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I was a crypto skeptic for many years. If you look at crypto purely from an engineering lens, you'll always find it wanting. What I didn't understand was that c

by npad 4y ago

I was a crypto skeptic for many years. If you look at crypto purely from an engineering lens, you'll always find it wanting. What I didn't understand was that crypto is as much of an economic and political project, as it is an engineering project. If you think decentralisation and trustlessness are valuable, you should think crypto is important. If you don't care for decentralisation then being negative on crypto is a consistent position.

dfee 4y ago
Replace “crypto” with “GPL” and the comment still makes sense. And, at the same time, still makes no sense.
- danuker 4y ago
  The point of the comment is: governments have abused their position of power, by bailing out irresponsible banks, by giving them an oligopoly in the first place, and by doing all this through spending your savings through inflation. Therefore, an un-debaseable, trustless and liquid asset is crucial in making the powers-that-be accountable for their actions.
TapWaterBandit 4y ago
Exactly, if you have complete faith and trust in conventional FIAT currencies and the systems they use to transact the use cases for crypto also seem far less compelling. As an example, the appeal of deflationary Bitcoin is much more salient to a citizen of Argentina than to a citizen of the USA (although recent inflation might make the appeal more obvious). Or on the even more extreme end, the citizen of Zimbabwe would much rather have decentralised solid crypto of one sort or another than their local currency.
- lottin 4y ago
  No one has complete faith in anything. The institutional system in liberal democracies is such that no single institution has all the power, precisely because we don't completely trust the government. The answer to dysfunctional governments is not get rid of the government. This is just dumb. We need well-functioning governments to enforce human rights, and law and order.
  - ephbit 4y ago
    > The answer to dysfunctional governments is not get rid of the government. As you're probably aware, central banks are usually intended to operate somewhat indepentently from governments. (One could argue to which degree it's actually the case, though.) Which means that monetary systems are supposed to be somewhat indepentent from governments. Assuming that Bitcoin were to be adopted as some kind of reserve currency (held by central banks) and also used by states and citizens, where exactly is the "getting rid of the government" happening there? Exactly, nowhere. > We need well-functioning governments to enforce human rights, and law and order. Agree. But this doesn't rule out the possibility of indeed using Bitcoin.
    - lottin 4y ago
      Central banks are public institutions in charge of conducting monetary policy, they have a public mandate and are accountable to the legislative branch. They're therefore part of the government, even if they have some degree of independence. Bitcoin undermines governments. For example, bitcoin adoption would seriously limit the government's ability to manage the economy via monetary policy. It would also affect its ability to prevent unrestricted movement of capitals in and out of the country, and within its borders. Financial regulations would be harder to enforce, and a larger chunk of the economy would go underground. So, clearly, it would weaken governments. I don't know that anyone disputes this.
      - ephbit 4y ago
        > Bitcoin undermines governments. Bitcoin undermines certain possibilities of governments, yes. As most western governments have been successfully hijacked by big corporations so that politics are skewed heavily in favor of the corporations' interests, it has become a tough decision IMO between: - A: letting governments continue to be the executive branch of the Exxons, Apples, Googles, Facebooks, Amazons, ... and letting the latter continue with making few people richer and letting Gini coefficient converge to 1 - B: taking away governments' favorite (because in the beginning it's so nicely subtle that people won't object) instrument (more debt) to enact politics and thus forcing them to make uncomfortable choices instead The current system appears to be instable (at least to me). Instability hurts more than continuity, everything else being equal. Bitcoin could become either an effective threat to discipline governments to not let their spending get out of hand or the very foundation to build a new stable monetary system. We'll see. If it turns out to be more stable, people/institutions will in the long term converge to it. > ... and a larger chunk of the economy would go underground. Which is exactly what needs to happen (ideally not in a crash but in a soft transition) in order to get humanity's ecological foot print to a sustainable size in the short time that's left. As soon as the economy has transitioned to sustainable processes, it may of course grow again, but right now, what we need is gentle shrinkage or "degrowth".
- kareemsabri 4y ago
  How is bitcoin deflationary when the price has fallen 50% or so in the past year, and appears to be highly correlated with tech growth stocks?
  - olalonde 4y ago
    Bitcoin critics: A deflationary money is bad because people will not spend it. Also Bitcoin critics: Bitcoin is not deflationary.
    - usrn 4y ago
      I'm not convinced deflation is worse than inflation anyway. With deflation people hoard currency and with inflation they hoard assets.
      - ephbit 4y ago
        I'd go even further: inflation is setting the incentive for full throttle in the economy. When you're seeing one extreme weather event after the other and a climate catastrophe is imminent, is it a reasonable choice to run the world economy at full throttle, considering that this economy is still based on ~ 80 % fossil energy? It's like when your car is speeding towards a concrete wall ... and you keep your foot on the gas ... because you "want to make a really fast turn to the side to avoid the wall".
    - kareemsabri 4y ago
      This is a strawman. I would certainly see the value in a deflationary asset. Is your claim Bitcoin is deflationary, and if so how do you define deflationary?
puranjay 4y ago
No crypto project has managed to solve the trilemma problem so far. Decentralized chains are way too expensive and the cheap chains are heavily centralized.
- randomran01234 4y ago
  ZK Rollups effectively solve this problem by moving computation and data storage off chain without sacrificing security. These protocols include on-chain exit mechanisms so that tokens are never at risk of being taken by the sequencer.
Geee 4y ago
I think this is very close to the truth. Most tech people, like the author of the article, look Bitcoin only from technological perspective. This completely misses the point, because Bitcoin is worse on many purely technical metrics compared to centralized currencies. The benefits are economical and societal, and they are not very easily understood. This misunderstanding leads to both "anti-crypto" and altcoins that are supposedly better than Bitcoin.

by npad 4y ago

dfee 4y ago

Replace “crypto” with “GPL” and the comment still makes sense. And, at the same time, still makes no sense.

danuker 4y ago
The point of the comment is: governments have abused their position of power, by bailing out irresponsible banks, by giving them an oligopoly in the first place, and by doing all this through spending your savings through inflation. Therefore, an un-debaseable, trustless and liquid asset is crucial in making the powers-that-be accountable for their actions.

TapWaterBandit 4y ago

Exactly, if you have complete faith and trust in conventional FIAT currencies and the systems they use to transact the use cases for crypto also seem far less compelling. As an example, the appeal of deflationary Bitcoin is much more salient to a citizen of Argentina than to a citizen of the USA (although recent inflation might make the appeal more obvious). Or on the even more extreme end, the citizen of Zimbabwe would much rather have decentralised solid crypto of one sort or another than their local currency.

lottin 4y ago
No one has complete faith in anything. The institutional system in liberal democracies is such that no single institution has all the power, precisely because we don't completely trust the government. The answer to dysfunctional governments is not get rid of the government. This is just dumb. We need well-functioning governments to enforce human rights, and law and order.
- ephbit 4y ago
  > The answer to dysfunctional governments is not get rid of the government. As you're probably aware, central banks are usually intended to operate somewhat indepentently from governments. (One could argue to which degree it's actually the case, though.) Which means that monetary systems are supposed to be somewhat indepentent from governments. Assuming that Bitcoin were to be adopted as some kind of reserve currency (held by central banks) and also used by states and citizens, where exactly is the "getting rid of the government" happening there? Exactly, nowhere. > We need well-functioning governments to enforce human rights, and law and order. Agree. But this doesn't rule out the possibility of indeed using Bitcoin.
  - lottin 4y ago
    Central banks are public institutions in charge of conducting monetary policy, they have a public mandate and are accountable to the legislative branch. They're therefore part of the government, even if they have some degree of independence. Bitcoin undermines governments. For example, bitcoin adoption would seriously limit the government's ability to manage the economy via monetary policy. It would also affect its ability to prevent unrestricted movement of capitals in and out of the country, and within its borders. Financial regulations would be harder to enforce, and a larger chunk of the economy would go underground. So, clearly, it would weaken governments. I don't know that anyone disputes this.
    - ephbit 4y ago
      > Bitcoin undermines governments. Bitcoin undermines certain possibilities of governments, yes. As most western governments have been successfully hijacked by big corporations so that politics are skewed heavily in favor of the corporations' interests, it has become a tough decision IMO between: - A: letting governments continue to be the executive branch of the Exxons, Apples, Googles, Facebooks, Amazons, ... and letting the latter continue with making few people richer and letting Gini coefficient converge to 1 - B: taking away governments' favorite (because in the beginning it's so nicely subtle that people won't object) instrument (more debt) to enact politics and thus forcing them to make uncomfortable choices instead The current system appears to be instable (at least to me). Instability hurts more than continuity, everything else being equal. Bitcoin could become either an effective threat to discipline governments to not let their spending get out of hand or the very foundation to build a new stable monetary system. We'll see. If it turns out to be more stable, people/institutions will in the long term converge to it. > ... and a larger chunk of the economy would go underground. Which is exactly what needs to happen (ideally not in a crash but in a soft transition) in order to get humanity's ecological foot print to a sustainable size in the short time that's left. As soon as the economy has transitioned to sustainable processes, it may of course grow again, but right now, what we need is gentle shrinkage or "degrowth".
kareemsabri 4y ago
How is bitcoin deflationary when the price has fallen 50% or so in the past year, and appears to be highly correlated with tech growth stocks?
- olalonde 4y ago
  Bitcoin critics: A deflationary money is bad because people will not spend it. Also Bitcoin critics: Bitcoin is not deflationary.
  - usrn 4y ago
    I'm not convinced deflation is worse than inflation anyway. With deflation people hoard currency and with inflation they hoard assets.
    - ephbit 4y ago
      I'd go even further: inflation is setting the incentive for full throttle in the economy. When you're seeing one extreme weather event after the other and a climate catastrophe is imminent, is it a reasonable choice to run the world economy at full throttle, considering that this economy is still based on ~ 80 % fossil energy? It's like when your car is speeding towards a concrete wall ... and you keep your foot on the gas ... because you "want to make a really fast turn to the side to avoid the wall".
  - kareemsabri 4y ago
    This is a strawman. I would certainly see the value in a deflationary asset. Is your claim Bitcoin is deflationary, and if so how do you define deflationary?

puranjay 4y ago

No crypto project has managed to solve the trilemma problem so far. Decentralized chains are way too expensive and the cheap chains are heavily centralized.

randomran01234 4y ago
ZK Rollups effectively solve this problem by moving computation and data storage off chain without sacrificing security. These protocols include on-chain exit mechanisms so that tokens are never at risk of being taken by the sequencer.

Geee 4y ago

I think this is very close to the truth. Most tech people, like the author of the article, look Bitcoin only from technological perspective. This completely misses the point, because Bitcoin is worse on many purely technical metrics compared to centralized currencies. The benefits are economical and societal, and they are not very easily understood. This misunderstanding leads to both "anti-crypto" and altcoins that are supposedly better than Bitcoin.