6 ms·

The second problem is some of the smartest people in the world rather point out its flaws than recognise the potential and help fix the flaws

by dylkil 5y ago

qalmakka 5y ago
Imagine you woke up one day set on the intention of digging a tunnel to China in your backyard by only using cutlery. Would throwing more people in the hole armed with spoons fix the inherent issues with your project? The reason why there are lots of experts criticizing the current implementations and crypto concepts is because it's vastly easier to realize the flaws in one's idea than coming up with a new proposal. Yes, PoW works but it does not make sense, it's just a very interesting gimmick that makes cryptocurrency doable. That does not mean it actually makes sense or that it represents a stable foundation for a digital currency in practice.
- datadata 5y ago
  In the digging example, the goal is to complete the tunnel. If the tunnel is not completed, the project would be a failure. You say that PoW works and makes cryptocurrency doable, yet you conclude that it is a failure. But you don't define what the goal of it is. What specific goal would you want crypto to achieve to falsify your belief that it is a failure?
  - adgjlsfhk1 5y ago
    pow has transaction fees that are too high for it to be usable as a currency.
    - datadata 5y ago
      Lightning network on bitcoin has fees that are a few cents at most, is this still a problem?
  - qalmakka 5y ago
    PoW makes cryptocurrencies doable (i.e. they somewhat work), but not viable. PoW only simulates the creation of value, it does not create it. Yes, sure, fiat currency has also its value made out of thin air, but that value often corresponds to the strength of country's government, economy or fiscal system. Sure, for instance the Yen may become hyper or underinflated, but as long as Japan is an industrial power it's very likely you want Yens to trade with Japan, to travel there, ... and that the Japanese government will do what it must be done on the international markets to keep the value of its currency stable. This gives "real" fiat currency a link with the real economy. Can you say the same for cryptocurrency? Where does the value of a cryptocurrency come from? The answer is "from its scarcity", but scarcity itself doesn't make something valuable. What makes Bitcoin valuable is its tradeability with real world currencies, such as the Euro and the Dollar, and the fact that people want to spend them to get Bitcoin. Bitcoin is not a real currency, is just a very complicated bank with extra steps, based on an asset whose value basically depends by the biggest Ponzi scheme ever known to man.
    - datadata 5y ago
      Scarcity by itself is not sufficient to make something have value, completely agree. But scarcity is necessary for value, so it is still important! There are two notions of scarcity: Scarcity of bitcoin themselves (21 million), and scarcity around being able to create different cryptocurrency. Clearly the only weakness is in the later. Two points on this: Bitcoin commands a majority of proof of work energy. This does tie the digital scarcity of bitcoin to something in the physical world. You can't create another bitcoin without spending a similar amount on PoW. It's not that the scarcity of energy consumed translates to value in bitcoin directly, but rather it gives a high cost for creating an alternative to bitcoin. This is not unlike state issue fiats-- the Yen has value because Japan is a large state. I wouldn't trust a fiat from a state that was just created and had no citizens. So the scarcity of powerful states translates into a scarcity of fiat. Second, Bitcoin was the original invention of true digital scarcity. This makes it a natural place for a focal point. This by itself does not mean bitcoin has value, but it should be better at becoming valuable than other cryptocurrencies. But bitcoin is also used for transactions and payments. It has growing links to the real economy just like other fiat currencies. The trend here is growing. If the trend continues-- meaning more and more businesses and workers take bitcoin as payment, surely you must conclude at some point bitcoin would then have real value, just like the Yen example? > Bitcoin is not a real currency, is just a very complicated bank with extra steps, based on an asset whose value basically depends by the biggest Ponzi scheme ever known to man. I think this is disingenuous-- A ponzi means that through intentional and planned deception invested funds are stolen. Sure, bitcoin is volatile and might crash again. But there is no structured fraud here, it is a free market, nothing like a Ponzi. You still didn't define a falsifiable goal-- What would have to happen for you to consider cryptocurrencies to be successful, what is the end of the tunnel? It feels to me like you are assuming it will fail (it is a ponzi!), and then working backwards from that assumption to find how to justify it.
jqpabc123 5y ago
Smart people recognize that the base premise is simply unworkable. The idea that anyone can create money out of electrons is really no better than the idea that anyone can create money out of paper. There is no real reason to believe the first will be any more successful than the second. There are close to 10,000 different cryptocurrencies currently in use. And the number is increasing all the time. You don't have to be really smart to see that over time, these are all likely to tend toward the same value. The essential elements that will seal their fate --- trust and consensus --- or the lack thereof. The part of the idea that does have some merit is "digital" currency. The Fed is working on it. And when it arrives, crypto will likely vanish back into the electronic ether from whence it sprang.
- datadata 5y ago
  Why do you see the large number of cryptocurrencies an argument supporting their value going to zero? This is like saying that the number of websites is still going up, therefore the value of the internet will go to zero. A more charitable analysis would look at the number of users of cryptocurrency, and especially the number of users of the most prevalent cryptocurrencies, which is indisputably rising.
  - jqpabc123 5y ago
    Why do you see the large number of cryptocurrencies an argument supporting theoretical value going to zero? If too many people can easily make the product, the market quickly becomes saturated and the value starts to tend toward zero and people losing interest in it. Also, in this particular case the product is defective. It doesn't actually function as stated --- as a currency that is widely accepted to buy a huge variety of things both large and small with minimal fees, high transaction volume and low wait times? These are basically just instruments for speculation and fraud. History shows that such schemes can't and won't be sustained over time.
    - datadata 5y ago
      > If anyone can make it, the market quickly becomes saturated and the value tends toward zero and people losing interest in it. You just restated your previous claim, you still didn't give any reason why the value must go to zero-- By the same logic, the market for websites is also saturated, therefore the value of the internet is going to zero.
erulabs 5y ago
I've long stopped believing the smartest people in the world accomplish much at all besides doing extremely well in systems others have designed. Certainly the vast amount of time I've spent thinking about monetary policy offers me no real gains in my life. I know a group of medical doctors and they are brilliant, but they are brilliant critics. They are smarter than me - they focus on what matters. Small things, that they can control. God forbid the world does fly apart at the seams, and maybe some of these epistemological economic thoughts will have been worth thinking - I sure hope it doesn't happen and the smartest people can continue living in tiny boxes. It means a better world, a more stable world. And we do need smart people studying a set of ligaments their whole lives. I find it no surprise that those of us who grew up in extremely chaotic situations tend to think 'bigger' and have a harder time thinking 'smaller'. I do not know the world will remain stable enough to support my career - but all the doctors I know are sure of it. You'll get replies from very well employed, very smart people, who can probably write you an excellent simulation of our discussion, but who will refuse to conceptualize an abstract theory of value, or a world were currency creation happens in a slightly different way. Why would they? It's of no practical value unless the world ends - and you don't want the world to end, do you? People who fought for monarchy because the alternative is chaos were probably smart people. People who fought for heliocentricism were probably very smart, but didn't feel like uprooting the foundation of their world view. Being dumb enough to think thoughts like "well, but what if", in the face of replies like "but it hasn't in a long time!" is only useful if only a tiny subset of us do it. The right strategy for most humans is to ignore that kind of talk. So be it.
- imtringued 5y ago
  If your accounting point of reference is permanence in a world that has a limited lifespan due to entropy you are going to make a lot of absurd conclusions and decisions. From the perspective of someone whose accounting reference has a limited life span you might even be considered insane and psychopathic. For example, gold is a store of value so firing an employee lets you avoid associated with that employee and you can still hire that employee as long as the gold exists, right?? Right?? Everyone knows that gold stops aging and fired peoplee don't need food or shelter.
- _9omd 5y ago
lamontcg 5y ago
"You're too negative, stop telling people that they can't jump off their roof and fly and start being helpful and figuring out how to solve the problem." Honestly we have way too much of this going on in our society. Management with delusional ideas about how to run a company is often spouting more or less this exact same line. Not everything you can dream of is possible in reality.

The second problem is some of the smartest people in the world rather point out its flaws than recognise the potential and help fix the flaws

by dylkil 5y ago

The second problem is some of the smartest people in the world rather point out its flaws than recognise the potential and help fix the flaws

qalmakka 5y ago

Imagine you woke up one day set on the intention of digging a tunnel to China in your backyard by only using cutlery. Would throwing more people in the hole armed with spoons fix the inherent issues with your project? The reason why there are lots of experts criticizing the current implementations and crypto concepts is because it's vastly easier to realize the flaws in one's idea than coming up with a new proposal. Yes, PoW works but it does not make sense, it's just a very interesting gimmick that makes cryptocurrency doable. That does not mean it actually makes sense or that it represents a stable foundation for a digital currency in practice.

datadata 5y ago
In the digging example, the goal is to complete the tunnel. If the tunnel is not completed, the project would be a failure. You say that PoW works and makes cryptocurrency doable, yet you conclude that it is a failure. But you don't define what the goal of it is. What specific goal would you want crypto to achieve to falsify your belief that it is a failure?
- adgjlsfhk1 5y ago
  pow has transaction fees that are too high for it to be usable as a currency.
  - datadata 5y ago
    Lightning network on bitcoin has fees that are a few cents at most, is this still a problem?
- qalmakka 5y ago
  PoW makes cryptocurrencies doable (i.e. they somewhat work), but not viable. PoW only simulates the creation of value, it does not create it. Yes, sure, fiat currency has also its value made out of thin air, but that value often corresponds to the strength of country's government, economy or fiscal system. Sure, for instance the Yen may become hyper or underinflated, but as long as Japan is an industrial power it's very likely you want Yens to trade with Japan, to travel there, ... and that the Japanese government will do what it must be done on the international markets to keep the value of its currency stable. This gives "real" fiat currency a link with the real economy. Can you say the same for cryptocurrency? Where does the value of a cryptocurrency come from? The answer is "from its scarcity", but scarcity itself doesn't make something valuable. What makes Bitcoin valuable is its tradeability with real world currencies, such as the Euro and the Dollar, and the fact that people want to spend them to get Bitcoin. Bitcoin is not a real currency, is just a very complicated bank with extra steps, based on an asset whose value basically depends by the biggest Ponzi scheme ever known to man.
  - datadata 5y ago
    Scarcity by itself is not sufficient to make something have value, completely agree. But scarcity is necessary for value, so it is still important! There are two notions of scarcity: Scarcity of bitcoin themselves (21 million), and scarcity around being able to create different cryptocurrency. Clearly the only weakness is in the later. Two points on this: Bitcoin commands a majority of proof of work energy. This does tie the digital scarcity of bitcoin to something in the physical world. You can't create another bitcoin without spending a similar amount on PoW. It's not that the scarcity of energy consumed translates to value in bitcoin directly, but rather it gives a high cost for creating an alternative to bitcoin. This is not unlike state issue fiats-- the Yen has value because Japan is a large state. I wouldn't trust a fiat from a state that was just created and had no citizens. So the scarcity of powerful states translates into a scarcity of fiat. Second, Bitcoin was the original invention of true digital scarcity. This makes it a natural place for a focal point. This by itself does not mean bitcoin has value, but it should be better at becoming valuable than other cryptocurrencies. But bitcoin is also used for transactions and payments. It has growing links to the real economy just like other fiat currencies. The trend here is growing. If the trend continues-- meaning more and more businesses and workers take bitcoin as payment, surely you must conclude at some point bitcoin would then have real value, just like the Yen example? > Bitcoin is not a real currency, is just a very complicated bank with extra steps, based on an asset whose value basically depends by the biggest Ponzi scheme ever known to man. I think this is disingenuous-- A ponzi means that through intentional and planned deception invested funds are stolen. Sure, bitcoin is volatile and might crash again. But there is no structured fraud here, it is a free market, nothing like a Ponzi. You still didn't define a falsifiable goal-- What would have to happen for you to consider cryptocurrencies to be successful, what is the end of the tunnel? It feels to me like you are assuming it will fail (it is a ponzi!), and then working backwards from that assumption to find how to justify it.

jqpabc123 5y ago

Smart people recognize that the base premise is simply unworkable. The idea that anyone can create money out of electrons is really no better than the idea that anyone can create money out of paper. There is no real reason to believe the first will be any more successful than the second. There are close to 10,000 different cryptocurrencies currently in use. And the number is increasing all the time. You don't have to be really smart to see that over time, these are all likely to tend toward the same value. The essential elements that will seal their fate --- trust and consensus --- or the lack thereof. The part of the idea that does have some merit is "digital" currency. The Fed is working on it. And when it arrives, crypto will likely vanish back into the electronic ether from whence it sprang.

datadata 5y ago
Why do you see the large number of cryptocurrencies an argument supporting their value going to zero? This is like saying that the number of websites is still going up, therefore the value of the internet will go to zero. A more charitable analysis would look at the number of users of cryptocurrency, and especially the number of users of the most prevalent cryptocurrencies, which is indisputably rising.
- jqpabc123 5y ago
  Why do you see the large number of cryptocurrencies an argument supporting theoretical value going to zero? If too many people can easily make the product, the market quickly becomes saturated and the value starts to tend toward zero and people losing interest in it. Also, in this particular case the product is defective. It doesn't actually function as stated --- as a currency that is widely accepted to buy a huge variety of things both large and small with minimal fees, high transaction volume and low wait times? These are basically just instruments for speculation and fraud. History shows that such schemes can't and won't be sustained over time.
  - datadata 5y ago
    > If anyone can make it, the market quickly becomes saturated and the value tends toward zero and people losing interest in it. You just restated your previous claim, you still didn't give any reason why the value must go to zero-- By the same logic, the market for websites is also saturated, therefore the value of the internet is going to zero.

erulabs 5y ago

I've long stopped believing the smartest people in the world accomplish much at all besides doing extremely well in systems others have designed. Certainly the vast amount of time I've spent thinking about monetary policy offers me no real gains in my life. I know a group of medical doctors and they are brilliant, but they are brilliant critics. They are smarter than me - they focus on what matters. Small things, that they can control. God forbid the world does fly apart at the seams, and maybe some of these epistemological economic thoughts will have been worth thinking - I sure hope it doesn't happen and the smartest people can continue living in tiny boxes. It means a better world, a more stable world. And we do need smart people studying a set of ligaments their whole lives. I find it no surprise that those of us who grew up in extremely chaotic situations tend to think 'bigger' and have a harder time thinking 'smaller'. I do not know the world will remain stable enough to support my career - but all the doctors I know are sure of it. You'll get replies from very well employed, very smart people, who can probably write you an excellent simulation of our discussion, but who will refuse to conceptualize an abstract theory of value, or a world were currency creation happens in a slightly different way. Why would they? It's of no practical value unless the world ends - and you don't want the world to end, do you? People who fought for monarchy because the alternative is chaos were probably smart people. People who fought for heliocentricism were probably very smart, but didn't feel like uprooting the foundation of their world view. Being dumb enough to think thoughts like "well, but what if", in the face of replies like "but it hasn't in a long time!" is only useful if only a tiny subset of us do it. The right strategy for most humans is to ignore that kind of talk. So be it.

imtringued 5y ago
If your accounting point of reference is permanence in a world that has a limited lifespan due to entropy you are going to make a lot of absurd conclusions and decisions. From the perspective of someone whose accounting reference has a limited life span you might even be considered insane and psychopathic. For example, gold is a store of value so firing an employee lets you avoid associated with that employee and you can still hire that employee as long as the gold exists, right?? Right?? Everyone knows that gold stops aging and fired peoplee don't need food or shelter.
_9omd 5y ago

lamontcg 5y ago

"You're too negative, stop telling people that they can't jump off their roof and fly and start being helpful and figuring out how to solve the problem." Honestly we have way too much of this going on in our society. Management with delusional ideas about how to run a company is often spouting more or less this exact same line. Not everything you can dream of is possible in reality.