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The problem with web3 is not that it's centralized -- that's irrelevant. The fundamental problem with all crypto"currencies" is as follows: the world uses real

by chx 5y ago

The problem with web3 is not that it's centralized -- that's irrelevant. The fundamental problem with all crypto"currencies" is as follows: the world uses real currencies and there is only one way this enters into the world of crypto"currencies": by someone selling a coin to someone else. Thus, regardless of what crypto"currency" we are talking about, it would be a zero sum game if not for transaction fees. However, with transaction fees it becomes a scam because there's a set of players who are guaranteed to win and there's another set of players who, en masse, are guaranteed to lose. It utterly doesn't matter what you do with your crypto"currency", this is the underpinning scam of it. And once you entered the game, the only way for you to not lose money is to find a greater fool who will take over your crypto"currency", everyone who owns some becomes a proponent of it. It's an ingenious scam. And no, nothing in the real world is like this. In the real world, the amount of currency increases when a bank extends a loan which then creates more value by such things as being using as capital, allowing you to enjoy a home now instead of decades later and so forth. Also, stocks are not a zero sum game -- companies actually create value and so forth.

btdmaster 5y ago
Though I generally agree with the sentiment, there is one significant use case -- transferring money across country borders. Currently, transaction fees on cash transactions are much much higher than they are on cryptocurrencies (maybe except bitcoin) and so this would mean that, in theory, they could be used as a way to transfer goods across country borders.
- chx 5y ago
  This doesn't change the scam nature of the underpinning mechanism. As I said: it doesn't matter what you do with your coin.
  - pibechorro 5y ago
- thesuperbigfrog 5y ago
  >> there is one significant use case -- transferring money across country borders. Currently, transaction fees on cash transactions are much much higher than they are on cryptocurrencies Ideal for malware ransom payments.
  - xmprt 5y ago
    If you think malware ransom payments are the primary use case for transferring money across borders then you should get out of your bubble and make friends with people originating from other countries or with family back in those countries.
- matt_holden 5y ago
  Is this true though? I can send $1000 USD to someone in France who wants EUR for $7 with Western Union. How does Bitcoin or Ethereum let me do this for less?
- chipotle_coyote 5y ago
  This has always struck me as…I don't think a "weak" use-case is the terminology I'm looking for, but maybe "fragile"? What I'm trying to get at is that I'm not sure that the existing non-crypto money transfer services have to charge as much as they do to be profitable. If cryptocurrency-based transfers get popular enough that they're perceived as a threat, then I suspect Western Union and friends -- or perhaps new entrants to the market -- will introduce "new products" that are more competitively priced.
127 5y ago
>And once you entered the game, the only way for you to not lose money is to find a greater fool who will take over your crypto"currency", everyone who owns some becomes a proponent of it. It's an ingenious scam. Yes, that's the current pension system.
- chx 5y ago
  It is not. There are many significant differences: 1. There's no set of players who are guaranteed to win 2. There's no set of players who are guaranteed to lose 3. No one is set to gain by advocating for the "current pension system".
  - lukeramsden 5y ago
    > 1. There's no set of players who are guaranteed to win Pension fund managers are guaranteed to win, and they win more as life expectancy goes down. > 2. There's no set of players who are guaranteed to lose Literally everybody else loses, as inflation eats away at the buying power of older peoples' ongoing or soon-to-start pension payments, and young people pay in to a system that there is now no guarantee they will earn from in 40 years time. > 3. No one is set to gain by advocating for the "current pension system". Plenty of people stand to gain, see above, as well as politicians interested in protecting the status quo and electability above all else.
    - chx 5y ago
      You have a political axle to grind, fine, but that's not relevant to the discussion here. Maybe the current US pension is set up like this, maybe not, that's debatable perhaps. But it's not an inherent feature of the systems everywhere unlike the problem with crypto"currencies".
- paulryanrogers 5y ago
  > Yes, that's the current pension system. If benefits-defined pensions are any indicator then both are unsustainable, and certainly not the future.
5560675260 5y ago
Can't you exchange goods and services for crypto, without using fiat? Transaction fees are obviously unfortunate, but there is just no going around the need for infrastructure. And where is an infrastructure - there are maintenance fees, crypto isn't unique in this regard.
- acdha 5y ago
  It’s not “without using fiat”: cryptocurrencies are pure fiat currencies but with very weak backing — people need sovereign currencies to pay taxes, pay or get paid for government functions, and participate in large preexisting economies. Nobody has to use cryptocurrency for those reasons and the variable, usually high, fees discourage use — especially in the case of Bitcoin where the economic model incentivizes hoarding. Speculators can generate a lot of noise but it also creates a toxic atmosphere where anyone spending feels like they’re the sucker for not holding it instead. That’s how after a decade there are a tiny number of non-Bitcoin businesses which would notice if Bitcoin disappeared tomorrow.
  - chx 5y ago
    > cryptocurrencies are pure fiat currencies I thought even Bitcoin maximalists have given up on this nonsense by now? Fiat money is legal tender backed by the taxation power of a nation state and ultimately, the monopoly on violence. This is why I always write crypto"currency" -- even naming so, crypto shills have pulled an ingenious move pretending their scam is a currency which it utterly is not.
    - acdha 5y ago
      The standard definition of a fiat currency is that it’s not backed by some kind of asset and thus has only the value given by social convention. The most widespread examples are backed by sovereign states and thus have the weight you describe but there have been private ones as well. This is why I described it as a very weak one because it doesn’t even have the commitment of a bank behind it and the extremely highly operating costs means there’s a real long-term risk of not being able to find a buyer.
delaaxe 5y ago
Nobody thinks of crypto in terms of currencies anymore. They’re the same old running on different infrastructure: assets, shares of ownership in a business/protocol, certificate of ownership of a digital item, and yes occasionally, currencies
- chx 5y ago
  Doesn't matter. It doesn't change the fundamental scam nature of the game. You are describing game rules, it's typical of people in the game -- but it's participating in the game which makes people lose money. It utterly does not matter what happens inside the walled garden of crypto"currencies".
- curryslapper 5y ago
  Gotta be careful with that one. Crypto typically doesn't have any equity ownership at all. At best it's a revenue stream.
StingyJelly 5y ago
Web3 is a buzzword that makes it sound like something which it isn't, same with AI - dumb but pattern recognition is still useful. I wouldn't call trustless programmable money with defined supply irrelevant since there is no alternative in the mainstream financial system. You are talking about just one function - transfer of value - but that already works just fine. For your points: You can have much lower transaction fees than in Visa / Mastercard (which sometimes you can't even legally charge customer with) so there's a bigger scam by your definition. One has to find someone willing to trade to get goods -_- because dollars instantly turn into chicken soup when you're hungry. For fractional banking you need a trusted system, this is outside of cryptocurrency scope but you can do it atop of cryptocurrecnies just fine, look at exchanges.
- chx 5y ago
  > You are talking about just one function - transfer of value I do not. I am talking of the only way money enters this system. If there would be no money in the system no one would care. At the end of the day, in this time and place, our society decided money is the ultimate goal. I don't like it but it's what it is. > You can have much lower transaction fees than in Visa / Mastercard First of all: it's nonsensical to compare money to ... money? the problem with crypto"currency" is that it's not money and it's crossing that barrier which makes players lose money. Second, it's not inherent to the money system to use Visa / Mastercard. You can use other ways to transfer money -- but again, this is irrelevant.
  - zinekeller 5y ago
    > Second, it's not inherent to the money system to use Visa / Mastercard. You can use other ways to transfer money -- but again, this is irrelevant. To highlight this, Americans are grappling with Zelle (which is just rolled out) and ACH while their neighbors to the north have Interac running relatively seamlessly and Europeans have SEPA and even some countries have local feeless/reasonably priced quick transfer systems like Swish/iDeal, and discussing how Asians handle their transfer and payments would just shake heads on why those systems aren't available stateside (I'll pick India's UPI and the (mainland) Chinese system as representatives, but that doesn't mean similar systems aren't available elsewhere).
fullstackchris 5y ago
...Or you can use a cryptocurrency like NANO (I'm sure there are others very similar), which is feeless and has nearly no delay to transfer. If there is a scam hiding in there, I've yet to find it. Honestly I've stepped back from the entire crypto space for a while now, the whole space pisses me off, it's all hype and no progress. Or rather, the work that was needed to be done has now been done (feeless, near instantaneous, anonymous, and consensus based transfers of money) is now possible, and yet I still hear the screams about bitcoin daily. It's an outdated technology. A paradigm shift for software for sure, but a now long outdated one. I'm sure bitcoin maximalists will reply in rage, but I can't convince you to see the truth through your speculative emotions, so I won't even try.
- yunohn 5y ago
  > which is feeless and has nearly no delay to transfer You clearly misunderstood the OP. They’re talking about the fees to convert fiat to XYZ crypto. Where can you buy NANO with fiat & zero overhead?
  - chx 5y ago
    > they’re talking about the fees to convert fiat to XYZ crypto. rather the transaction fees.
  - tata71 5y ago
    https://ramp.network/buy/?defaultAsset=ETH https://ramp.network/buy/?defaultAsset=ETH
    - yunohn 5y ago
      Fees: https://support.ramp.network/en/article/what-are-your-fees-1atf5lv/ https://support.ramp.network/en/article/what-are-your-fees-1...
- Blackstone4 5y ago
  It’s funny, when I see critics of crypto currencies, there’s always one crypto currency which solves that particular problem. Crypto advocates always seem to have another argument in their toolkit. If you put forwards an economic argument against, they will rave about the technical benefits. If you bring technical arguments, they will shout about the economic benefits or how this currencies over here solves that problem. Quite magical and convenient to be honest. Circular arguments similar to debating the existence of God…
lgrapenthin 5y ago
What you describe is not special to crypto. Every currency exchange is "always winning". The rest is not very logical.
- chx 5y ago
  Nope, you misunderstand what I am saying. Every transaction loses money and this is built in. That's not true for cash.
  - tata71 5y ago
    Every transaction between humans ever has had some theoretical inefficiency. The question is: whose value is being lost, and do they care enough to take action?
bko 5y ago
> In the real world, the amount of currency increases when a bank extends a loan which then creates more value by such things as being using as capital, allowing you to enjoy a home now instead of decades later and so forth Or the central bank decides to flip a switch and create trillions of dollars in money with the stoke of a key and distributes it to parties it feels needs them (mostly banks and other financial parties [0]). This is also a very short term limited view of money. A stable currency is not the norm for most of history. Even today's relatively stable system in western democracies is very short. If you take a longer, broader view of currency and monetary policy you'll see that the system is not sustainable an there is value in an alternative money supply thats based on rules and not reliant on the wisdom of central bankers appointed by politicians. Whether crypto is the answer is different question. But to think that somehow western central bankers are beyond approach and figured it all out in the last 50 years is naive. [0] https://www.covidmoneytracker.org/ https://www.covidmoneytracker.org/
it_does_follow 5y ago
> And no, nothing in the real world is like this Retail FOREX is pretty similar. It's a zero sum game with broker's fees, plus you're playing the game with a lot of very experienced, very well funded institutional investors. I think crypto has basically eaten any interest in retail FOREX, but a few years back it was gaining some traction and I was amazed at how many people were playing a (typically highly leveraged) game that was clearly not in their advantage.
88913527 5y ago
If you compare with other asset classes, you'll find a crisis of legitimacy in all of them. Cash: Not backed by anything but literal 'trust' in the government. It's fiat, and has been since 1971. Government Bonds: similar to cash, also relies on the trust and "too big to fail" ethos. Houses: Greater fool theory. People realized they can simply ban building them to make theirs worth more, as the remaining home supplies are in far-off, economically irrelevant (undesirable) areas. Stocks: Over 90% are owned by the top 10%. Someone had to make it to sell it to someone else, just like crypto.
- cuteboy19 5y ago
  Stocks generate rent and so do houses. That is why these things can continue to grow in value without being called ponzi schemes, though there are certainly speculative phases for both. To compare these things with cryptocurrency is to show a profound misunderstanding of investment. Cryptocurrency does not generate any rent, the sole reason you buy Bitcoin is because you think you might find a greater fool to buy it from you for a higher price. This is identical to how ponzi schemes function
  - lgrapenthin 5y ago
    Cryptocurrencies do generate rent. You can lend them and collect interest on it. Houses don't grow in value because they generate rent - they are deteriorated by residents and need permanent investment in repairs to hold their value. Instead, they grow in value if their environment and surrounding infrastructur improves because more people will want to live there and offer a higher price. Likewise, if more merchants accept a coin, the coin is more valuable because its more flexible.

by chx 5y ago

btdmaster 5y ago

Though I generally agree with the sentiment, there is one significant use case -- transferring money across country borders. Currently, transaction fees on cash transactions are much much higher than they are on cryptocurrencies (maybe except bitcoin) and so this would mean that, in theory, they could be used as a way to transfer goods across country borders.

chx 5y ago
This doesn't change the scam nature of the underpinning mechanism. As I said: it doesn't matter what you do with your coin.
- pibechorro 5y ago
thesuperbigfrog 5y ago
>> there is one significant use case -- transferring money across country borders. Currently, transaction fees on cash transactions are much much higher than they are on cryptocurrencies Ideal for malware ransom payments.
- xmprt 5y ago
  If you think malware ransom payments are the primary use case for transferring money across borders then you should get out of your bubble and make friends with people originating from other countries or with family back in those countries.
matt_holden 5y ago
Is this true though? I can send $1000 USD to someone in France who wants EUR for $7 with Western Union. How does Bitcoin or Ethereum let me do this for less?
chipotle_coyote 5y ago
This has always struck me as…I don't think a "weak" use-case is the terminology I'm looking for, but maybe "fragile"? What I'm trying to get at is that I'm not sure that the existing non-crypto money transfer services have to charge as much as they do to be profitable. If cryptocurrency-based transfers get popular enough that they're perceived as a threat, then I suspect Western Union and friends -- or perhaps new entrants to the market -- will introduce "new products" that are more competitively priced.

127 5y ago

>And once you entered the game, the only way for you to not lose money is to find a greater fool who will take over your crypto"currency", everyone who owns some becomes a proponent of it. It's an ingenious scam. Yes, that's the current pension system.

chx 5y ago
It is not. There are many significant differences: 1. There's no set of players who are guaranteed to win 2. There's no set of players who are guaranteed to lose 3. No one is set to gain by advocating for the "current pension system".
- lukeramsden 5y ago
  > 1. There's no set of players who are guaranteed to win Pension fund managers are guaranteed to win, and they win more as life expectancy goes down. > 2. There's no set of players who are guaranteed to lose Literally everybody else loses, as inflation eats away at the buying power of older peoples' ongoing or soon-to-start pension payments, and young people pay in to a system that there is now no guarantee they will earn from in 40 years time. > 3. No one is set to gain by advocating for the "current pension system". Plenty of people stand to gain, see above, as well as politicians interested in protecting the status quo and electability above all else.
  - chx 5y ago
    You have a political axle to grind, fine, but that's not relevant to the discussion here. Maybe the current US pension is set up like this, maybe not, that's debatable perhaps. But it's not an inherent feature of the systems everywhere unlike the problem with crypto"currencies".
paulryanrogers 5y ago
> Yes, that's the current pension system. If benefits-defined pensions are any indicator then both are unsustainable, and certainly not the future.

5560675260 5y ago

Can't you exchange goods and services for crypto, without using fiat? Transaction fees are obviously unfortunate, but there is just no going around the need for infrastructure. And where is an infrastructure - there are maintenance fees, crypto isn't unique in this regard.

acdha 5y ago
It’s not “without using fiat”: cryptocurrencies are pure fiat currencies but with very weak backing — people need sovereign currencies to pay taxes, pay or get paid for government functions, and participate in large preexisting economies. Nobody has to use cryptocurrency for those reasons and the variable, usually high, fees discourage use — especially in the case of Bitcoin where the economic model incentivizes hoarding. Speculators can generate a lot of noise but it also creates a toxic atmosphere where anyone spending feels like they’re the sucker for not holding it instead. That’s how after a decade there are a tiny number of non-Bitcoin businesses which would notice if Bitcoin disappeared tomorrow.
- chx 5y ago
  > cryptocurrencies are pure fiat currencies I thought even Bitcoin maximalists have given up on this nonsense by now? Fiat money is legal tender backed by the taxation power of a nation state and ultimately, the monopoly on violence. This is why I always write crypto"currency" -- even naming so, crypto shills have pulled an ingenious move pretending their scam is a currency which it utterly is not.
  - acdha 5y ago
    The standard definition of a fiat currency is that it’s not backed by some kind of asset and thus has only the value given by social convention. The most widespread examples are backed by sovereign states and thus have the weight you describe but there have been private ones as well. This is why I described it as a very weak one because it doesn’t even have the commitment of a bank behind it and the extremely highly operating costs means there’s a real long-term risk of not being able to find a buyer.

delaaxe 5y ago

Nobody thinks of crypto in terms of currencies anymore. They’re the same old running on different infrastructure: assets, shares of ownership in a business/protocol, certificate of ownership of a digital item, and yes occasionally, currencies

chx 5y ago
Doesn't matter. It doesn't change the fundamental scam nature of the game. You are describing game rules, it's typical of people in the game -- but it's participating in the game which makes people lose money. It utterly does not matter what happens inside the walled garden of crypto"currencies".
curryslapper 5y ago
Gotta be careful with that one. Crypto typically doesn't have any equity ownership at all. At best it's a revenue stream.

StingyJelly 5y ago

Web3 is a buzzword that makes it sound like something which it isn't, same with AI - dumb but pattern recognition is still useful. I wouldn't call trustless programmable money with defined supply irrelevant since there is no alternative in the mainstream financial system. You are talking about just one function - transfer of value - but that already works just fine. For your points: You can have much lower transaction fees than in Visa / Mastercard (which sometimes you can't even legally charge customer with) so there's a bigger scam by your definition. One has to find someone willing to trade to get goods -_- because dollars instantly turn into chicken soup when you're hungry. For fractional banking you need a trusted system, this is outside of cryptocurrency scope but you can do it atop of cryptocurrecnies just fine, look at exchanges.

chx 5y ago
> You are talking about just one function - transfer of value I do not. I am talking of the only way money enters this system. If there would be no money in the system no one would care. At the end of the day, in this time and place, our society decided money is the ultimate goal. I don't like it but it's what it is. > You can have much lower transaction fees than in Visa / Mastercard First of all: it's nonsensical to compare money to ... money? the problem with crypto"currency" is that it's not money and it's crossing that barrier which makes players lose money. Second, it's not inherent to the money system to use Visa / Mastercard. You can use other ways to transfer money -- but again, this is irrelevant.
- zinekeller 5y ago
  > Second, it's not inherent to the money system to use Visa / Mastercard. You can use other ways to transfer money -- but again, this is irrelevant. To highlight this, Americans are grappling with Zelle (which is just rolled out) and ACH while their neighbors to the north have Interac running relatively seamlessly and Europeans have SEPA and even some countries have local feeless/reasonably priced quick transfer systems like Swish/iDeal, and discussing how Asians handle their transfer and payments would just shake heads on why those systems aren't available stateside (I'll pick India's UPI and the (mainland) Chinese system as representatives, but that doesn't mean similar systems aren't available elsewhere).

fullstackchris 5y ago

...Or you can use a cryptocurrency like NANO (I'm sure there are others very similar), which is feeless and has nearly no delay to transfer. If there is a scam hiding in there, I've yet to find it. Honestly I've stepped back from the entire crypto space for a while now, the whole space pisses me off, it's all hype and no progress. Or rather, the work that was needed to be done has now been done (feeless, near instantaneous, anonymous, and consensus based transfers of money) is now possible, and yet I still hear the screams about bitcoin daily. It's an outdated technology. A paradigm shift for software for sure, but a now long outdated one. I'm sure bitcoin maximalists will reply in rage, but I can't convince you to see the truth through your speculative emotions, so I won't even try.

yunohn 5y ago
> which is feeless and has nearly no delay to transfer You clearly misunderstood the OP. They’re talking about the fees to convert fiat to XYZ crypto. Where can you buy NANO with fiat & zero overhead?
- chx 5y ago
  > they’re talking about the fees to convert fiat to XYZ crypto. rather the transaction fees.
- tata71 5y ago
  https://ramp.network/buy/?defaultAsset=ETH https://ramp.network/buy/?defaultAsset=ETH
  - yunohn 5y ago
    Fees: https://support.ramp.network/en/article/what-are-your-fees-1atf5lv/ https://support.ramp.network/en/article/what-are-your-fees-1...
Blackstone4 5y ago
It’s funny, when I see critics of crypto currencies, there’s always one crypto currency which solves that particular problem. Crypto advocates always seem to have another argument in their toolkit. If you put forwards an economic argument against, they will rave about the technical benefits. If you bring technical arguments, they will shout about the economic benefits or how this currencies over here solves that problem. Quite magical and convenient to be honest. Circular arguments similar to debating the existence of God…

lgrapenthin 5y ago

What you describe is not special to crypto. Every currency exchange is "always winning". The rest is not very logical.

chx 5y ago
Nope, you misunderstand what I am saying. Every transaction loses money and this is built in. That's not true for cash.
- tata71 5y ago
  Every transaction between humans ever has had some theoretical inefficiency. The question is: whose value is being lost, and do they care enough to take action?

bko 5y ago

> In the real world, the amount of currency increases when a bank extends a loan which then creates more value by such things as being using as capital, allowing you to enjoy a home now instead of decades later and so forth Or the central bank decides to flip a switch and create trillions of dollars in money with the stoke of a key and distributes it to parties it feels needs them (mostly banks and other financial parties [0]). This is also a very short term limited view of money. A stable currency is not the norm for most of history. Even today's relatively stable system in western democracies is very short. If you take a longer, broader view of currency and monetary policy you'll see that the system is not sustainable an there is value in an alternative money supply thats based on rules and not reliant on the wisdom of central bankers appointed by politicians. Whether crypto is the answer is different question. But to think that somehow western central bankers are beyond approach and figured it all out in the last 50 years is naive. [0] https://www.covidmoneytracker.org/ https://www.covidmoneytracker.org/

it_does_follow 5y ago

> And no, nothing in the real world is like this Retail FOREX is pretty similar. It's a zero sum game with broker's fees, plus you're playing the game with a lot of very experienced, very well funded institutional investors. I think crypto has basically eaten any interest in retail FOREX, but a few years back it was gaining some traction and I was amazed at how many people were playing a (typically highly leveraged) game that was clearly not in their advantage.

88913527 5y ago

If you compare with other asset classes, you'll find a crisis of legitimacy in all of them. Cash: Not backed by anything but literal 'trust' in the government. It's fiat, and has been since 1971. Government Bonds: similar to cash, also relies on the trust and "too big to fail" ethos. Houses: Greater fool theory. People realized they can simply ban building them to make theirs worth more, as the remaining home supplies are in far-off, economically irrelevant (undesirable) areas. Stocks: Over 90% are owned by the top 10%. Someone had to make it to sell it to someone else, just like crypto.

cuteboy19 5y ago
Stocks generate rent and so do houses. That is why these things can continue to grow in value without being called ponzi schemes, though there are certainly speculative phases for both. To compare these things with cryptocurrency is to show a profound misunderstanding of investment. Cryptocurrency does not generate any rent, the sole reason you buy Bitcoin is because you think you might find a greater fool to buy it from you for a higher price. This is identical to how ponzi schemes function
- lgrapenthin 5y ago
  Cryptocurrencies do generate rent. You can lend them and collect interest on it. Houses don't grow in value because they generate rent - they are deteriorated by residents and need permanent investment in repairs to hold their value. Instead, they grow in value if their environment and surrounding infrastructur improves because more people will want to live there and offer a higher price. Likewise, if more merchants accept a coin, the coin is more valuable because its more flexible.