5 ms·

> The whole thing literally works on competing on consuming more energy. I know this is pedantic, but the competition is about computational power. Energy is

by Nbox9 5y ago

> The whole thing literally works on competing on consuming more energy. I know this is pedantic, but the competition is about computational power. Energy is a significant input. Let’s not ignore the benefit that the more computational power that is spent in the competition the more secure the blockchain is from 51% attacks. Maybe 134 TWh is too high of a price for such a limited use technology such as bitcoin. Maybe we could do the same or more with the less energy intensive PoS technology that ETH 2.0 will bring to the mainstream. Blockchain is the single largest threat to banking, and that doesn’t come without a price.

robomartin 5y ago
> Blockchain is the single largest threat to banking, and that doesn’t come without a price. That's an interesting statement. The first question that occurred to me was: Why does banking have to be threatened? In other words, is this a solution looking for a problem?
- qwertygnu 5y ago
  Yes there are lots of problems with banking. Cryptocurrency does have a reason to exist, though of course we went and fucked it all up. It can help ordinary people outmaneuver oppressive regimes. It can perform that same core functions that banks can (i.e. keeping track of and moving around money) in a public and distributed way. The banking industry (often metonymically known as "Wall Street") is literally the canonical example of greed. There are problems with banking. In a better world, crypto can distribute the power of money. But, since it's a technology born within the system, it is instead used as a way of amassing value, and in the end only making the rich richer.
  - thathndude 5y ago
    I saw a great, pithy tweet recently, and I won’t do it justice, but I’ll give it a shot. Crypto, and Blockchain, are like little fiefdoms that are being created, and the people who create them, and in the process mine the first couple million blocks, will be the Lords. As you say, the rich getting richer. And doing it all by hijacking this message of the “little guys” banding together against the establishment.
    - barnabee 5y ago
      Certainly bitcoin is designed that way, and it’s one of a few reasons why although BTC has a good chance of succeeding as “digital gold”, it has almost no chance of being a general purpose currency. Other chains and tokens have they problem, too, to a great or lesser extent. However that is an implementation decision for each individual project, mostly around how supply is distributed and redistributed, and the inflationary mechanics of the asset. These can be innovated on by forking the original. They are also changeable (technically even in bitcoin, though in reality it seems unlikely), with the risk of forks acting as pressure to make beneficial changes. What I’m saying here is that it is possible and even desirable to design a cryptocurrency which doesn’t work that way, either from the start or perhaps via an “exit to the community” that over time devalues the stakes of founders and early investors and prioritises the users and value creators within the network. There are lots of mechanics that can be used for this, and most experiments so far have been limited or naive but I expect to and we need to see more of this if cryptocurrencies etc. are to succeed.
  - leshow 5y ago
    > The banking industry (often metonymically known as "Wall Street") is literally the canonical example of greed. And crypto isn't? The whole thing runs on FOMO
  - imtringued 5y ago
    In theory, using Bitcoin as payment infrastructure is perfectly legitimate. However, the store of value myth is what everyone believes in and it is what is driving the popularity of Bitcoin. It's not very logical. No, you haven't invented the financial equivalent of the perpetuum mobile. Someone must work hard for all those gains or they disappear into thin air.
  - robomartin 5y ago
    > Yes there are lots of problems with banking. I keep reading versions of this assertion and have yet to read anyone publish a clear list of these "lots" of problems. I am trying to understand. So far, I don't. In other words, so far I still think crypto is a solution looking for a problem. Even worse, to me it feels like early entrants and those with millions to throw at crypto made out like bandits and everyone else is in the grips of a Ponzi scheme that will end badly at some point. I could be wrong, of course, I just know too many people who jumped in and got hurt.
  - zepto 5y ago
    > It can help ordinary people outmaneuver oppressive regimes. An unproven fantasy.
- Nbox9 5y ago
  This is really more of a political question than a technical one. To me it’s hard to separate modern cryptocurrency from the historical context of it’s launch in 2009.
- clippablematt 5y ago
  I feel like lots of people forgot about 2007/08 and the impact on so many people around the world. It was truly painful and destructive. And very clearly people responsible got off free, with bonuses and some even ended up with jobs in the treasury. A lot of people I know working in crypto saw their families hurt badly by that crises and will happily spend their lives trying to build something else (even if the odds are stacked against them). They protested at OWS and saw little political will for change. Eventually we are left with the question: Do we just sit around voting every few years for another colour to be in charge, or do we try build something else, maybe it’ll work, maybe not, failure is ok we already live in a failed state, maybe all we need to do is threaten the existing political/financial institutions so that they do things differently or risk irrelevance. Who know. Trends and forces.
  - dghlsakjg 5y ago
    Serious question: how would cryptocurrencies and defi have helped avoid/mitigate the subprime lending crisis specifically?
    - unicornmama 5y ago
      It wouldn’t have. CoinBros don’t understand that IOUs (debt) have existed across human history and will likely continue to exist. And that most economic activity is done through debt. Once a set of “trusted” actors can issue debt, you have monetary expansion. In Crypto, we have Coinbase, Binance and Tether - the defacto crypto banks. They have the ability to expand the crypto money supply and promise IOUs multiples in excess of their true deposits.
      - johnisgood 5y ago
        Maybe we should focus on Bisq[1], a decentralized bitcoin exchange network. Solves the centralization that is Coinbase, Binance, and so forth. [1] https://bisq.network/ https://bisq.network/
        unicornmama 5y ago
- eric_cc 5y ago
  > Why does banking have to be threatened? Is this a real question?
  - robomartin 5y ago
    Perhaps you deem this a stupid question? Not sure from your comment. Still, we have to be able to ask stupid questions or we don't learn. You seem to think the answer is obvious. Well, what is it then?
    - eric_cc 5y ago
      > Perhaps you deem this a stupid question? Not sure from your comment. Still, we have to be able to ask stupid questions or we don't learn. Ok I agree here. > Well, what is it then? Banks connected to the political/government controlled currencies tend toward corruption. Banks are part of corruptible scheme. Humans are too greedy with the power of money control. History backs it up over and over again.
      - imtringued 5y ago
        History just shows that the insanity of not being able to represent a saturated market (negative interest) with your money system leads to war where people try to get rid of market saturation. The broken window fallacy is an answer to getting positive interest in an economy that isn't growing. They are both equally illogical and for the same reason. The idea of a god given right to 0% interest is the reason why currencies collapse and Bitcoin is sharing that flaw instead of getting rid of it.
      - robomartin 5y ago
        > Banks <snip> tend toward corruption. Can you give examples of this in modern first world economies? I am sure there are plenty of examples of banking issues and corruption in third world countries. I am interested in understanding your conclusion that banks tend towards corruption. In other words, it seems you are saying that all banking asymptotically (and inevitably?) end up on the corrupt side of the equation. Not sure I know how to identify that or point out examples myself. Can you help with this?
imtringued 5y ago
I don't really see how cryptocurrency is supposed to be a threat to banking. You can still implement banking on top of cryptocurrency. You know, through loans. Of course there is the caveat nobody is insane enough to agree to Bitcoin denominated debt. Dogecoin might work though.
- ItsMonkk 5y ago
  We already have that. It's called Tether.

by Nbox9 5y ago

robomartin 5y ago

> Blockchain is the single largest threat to banking, and that doesn’t come without a price. That's an interesting statement. The first question that occurred to me was: Why does banking have to be threatened? In other words, is this a solution looking for a problem?

qwertygnu 5y ago
Yes there are lots of problems with banking. Cryptocurrency does have a reason to exist, though of course we went and fucked it all up. It can help ordinary people outmaneuver oppressive regimes. It can perform that same core functions that banks can (i.e. keeping track of and moving around money) in a public and distributed way. The banking industry (often metonymically known as "Wall Street") is literally the canonical example of greed. There are problems with banking. In a better world, crypto can distribute the power of money. But, since it's a technology born within the system, it is instead used as a way of amassing value, and in the end only making the rich richer.
- thathndude 5y ago
  I saw a great, pithy tweet recently, and I won’t do it justice, but I’ll give it a shot. Crypto, and Blockchain, are like little fiefdoms that are being created, and the people who create them, and in the process mine the first couple million blocks, will be the Lords. As you say, the rich getting richer. And doing it all by hijacking this message of the “little guys” banding together against the establishment.
  - barnabee 5y ago
    Certainly bitcoin is designed that way, and it’s one of a few reasons why although BTC has a good chance of succeeding as “digital gold”, it has almost no chance of being a general purpose currency. Other chains and tokens have they problem, too, to a great or lesser extent. However that is an implementation decision for each individual project, mostly around how supply is distributed and redistributed, and the inflationary mechanics of the asset. These can be innovated on by forking the original. They are also changeable (technically even in bitcoin, though in reality it seems unlikely), with the risk of forks acting as pressure to make beneficial changes. What I’m saying here is that it is possible and even desirable to design a cryptocurrency which doesn’t work that way, either from the start or perhaps via an “exit to the community” that over time devalues the stakes of founders and early investors and prioritises the users and value creators within the network. There are lots of mechanics that can be used for this, and most experiments so far have been limited or naive but I expect to and we need to see more of this if cryptocurrencies etc. are to succeed.
- leshow 5y ago
  > The banking industry (often metonymically known as "Wall Street") is literally the canonical example of greed. And crypto isn't? The whole thing runs on FOMO
- imtringued 5y ago
  In theory, using Bitcoin as payment infrastructure is perfectly legitimate. However, the store of value myth is what everyone believes in and it is what is driving the popularity of Bitcoin. It's not very logical. No, you haven't invented the financial equivalent of the perpetuum mobile. Someone must work hard for all those gains or they disappear into thin air.
- robomartin 5y ago
  > Yes there are lots of problems with banking. I keep reading versions of this assertion and have yet to read anyone publish a clear list of these "lots" of problems. I am trying to understand. So far, I don't. In other words, so far I still think crypto is a solution looking for a problem. Even worse, to me it feels like early entrants and those with millions to throw at crypto made out like bandits and everyone else is in the grips of a Ponzi scheme that will end badly at some point. I could be wrong, of course, I just know too many people who jumped in and got hurt.
- zepto 5y ago
  > It can help ordinary people outmaneuver oppressive regimes. An unproven fantasy.
Nbox9 5y ago
This is really more of a political question than a technical one. To me it’s hard to separate modern cryptocurrency from the historical context of it’s launch in 2009.
clippablematt 5y ago
I feel like lots of people forgot about 2007/08 and the impact on so many people around the world. It was truly painful and destructive. And very clearly people responsible got off free, with bonuses and some even ended up with jobs in the treasury. A lot of people I know working in crypto saw their families hurt badly by that crises and will happily spend their lives trying to build something else (even if the odds are stacked against them). They protested at OWS and saw little political will for change. Eventually we are left with the question: Do we just sit around voting every few years for another colour to be in charge, or do we try build something else, maybe it’ll work, maybe not, failure is ok we already live in a failed state, maybe all we need to do is threaten the existing political/financial institutions so that they do things differently or risk irrelevance. Who know. Trends and forces.
- dghlsakjg 5y ago
  Serious question: how would cryptocurrencies and defi have helped avoid/mitigate the subprime lending crisis specifically?
  - unicornmama 5y ago
    It wouldn’t have. CoinBros don’t understand that IOUs (debt) have existed across human history and will likely continue to exist. And that most economic activity is done through debt. Once a set of “trusted” actors can issue debt, you have monetary expansion. In Crypto, we have Coinbase, Binance and Tether - the defacto crypto banks. They have the ability to expand the crypto money supply and promise IOUs multiples in excess of their true deposits.
    - johnisgood 5y ago
      Maybe we should focus on Bisq[1], a decentralized bitcoin exchange network. Solves the centralization that is Coinbase, Binance, and so forth. [1] https://bisq.network/ https://bisq.network/
      - unicornmama 5y ago
eric_cc 5y ago
> Why does banking have to be threatened? Is this a real question?
- robomartin 5y ago
  Perhaps you deem this a stupid question? Not sure from your comment. Still, we have to be able to ask stupid questions or we don't learn. You seem to think the answer is obvious. Well, what is it then?
  - eric_cc 5y ago
    > Perhaps you deem this a stupid question? Not sure from your comment. Still, we have to be able to ask stupid questions or we don't learn. Ok I agree here. > Well, what is it then? Banks connected to the political/government controlled currencies tend toward corruption. Banks are part of corruptible scheme. Humans are too greedy with the power of money control. History backs it up over and over again.
    - imtringued 5y ago
      History just shows that the insanity of not being able to represent a saturated market (negative interest) with your money system leads to war where people try to get rid of market saturation. The broken window fallacy is an answer to getting positive interest in an economy that isn't growing. They are both equally illogical and for the same reason. The idea of a god given right to 0% interest is the reason why currencies collapse and Bitcoin is sharing that flaw instead of getting rid of it.
    - robomartin 5y ago
      > Banks <snip> tend toward corruption. Can you give examples of this in modern first world economies? I am sure there are plenty of examples of banking issues and corruption in third world countries. I am interested in understanding your conclusion that banks tend towards corruption. In other words, it seems you are saying that all banking asymptotically (and inevitably?) end up on the corrupt side of the equation. Not sure I know how to identify that or point out examples myself. Can you help with this?

imtringued 5y ago

I don't really see how cryptocurrency is supposed to be a threat to banking. You can still implement banking on top of cryptocurrency. You know, through loans. Of course there is the caveat nobody is insane enough to agree to Bitcoin denominated debt. Dogecoin might work though.

ItsMonkk 5y ago
We already have that. It's called Tether.