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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

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.
  - __alexs 5y ago
    > But it isn't on a block chain and it isn't extensible. It is very extensible. My bank has an API. > With our current digital cash I can not create NFTs and trade then around. I'd call that a feature rather than a bug. I am absolutely able to buy and sell items traceably with other people though. For example I recently bought a house. The transfer was facilitated by my solicitor and recorded in a central government registry. > It also doesn't allow for arbitrarily large transfers. Transactions of many millions of dollars are routinely made using existing digital banking technology. My personal account has a 10k/day cap due to money laundering rules but that seems fairly sensible. I can call them up and have it raised for one offs.
  - yashg 5y ago
    Why does digital cash need to be on a blockchain?
- koonsolo 5y ago
  That is impossible: the numbers on your bankaccount are multiplied, thanks to fractional reserve. The cash in your hand is not. Maybe not a big deal now, but at some point it might be. And then it's "surprise! The numbers on your account != cash in your hand"
  - __alexs 5y ago
    How do I put bitcoins in my hand? Sounds painful.
    - koonsolo 5y ago
      You can put them in your head. Painful when you try it with cash or coins :D
  - bhouston 5y ago
    But we have insurance on deposits in the US/Canada. Also DAO are trying to replicate fraction reserve lending. So basically we have protections against this problem in the traditional system and the crypto system is trying to replicate fractional reserves. Tether also is engaging in massive fractional reserve lending. Apparently only 3% of Tethers are backed by cash holdings: https://news.ycombinator.com/item?id=27151370 https://news.ycombinator.com/item?id=27151370
    - koonsolo 5y ago
      > the crypto system is trying to replicate fractional reserves. That is not a fair statement and you know it. Only a fraction of cryptos maybe. Most do not.
grlass 5y ago
Most of these systems are designed around pseudonymity, not anonymity. Only things like Zcash, and Monero set out with that explicit goal. I suppose much like with BitTorrent, the criminal needs will be both good and bad; allows routing around unjust laws (of which there are many), as well as routing around just laws (of which there are many).
- bhouston 5y ago
  > Most of these systems are designed around pseudonymity, not anonymity. Only things like Zcash, and Monero set out with that explicit goal. I agree. There are regular +100M bitcoin transfers happening between pseudonymity accounts, which could easily be money laundering / tax avoidance by billionaires: https://twitter.com/whale_alert https://twitter.com/whale_alert I think in the fully legal system, all accounts would likely be tied to real identities.
AnIdiotOnTheNet 5y ago
Bittorrent and Napster took advantage of post-scarcity space created by the information age and made distribution of non-scarce resources easier. NFTs, at best, do the opposite by intentionally trying to force scarcity back into a post-scarcity system. For this reason, I do not believe they have value or much of a future.
moolcool 5y ago
> am reminded of the P2P/decentralized nature of Napster and how it was going to be a revolution Torrents still account for a massive share of internet traffic. Furthermore, I think it's reductive to just consider it a tool for piracy. Blizzard uses (used?) BitTorrent in their game launcher to alleviate server costs. Not to mention that a lot of bittorrent traffic lives in the fuzzy area of sharing lost media and abandonware. Gabe Newell famously referred to piracy as a service problem, and the success of services like Spotify, Steam and Netflix undoubtedly prove that to some extent. Like yes, the easiest way to dive into the Disney back catalog is through Disney+, but there's also Disney content which, for various reasons, you can't access through the service but still has historical value.
- TheProbes 5y ago
  I think that the main problem with this logic is that Bittorrent is a tech designed to illegally distribute a consumer good, ie a movie. Once the movie has made it's final stop, your eyeballs, that's it. It's been consumed. Cryptocurrency only has value if you can sell it on to someone else, and it's value is entirely dependent on what value you think you will be able to sell it for. Once the number starts to go down as fiat on/off ramps start to get squeezed, it will be come much much less attractive to everyone, including, and maybe especially, to criminals. It only have value to them currently because they can store value in it and exchange it for fiat with non-criminals. If it becomes criminalized everywhere, and their only option is exchanging it with other criminals......well. It's not the same as Bittorrent is it?
TheProbes 5y ago
I think that the main problem with this logic is that Bittorrent is a tech designed to illegally distribute a consumer good, ie a movie. Once the movie has made it's final stop, your eyeballs, that's it. It's been consumed. Cryptocurrency only has value if you can sell it on to someone else, and it's value is entirely dependent on what value you think you will be able to sell it for. Once the number starts to go down as fiat on/off ramps start to get squeezed, it will be come much much less attractive to everyone, including, and maybe especially, to criminals. It only have value to them currently because they can store value in it and exchange it for fiat with non-criminals. If it becomes criminalized everywhere, and their only option is exchanging it with other criminals......well. It's not the same as Bittorrent is it?

__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.
- __alexs 5y ago
  > But it isn't on a block chain and it isn't extensible. It is very extensible. My bank has an API. > With our current digital cash I can not create NFTs and trade then around. I'd call that a feature rather than a bug. I am absolutely able to buy and sell items traceably with other people though. For example I recently bought a house. The transfer was facilitated by my solicitor and recorded in a central government registry. > It also doesn't allow for arbitrarily large transfers. Transactions of many millions of dollars are routinely made using existing digital banking technology. My personal account has a 10k/day cap due to money laundering rules but that seems fairly sensible. I can call them up and have it raised for one offs.
- yashg 5y ago
  Why does digital cash need to be on a blockchain?
koonsolo 5y ago
That is impossible: the numbers on your bankaccount are multiplied, thanks to fractional reserve. The cash in your hand is not. Maybe not a big deal now, but at some point it might be. And then it's "surprise! The numbers on your account != cash in your hand"
- __alexs 5y ago
  How do I put bitcoins in my hand? Sounds painful.
  - koonsolo 5y ago
    You can put them in your head. Painful when you try it with cash or coins :D
- bhouston 5y ago
  But we have insurance on deposits in the US/Canada. Also DAO are trying to replicate fraction reserve lending. So basically we have protections against this problem in the traditional system and the crypto system is trying to replicate fractional reserves. Tether also is engaging in massive fractional reserve lending. Apparently only 3% of Tethers are backed by cash holdings: https://news.ycombinator.com/item?id=27151370 https://news.ycombinator.com/item?id=27151370
  - koonsolo 5y ago
    > the crypto system is trying to replicate fractional reserves. That is not a fair statement and you know it. Only a fraction of cryptos maybe. Most do not.

grlass 5y ago

Most of these systems are designed around pseudonymity, not anonymity. Only things like Zcash, and Monero set out with that explicit goal. I suppose much like with BitTorrent, the criminal needs will be both good and bad; allows routing around unjust laws (of which there are many), as well as routing around just laws (of which there are many).

bhouston 5y ago
> Most of these systems are designed around pseudonymity, not anonymity. Only things like Zcash, and Monero set out with that explicit goal. I agree. There are regular +100M bitcoin transfers happening between pseudonymity accounts, which could easily be money laundering / tax avoidance by billionaires: https://twitter.com/whale_alert https://twitter.com/whale_alert I think in the fully legal system, all accounts would likely be tied to real identities.

AnIdiotOnTheNet 5y ago

Bittorrent and Napster took advantage of post-scarcity space created by the information age and made distribution of non-scarce resources easier. NFTs, at best, do the opposite by intentionally trying to force scarcity back into a post-scarcity system. For this reason, I do not believe they have value or much of a future.

moolcool 5y ago

> am reminded of the P2P/decentralized nature of Napster and how it was going to be a revolution Torrents still account for a massive share of internet traffic. Furthermore, I think it's reductive to just consider it a tool for piracy. Blizzard uses (used?) BitTorrent in their game launcher to alleviate server costs. Not to mention that a lot of bittorrent traffic lives in the fuzzy area of sharing lost media and abandonware. Gabe Newell famously referred to piracy as a service problem, and the success of services like Spotify, Steam and Netflix undoubtedly prove that to some extent. Like yes, the easiest way to dive into the Disney back catalog is through Disney+, but there's also Disney content which, for various reasons, you can't access through the service but still has historical value.

TheProbes 5y ago
I think that the main problem with this logic is that Bittorrent is a tech designed to illegally distribute a consumer good, ie a movie. Once the movie has made it's final stop, your eyeballs, that's it. It's been consumed. Cryptocurrency only has value if you can sell it on to someone else, and it's value is entirely dependent on what value you think you will be able to sell it for. Once the number starts to go down as fiat on/off ramps start to get squeezed, it will be come much much less attractive to everyone, including, and maybe especially, to criminals. It only have value to them currently because they can store value in it and exchange it for fiat with non-criminals. If it becomes criminalized everywhere, and their only option is exchanging it with other criminals......well. It's not the same as Bittorrent is it?

TheProbes 5y ago

I think that the main problem with this logic is that Bittorrent is a tech designed to illegally distribute a consumer good, ie a movie. Once the movie has made it's final stop, your eyeballs, that's it. It's been consumed. Cryptocurrency only has value if you can sell it on to someone else, and it's value is entirely dependent on what value you think you will be able to sell it for. Once the number starts to go down as fiat on/off ramps start to get squeezed, it will be come much much less attractive to everyone, including, and maybe especially, to criminals. It only have value to them currently because they can store value in it and exchange it for fiat with non-criminals. If it becomes criminalized everywhere, and their only option is exchanging it with other criminals......well. It's not the same as Bittorrent is it?