10 ms·

It's pretty amazing watching crypto speedrun the last 200 years of financial history failures all over again.

dontbenebby 4y ago
I mean, they basically only use it for structuring or tax evasion most of the time. Bitcoin et al are a Paypal killer, as in a low cost way to transmit currency or whatever, but you can do that in other less wasteful ways. It's a shame what it turned into is something people place on comprmised mnachines to silently siphon up CPU cycles for profit. (Especially since often those profits went towards things like Juche nukes.)
- capableweb 4y ago
  > Bitcoin et al are a Paypal killer, as in a low cost way to transmit currency or whatever, but you can do that in other less wasteful ways. You're talking about Proof of Stake or you imagine some other novel way of transferring currency digitally, without centralization and securely?
- toolz 4y ago
  I'm genuinely glad crypto enthusiasts spend more time defending their position than they do being as obtuse against fiat as this comment is towards crypto (in my opinion). If they were as unnecessarily hostile, I imagine it might sound something like this: It takes nearly half of the US budget with their military to secure the USD value by destabilizing poor countries and exploiting them for their crude oil, which is the most traded commodity in the world by fiat. In relation it's trivial to dissociate your identity from crypto you own, making it impossible for someone to prove you have crypto to steal, even with a gun to your head. All secured by harmless nerds using fractions of a percent of the worlds electricity usage, which doesn't even begin to approach the electricity the military utilizes from even a single one of the largest militarized nations. It's obvious to me that neither of these are honest positions to take in a debate about the benefits and costs of these classes of assets.
  - nojito 4y ago
    >USD value by destabilizing poor countries and exploiting them for their crude oil The US is a net exporter of oil and has been for years now.
    - toolz 4y ago
      Was this intended on negating my comment about crude oil being used to establish USDs relative stability? Because I don't think this fact does anything of the sort, although it's still informative and interesting, I'm just not sure I understand the point you might be trying to make in this context.
      - nojito 4y ago
        The USD isn’t pegged to oil.
        dontbenebby 4y ago
        USD is just pieces of paper https://www.theonion.com/u-s-economy-grinds-to-halt-as-nation-realizes-money-ju-1819571322 https://www.theonion.com/u-s-economy-grinds-to-halt-as-natio...
        thaway2839 4y ago
        I don't understand your link to the Onion here. Are you joking or do you not realize that the Onion is satire?
  - hash872 4y ago
    >It takes nearly half of the US budget with their military to secure the USD value The US spends a little less than 12% of its annual budget on its military https://www.cbo.gov/publication/57170 https://www.cbo.gov/publication/57170
    - toolz 4y ago
trompetenaccoun 4y ago
Can you explain? What happened in the past 200 years that cryptocurrencies are mirroring?
- charwalker 4y ago
  Crypto solves a bunch of problems of its own making while retaining all the human problems (fraud, etc) of the existing banking system without hundreds of years of regulations and policy to stabilize systems and attempt accountability. Tether is analogous to the gold standard but without verifying the gold exists in reserves, or ever existed at all. Exchanges are facilitating billions in money laundering and fraud while eating massive fees and paying millions to founders. Transactions can be hidden behind shell wallets/groups and filtered through many exchanges reducing transparency and increasing odds of successful illegal activity. There is a ton of legitimate criticism just looking at the fraud side of Crypto and how lack of regulation in that space enables a ton of crime. It's often drowned out by PR or the next big blockchain based thing that seems flashy but still comes with all the same problems as regular physical money. It's like asking your IT group to install spyware on users workstations instead of respecting or enforcing HR policy. It's a people problem, not a tech problem.
- gonzo41 4y ago
  Banks running out of money and just failing outright leaving their customers high and dry for one. In addition to this, the scams, the lack of any consumer protection. The hype bubbles, the sheer amount of personal faith that is required to have confidence etc etc. Also the lack of standards and the terrible promise of decentralization, yet the reality of centralized markets and brokers. (This is a more modern failure).
  - a2tech 4y ago
    Difference here is I don't think the government is going to step in and regulate them so they're safer. I think the government is going to treat this all as fraud eventually
    - 4y ago
orbz 4y ago
Part of me feels like this is actually somewhat a feature. It's like a research implementation of an economy that iterates more rapidly than the current economy. What if the real value in all of this is finding out mechanisms to bake consumer protections, transparency, anti-money laundering and fraud detection into the main economy in an automated fashion?
- ryanbrunner 4y ago
  It's a very costly experiment, both in terms of the energy required to power the experiment, and financial losses of the participants (many of whom are almost definitely not treating their investments as an experiment)
- mikhmha 4y ago
  You could just observe the economy of an MMORPG - no blockchain needed.
- Jabbles 4y ago
  Ah, so it's like AlphaZero, it learns from scratch, starting by making random moves.
- selimthegrim 4y ago
  The real treasure was all the regulators we suborned along the way
- TacoToni 4y ago
  Nothing to add here, but this is fascinating to think about. Thank you for this perspective.
- Izkata 4y ago
  On the individual level, a few years of bitcoin helped me get an intuitive-level understanding of why common investing advice works.
- thaway2839 4y ago
  The real economy actually produces value. It feeds people, clothes people, entertains people, etc. even if it does so imperfectly. The economy's value dropping 20% a day would represent a real problem that needs to be addressed. We saw this when COVID began. The stock markets were plummeting as people increasingly realized that COVID was not gonna be gone by Easter, and that this would affect us for some time and how impactful it would be. With crypto, the only thing that the falling prices is tell us that another layer of the onion of scams that crypto is built upon has been peeled, and the only real question is how deep the layers go and whether there even is something of value deep inside.
rchaud 4y ago
When brogrammers try to do finance from 'first principles'.

I mean, they basically only use it for structuring or tax evasion most of the time. Bitcoin et al are a Paypal killer, as in a low cost way to transmit currency or whatever, but you can do that in other less wasteful ways. It's a shame what it turned into is something people place on comprmised mnachines to silently siphon up CPU cycles for profit. (Especially since often those profits went towards things like Juche nukes.)

capableweb 4y ago
> Bitcoin et al are a Paypal killer, as in a low cost way to transmit currency or whatever, but you can do that in other less wasteful ways. You're talking about Proof of Stake or you imagine some other novel way of transferring currency digitally, without centralization and securely?
toolz 4y ago
I'm genuinely glad crypto enthusiasts spend more time defending their position than they do being as obtuse against fiat as this comment is towards crypto (in my opinion). If they were as unnecessarily hostile, I imagine it might sound something like this: It takes nearly half of the US budget with their military to secure the USD value by destabilizing poor countries and exploiting them for their crude oil, which is the most traded commodity in the world by fiat. In relation it's trivial to dissociate your identity from crypto you own, making it impossible for someone to prove you have crypto to steal, even with a gun to your head. All secured by harmless nerds using fractions of a percent of the worlds electricity usage, which doesn't even begin to approach the electricity the military utilizes from even a single one of the largest militarized nations. It's obvious to me that neither of these are honest positions to take in a debate about the benefits and costs of these classes of assets.
- nojito 4y ago
  >USD value by destabilizing poor countries and exploiting them for their crude oil The US is a net exporter of oil and has been for years now.
  - toolz 4y ago
    Was this intended on negating my comment about crude oil being used to establish USDs relative stability? Because I don't think this fact does anything of the sort, although it's still informative and interesting, I'm just not sure I understand the point you might be trying to make in this context.
    - nojito 4y ago
      The USD isn’t pegged to oil.
      - dontbenebby 4y ago
        USD is just pieces of paper https://www.theonion.com/u-s-economy-grinds-to-halt-as-nation-realizes-money-ju-1819571322 https://www.theonion.com/u-s-economy-grinds-to-halt-as-natio...
        thaway2839 4y ago
        I don't understand your link to the Onion here. Are you joking or do you not realize that the Onion is satire?
- hash872 4y ago
  >It takes nearly half of the US budget with their military to secure the USD value The US spends a little less than 12% of its annual budget on its military https://www.cbo.gov/publication/57170 https://www.cbo.gov/publication/57170
  - toolz 4y ago

trompetenaccoun 4y ago

Can you explain? What happened in the past 200 years that cryptocurrencies are mirroring?

charwalker 4y ago
Crypto solves a bunch of problems of its own making while retaining all the human problems (fraud, etc) of the existing banking system without hundreds of years of regulations and policy to stabilize systems and attempt accountability. Tether is analogous to the gold standard but without verifying the gold exists in reserves, or ever existed at all. Exchanges are facilitating billions in money laundering and fraud while eating massive fees and paying millions to founders. Transactions can be hidden behind shell wallets/groups and filtered through many exchanges reducing transparency and increasing odds of successful illegal activity. There is a ton of legitimate criticism just looking at the fraud side of Crypto and how lack of regulation in that space enables a ton of crime. It's often drowned out by PR or the next big blockchain based thing that seems flashy but still comes with all the same problems as regular physical money. It's like asking your IT group to install spyware on users workstations instead of respecting or enforcing HR policy. It's a people problem, not a tech problem.
gonzo41 4y ago
Banks running out of money and just failing outright leaving their customers high and dry for one. In addition to this, the scams, the lack of any consumer protection. The hype bubbles, the sheer amount of personal faith that is required to have confidence etc etc. Also the lack of standards and the terrible promise of decentralization, yet the reality of centralized markets and brokers. (This is a more modern failure).
- a2tech 4y ago
  Difference here is I don't think the government is going to step in and regulate them so they're safer. I think the government is going to treat this all as fraud eventually
  - 4y ago

orbz 4y ago

Part of me feels like this is actually somewhat a feature. It's like a research implementation of an economy that iterates more rapidly than the current economy. What if the real value in all of this is finding out mechanisms to bake consumer protections, transparency, anti-money laundering and fraud detection into the main economy in an automated fashion?

ryanbrunner 4y ago
It's a very costly experiment, both in terms of the energy required to power the experiment, and financial losses of the participants (many of whom are almost definitely not treating their investments as an experiment)
mikhmha 4y ago
You could just observe the economy of an MMORPG - no blockchain needed.
Jabbles 4y ago
Ah, so it's like AlphaZero, it learns from scratch, starting by making random moves.
selimthegrim 4y ago
The real treasure was all the regulators we suborned along the way
TacoToni 4y ago
Nothing to add here, but this is fascinating to think about. Thank you for this perspective.
Izkata 4y ago
On the individual level, a few years of bitcoin helped me get an intuitive-level understanding of why common investing advice works.
thaway2839 4y ago
The real economy actually produces value. It feeds people, clothes people, entertains people, etc. even if it does so imperfectly. The economy's value dropping 20% a day would represent a real problem that needs to be addressed. We saw this when COVID began. The stock markets were plummeting as people increasingly realized that COVID was not gonna be gone by Easter, and that this would affect us for some time and how impactful it would be. With crypto, the only thing that the falling prices is tell us that another layer of the onion of scams that crypto is built upon has been peeled, and the only real question is how deep the layers go and whether there even is something of value deep inside.

rchaud 4y ago

When brogrammers try to do finance from 'first principles'.