Re progcoins, he says "After twelve years of these technologies existing" - Ethereum is only 6 years old... Damn, you got him! By reading the text as literally as possible... I'm impressed! > - Like most other crypto skeptics, this author doesn't understand the value of decentralized value transfer, so his analysis entirely misses the pro's of these technologies. It's like someone trying to understand why candy is popular by only looking at the nutritional information - never tasting it. Didn't you get the memo of his article(s) that crypto is anything but decentralised? The good thing is that you yourself didn't proclaim to be a crypto expert. Fair enough! > I'd bet 1000 SHIBA that one of Diehl's friends tried to convince him to buy in years ago, and now the cognitive dissonance of that rejection costing him hundreds of thousands of dollars in potential gains is forcing him to double down: his ego cannot tolerate crypto success - or else he'd have to admit to himself he was naive and short sided by discounting it years ago. Is this just psychological projection? Is that really all you have to offer?
• pennaMan 5y ago
  Crypto is all about decentralized proof of trust yet somehow this eludes people who should know better. Please show me how you solve decentralized proof of trust (double spend) with postgres. Indeed, crime did have a need for anonymous proof of trust that crypto solved. Why did crime have a need for that? Because crime lies beyond the realm of the status quo. Criminals are to the status quo as pioneers and revolutionaries are. In the "normal world", centralization gives us the situation where the organization in charge of authentication is the same organization that has the monopoly on violence. Indeed within the rules of this story we built crypto seems to be "a solution looking for a problem", as another stereotype argument goes. The problem is all around you.
  • nice_byte 5y ago
    you mean what payment systems and any online game with in-game currency have solved?
    • pennaMan 5y ago
      >payment systems You mean monopolisitc central payment systems like visa and mastercard that can push to deny service to a legal business like onlyfans on random religious grounds? >any online game Last time I checked the economy of world of warcraft was owned and controlled by Activison-Blizzard, including rights to all in-game currencies, so I don't even know what this argument is supposed to mean.
  • verdverm 5y ago
    It's understood, but not desirable. Proof of Authority is preferable. Double spend is somewhat separate from proof of trust one you change the consensus algo and make it a permissioned system.
• Animats 5y ago
  What's so striking about all this is the sheer scale. There have been bubbles before, but not trillion dollar ones based on nothing. It's not just Bitcoin and friends. Rivian, which is just starting out as an electric light truck manufacturer, has a market cap of US$98 billion. First vehicles will ship no sooner than January 2022. This is more market cap than Ford Motor, the #1 seller of light trucks for the last 44 years and with a good electric truck in their lineup. This can't end well.
  • cyphertruck 5y ago
    Bitcoin isn’t in a bubble on any time scale longer than 4 years. Bubbles don’t re-inflate.
  • 1970-01-01 5y ago
    Rivan began truck delivery months ago. Lordstown has a suitcase full of cash and a direct flight to Maldives coming up.
    • Animats 5y ago
      "The first R1T rolled off the assembly line in Normal, Illinois on September 14, which means that over about 48 days, the company was producing the R1T at an average rate of nearly 3.8/day (including weekends). ... Nearly all of these vehicles were delivered to Rivian employees."[1] That's not production. That's debugging the assembly line. [1] https://insideevs.com/news/544860/rivian-r1t-production-delivery-october2021/ https://insideevs.com/news/544860/rivian-r1t-production-deli...
• cyphertruck 5y ago
  The irony is that this article is correct for “crypto” but not Bitcoin. Every “crypto” could be better done with a database. But Bitcoin allows journalists like Wikileaks to be paid without it being censored. You can call that “crime”, but your definition of crime doesn’t comport with natural law. And censorship resistant money breaks the stranglehold of theft via inflation from the central banks. It eliminates the primary cause if generational poverty. I know this site is inhabited by government worshipping authoritarians, but bitcoin will fix that too, eventually.
• praveen9920 5y ago
  I agree with the author but in the world of startup.. people come to your product/solution only if there is some issue with existing system. With crypto coins, a need is established. Even though I agree that current crypto coins have no clear value, there is some aspect of it which people want but was probably not done right or sometimes illegal Imagine being in 90s and everyone doing some silly websites and saying it is future. Then came the giants which actually solved the problem for the masses
• timdaub 5y ago
  > Smart contracts are, in database terminology, stored procedures that run one of the various incarnations of distributed databases these technologies are built on. This is a classic misrepresentation of the properties of a smart contract. It's nothing like a procedure and the environment that its executed is different. A database procedure can be deployed, run and deleted by anyone being a database admin. Anyone else cannot even see the procedures. A procedure can be edited mid-lifecycle too. E.g. we cannot see DB procedures of FB, neither can we interact with them. A database has mutable state. And every data base makes trust assumptions about the nodes and their operators. You wouldn't invite a malicious actor to run a node in your regular DB cluster. Anyone can host a blockchain node but not all state can be arbitrarily edited. That may require "work" as in "Proof of Work". A smart contract can be published by anyone, be run by anyone and it cannot be updated. And it's internal state can be read after any transaction. DB procedures have no internal state that's persisted. They are functional and pure. They update the DB records. Smart contracts and DB procedures are very different.
• dominiek 5y ago
  "Any application that could be done on a blockchain could be better done on a centralized database. Except crime." What if the actual crime is committed by those that control our money... Saifedean Ammous' book "The Bitcoin Standard" gives an excellent history of hard money and shows that any new form of hard money will inevitably replace the lesser form (e.g. from the silver standard to the gold standard). Crypto is composed of interesting projects and scams. Gambling and speculations are symptoms of a wider problem of debased currency and a lack of hard money. Bitcoin fixes this... Talking about Bitcoin in the same vain as Crypto shows a profound lack of understanding of history both past and recent when looking at Bitcoin. While people trade their little Pokemon NFTs Bitcoin will be doing what Bitcoin has been doing from the beginning: Staying exactly 21 million bitcoin - the scarcest and most accessible form of hard money the world has ever seen. It's a black hole sucking in monetary inflation. 1 Bitcoin = 1 Bitcoin.
• easrng 5y ago
  > Any application that could be done on a blockchain could be better done on a centralized database. Except crime. Actually, you can have private digital currency without a blockchain that would be perfectly usable for crime. You'd need a server coordinating a scheme like that of https://www.chaum.com/publications/Chaum-blind-signatures.PDF https://www.chaum.com/publications/Chaum-blind-signatures.PD..., preferably accessed through Tor for additional privacy.
• EVa5I7bHFq9mnYK 5y ago
  That's a lot of smart words, but I just paid $7 in bitcoin to top up my Egyptian sim card (wi fi in the hotels is not existent over there, so you must use mobile internet), using bitrefill and lightning. It took a few seconds to complete, I paid zero fees, I didnt have to divulge any information about myself nor to the vendor, nor to any bank or goverment. No registration, no validation, nothing. Vendor did not have to worry about my transaction being fraudulent or that it might be charged back for any reason. As to the volatility, I topped up my payment wallet with $100 some time ago, used it to pay for many things, and now it shows a balance equivalent of $800. I welcome such volatility. To me, this clearly shows the superiority of this form of money over previous forms.
• smitty1e 5y ago
  > I’m not alone in believing in the fundamental technical uselessness of blockchains. Hmmm. Codd delivered "A Relational Model of Data for Large Shared Data Banks" in 1970, and it took something like a decade (waves hands) for RDBMS systems to appear. Packet-switched networks, anyone? So it seems perhaps hasty to write off the blockchain entirely, though currently the idea seems to need a saner catalyst than these various coins to bring it to fruition.
• btbuildem 5y ago
  > Any application that could be done on a blockchain could be better done on a centralized database. Except crime. The opening quote in the article captures it all for me, except the last part. The implied definition of crime is so narrow. From what I know of the financial markets in the US, mortgages and other loans as well as more esoteric financial instruments -- it's all moving in the direction of Ponzi schemes and get-rich-quick scams. I'd go as far as saying that it is all in fact a big organized crime circuit, if you're just a little flexible in the definition of crime (mostly in the part where crime usually has consequences, but the really big crooks have found a reliable way to "socialize" the consequences of them getting theirs). In that light, having a public, transparent ledger of all the "important" transactions at the top levels could help reduce the amount of routine white-collar crime that goes on. Perhaps it is not explicitly criminal in nature - or it is, but the offenders have far too many resources to be held accountable -- but all the same it's harmful to society at large. An idealist can dream of a system where these actors can be scrutinized, and named-and-shamed into some kind of socially responsible behaviour.
• worik 5y ago
  I loved this article. I am almost in complete agreement. Reading the comments here is very worrying. So little understanding of simple economic ideas, like what a Ponzi scheme is. Truly amazed that people think that Bitcoin is comparable to gold. I am not a fan of gold as an investment, they have that in common. But nothing else. It is a tragedy that so much energy is used, in times like these, for something so useless. 128 TWh in a year. https://www.sciencealert.com/bitcoin-could-soon-consume-0-6-percent-of-world-s-electricity-here-s-how-it-works https://www.sciencealert.com/bitcoin-could-soon-consume-0-6-...
• sershe 5y ago
  > Any application that could be done on a blockchain could be better done on a centralized database. Except crime. "Crime" is a word with bad connotations, but what it actually means is "whatever your government doesn't allow you to do". Being able to do something that a government doesn't want you to do isn't prima facie wrong or immoral in most of the world. Even under more benign governments like the US one, there are plenty of normal activities that it doesn't allow for various bad reasons (war on drugs is a good example). Technically, bypassing the restrictions on drugs, avoiding capital controls or straight up confiscation of deposits, opting out of local currency devaluation, etc. can be "crime". However, it is actually good that crypto makes that possible. Is crypto a good tool for that, long term, from a technological standpoint? I am not sure. But the author is clearly sneaking in connotations here.
• mvkel 5y ago
  I think this fundamentally ignores what’s guaranteed to happen in the future: corporate ownership of… everything. The only thing we own these days is our identity. That said, our digital identities are largely owned by user data companies like VISA, Google, et al. If applications can run on the blockchain, and users have the ability to immediately and irrevocably “nuke” the personal information stored on the block chain, that massively improves on the centralized database model.
  • mclightning 5y ago
    I'm very much deep in crypto, "have skin in the game" big time. But are you being honest there? A majority of coins are owned by corporations. Some coins already have governance through staked amount of coins. ETH2.0 and PoS will centralize the power to the majority holders of ETHs. When that happens, corporate/"whale" investors will decide the future implementations. Either through governance voting, or just by basically clogging the execution & blockchain through a strike.