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There is also a rebuttal article by the same fund: https://www.bvp.com/atlas/the-antidote-to-cryptophobia/ https://www.bvp.com/atlas/the-antidote-to-cryptophobi

by avivo 4y ago

There is also a rebuttal article by the same fund: https://www.bvp.com/atlas/the-antidote-to-cryptophobia/ https://www.bvp.com/atlas/the-antidote-to-cryptophobia/ That said, I think Adam (the original article) is closer to being right. He doesn't even get into the thing that originally made me incredibly excited about the potential of blockchain tech—the way it lets one create a new sort of custom and irrevocable 'physics' for information and incentives. But the same irrevocability is now what makes me deeply concerned. If we get something wrong, it may be impossible to change, unlike normal human systems. It's like building Facebook, except the original design might be at least partially locked in functionally forever—and so issues created by naive founders can never be resolved and may warp our political and economic systems. I have also generally found that crypto/blockchain/web3 doesn't address the problems its adherents say it can solve ( https://aviv.medium.com/the-magical-decentralization-fallacy-69b426d16bdc https://aviv.medium.com/the-magical-decentralization-fallacy... ), particularly changing power structures to get to a better world. Trying to find alternative solutions to address the power issues around centralized platforms is what eventually led me down a very different path ( to http://platformdemocracy.com/ http://platformdemocracy.com/ ).

whatisweb3 4y ago
I loosely agree with you but am a little more optimistic. I see centralized lenders and services like Celsius and 3AC collapsing and running off with money, or blocking withdrawals - this would not occur had the loans been made on-chain through smart contracts, and DeFi platforms like Aave are holding up just fine during this downturn. This is an example of a shift of power away from incumbents and toward the people en masse, should they choose to actually understand and use the decentralized blockchain. > If we get something wrong, it may be impossible to change, unlike normal human systems. It's not far fetched that blockchains will change as humans adapt to new challenges. An example is already happening: Eth is transitioning from PoW to PoS and moving to a layer two centric ecosystem to meet block space demand. There are real concerns with adding functionality on top of the blockchain without understanding its immutability - like the ridiculous suggestion of putting twitter or a period tracking app on-chain.
- wpietri 4y ago
  To me this is fundamentally contradictory: > the people en masse, should they choose to actually understand and use the decentralized blockchain I used to work for financial traders. Our company was essentially the same as the companies of professional gamblers. We knew we were playing zero-sum games. Our goal was to create asymmetries in information and skill such that we got the money that other people were putting in. In the markets we played in, the opposition was mostly other well-funded players. But you can bet that there are well-funded groups with snowdrifts of math PhDs who are happy to take money from "the people en masse" that decide to trade in the markets. Those people already exist in the non-blockchain financial economy. From predatory lenders to fake health care plans [1] to ponzi schemers, frauds, and grifters. What mainly keeps them in check is regulation, not regular people "choosing to actually understand". Because what distinguishes "the people en masse" from the people who prey on them is that the predators can devote all their time and attention to one particular hustle, while "the people en masse" have to defend against every hustle, while trying to be good at their jobs, take care of their families, and live their lives. So the hustlers are always going to be one step ahead from regular folk. Doubly so in an unregulated, rapidly evolving space with metastasizing complexity like you see in the cryptocurrency/ico/nft/defi/web3/wft space. [1] https://www.nytimes.com/2020/01/02/health/christian-health-care-insurance.html https://www.nytimes.com/2020/01/02/health/christian-health-c...
  - whatisweb3 4y ago
    > So the hustlers are always going to be one step ahead from regular folk. I don’t disagree. This is always going to be the case in any global market with information asymmetries - grandma’s investments are not going to do as well as a hedge fund with a team of 50.* The difference is: the people entering CeFi are having access to their funds revoked, and a counterparty failing to repay debts while fleeing to Dubai. while the people entering DeFi have not had access to their funds affected, and are not worrying about counterparty risk. This is why it is a shift in power - the users retain control of their funds and leveraged positions, as opposed to placing that power entirely in the hands of tradfi and CeFi companies. * ironically a lot of big players like 3AC are getting wiped out too, so it isn’t always true
syzygyhack 4y ago
> But the same irrevocability is now what makes me deeply concerned. Strange hang-up to have. Irrevocability is not a trait that is fundamental to blockchain applications. If the application is smart-contract based, irrevocability is a choice at the source code level. Just because one transaction in a block is irrevocable doesn't mean that another transaction in a future block can't undo whatever arbitrary state change was committed in the first. It depends entirely on what you make possible in the contract code. Neither does the claim hold water for L1s that are the application (e.g. Bitcoin, Monero, etc.). If the entire Bitcoin core development team turned rogue, social consensus from the broader Bitcoin community would soon establish a new canonical chain. Hard forks can be and have been used. This is blockchain 101. Cryptographic and economic guarantees are not fundamental; the social layer is.
- jjoonathan 4y ago
  But that's just it: bad choices in the social layer become nearly irrevocable once a self-interested, powerful elite emerges. The bad choices put them on top and they will do anything to stay there.
  - syzygyhack 4y ago
    Not at all. If a self-interested minority emerges, the majority can fork away anew (see: Steem & Hive).
    - jjoonathan 4y ago
      lol. You forgot to weight by wealth. Regular economics uses the same dirty trick when it talks about value creation rather than wealth-weighted value creation. It stuffs all its dirty laundry in that one weight term and then "forgets" to talk about it. Oops!
      - syzygyhack 4y ago
        Weight by wealth? You are failing to understand the basic concept of a hard fork. Social consensus doesn't care what your number on the blockchain says. Case in point, the Hive hard fork. One very prominent and widely unliked individual purchased majority ownership of the STEEM token. Weighted by wealth, they could now control the chain, its governance, and most notably unlock tokens (20% of the supply) that were (per social consensus between Steem and its community) not supposed to be unlocked. So, what did the Steem community do in response? They hard forked the platform, launching Hive. All STEEM holders could migrate their assets to Hive, except the individual in question who attempted to takeover Steem via wealth. The malicious elite was cut off entirely. Today, two years on, Hive is still gaining in activity and has more than twice the market cap of STEEM. Comparatively, Steem has become a ghost town.
thebeastie 4y ago
I had a look at the platform democracy page and I couldn’t see any explanation of how the process avoids capture by particular interest groups.
- avivo 4y ago
  It's a good question. There are several kinds of answers, two of which I allude to but don't go into a lot of detail. The answers based off of peer reviewed research can be found in the article in Science that I quote. There is also the answer based off a sort of existence proof—so far, even when this is been done at a high level around extremely controversial and impactful issues, this has not appeared to be a significant problem. To be clear, the process that I am describing there is not some newfangled idea that I just dreamed up. It's something that has been used by France, Ireland, South Korea, even the EU as whole, is likely to be institutionalized as part of the governance of these organizations. It's just fairly new so not that many people have heard about it.

by avivo 4y ago

whatisweb3 4y ago

I loosely agree with you but am a little more optimistic. I see centralized lenders and services like Celsius and 3AC collapsing and running off with money, or blocking withdrawals - this would not occur had the loans been made on-chain through smart contracts, and DeFi platforms like Aave are holding up just fine during this downturn. This is an example of a shift of power away from incumbents and toward the people en masse, should they choose to actually understand and use the decentralized blockchain. > If we get something wrong, it may be impossible to change, unlike normal human systems. It's not far fetched that blockchains will change as humans adapt to new challenges. An example is already happening: Eth is transitioning from PoW to PoS and moving to a layer two centric ecosystem to meet block space demand. There are real concerns with adding functionality on top of the blockchain without understanding its immutability - like the ridiculous suggestion of putting twitter or a period tracking app on-chain.

wpietri 4y ago
To me this is fundamentally contradictory: > the people en masse, should they choose to actually understand and use the decentralized blockchain I used to work for financial traders. Our company was essentially the same as the companies of professional gamblers. We knew we were playing zero-sum games. Our goal was to create asymmetries in information and skill such that we got the money that other people were putting in. In the markets we played in, the opposition was mostly other well-funded players. But you can bet that there are well-funded groups with snowdrifts of math PhDs who are happy to take money from "the people en masse" that decide to trade in the markets. Those people already exist in the non-blockchain financial economy. From predatory lenders to fake health care plans [1] to ponzi schemers, frauds, and grifters. What mainly keeps them in check is regulation, not regular people "choosing to actually understand". Because what distinguishes "the people en masse" from the people who prey on them is that the predators can devote all their time and attention to one particular hustle, while "the people en masse" have to defend against every hustle, while trying to be good at their jobs, take care of their families, and live their lives. So the hustlers are always going to be one step ahead from regular folk. Doubly so in an unregulated, rapidly evolving space with metastasizing complexity like you see in the cryptocurrency/ico/nft/defi/web3/wft space. [1] https://www.nytimes.com/2020/01/02/health/christian-health-care-insurance.html https://www.nytimes.com/2020/01/02/health/christian-health-c...
- whatisweb3 4y ago
  > So the hustlers are always going to be one step ahead from regular folk. I don’t disagree. This is always going to be the case in any global market with information asymmetries - grandma’s investments are not going to do as well as a hedge fund with a team of 50.* The difference is: the people entering CeFi are having access to their funds revoked, and a counterparty failing to repay debts while fleeing to Dubai. while the people entering DeFi have not had access to their funds affected, and are not worrying about counterparty risk. This is why it is a shift in power - the users retain control of their funds and leveraged positions, as opposed to placing that power entirely in the hands of tradfi and CeFi companies. * ironically a lot of big players like 3AC are getting wiped out too, so it isn’t always true

syzygyhack 4y ago

> But the same irrevocability is now what makes me deeply concerned. Strange hang-up to have. Irrevocability is not a trait that is fundamental to blockchain applications. If the application is smart-contract based, irrevocability is a choice at the source code level. Just because one transaction in a block is irrevocable doesn't mean that another transaction in a future block can't undo whatever arbitrary state change was committed in the first. It depends entirely on what you make possible in the contract code. Neither does the claim hold water for L1s that are the application (e.g. Bitcoin, Monero, etc.). If the entire Bitcoin core development team turned rogue, social consensus from the broader Bitcoin community would soon establish a new canonical chain. Hard forks can be and have been used. This is blockchain 101. Cryptographic and economic guarantees are not fundamental; the social layer is.

jjoonathan 4y ago
But that's just it: bad choices in the social layer become nearly irrevocable once a self-interested, powerful elite emerges. The bad choices put them on top and they will do anything to stay there.
- syzygyhack 4y ago
  Not at all. If a self-interested minority emerges, the majority can fork away anew (see: Steem & Hive).
  - jjoonathan 4y ago
    lol. You forgot to weight by wealth. Regular economics uses the same dirty trick when it talks about value creation rather than wealth-weighted value creation. It stuffs all its dirty laundry in that one weight term and then "forgets" to talk about it. Oops!
    - syzygyhack 4y ago
      Weight by wealth? You are failing to understand the basic concept of a hard fork. Social consensus doesn't care what your number on the blockchain says. Case in point, the Hive hard fork. One very prominent and widely unliked individual purchased majority ownership of the STEEM token. Weighted by wealth, they could now control the chain, its governance, and most notably unlock tokens (20% of the supply) that were (per social consensus between Steem and its community) not supposed to be unlocked. So, what did the Steem community do in response? They hard forked the platform, launching Hive. All STEEM holders could migrate their assets to Hive, except the individual in question who attempted to takeover Steem via wealth. The malicious elite was cut off entirely. Today, two years on, Hive is still gaining in activity and has more than twice the market cap of STEEM. Comparatively, Steem has become a ghost town.

thebeastie 4y ago

I had a look at the platform democracy page and I couldn’t see any explanation of how the process avoids capture by particular interest groups.

avivo 4y ago
It's a good question. There are several kinds of answers, two of which I allude to but don't go into a lot of detail. The answers based off of peer reviewed research can be found in the article in Science that I quote. There is also the answer based off a sort of existence proof—so far, even when this is been done at a high level around extremely controversial and impactful issues, this has not appeared to be a significant problem. To be clear, the process that I am describing there is not some newfangled idea that I just dreamed up. It's something that has been used by France, Ireland, South Korea, even the EU as whole, is likely to be institutionalized as part of the governance of these organizations. It's just fairly new so not that many people have heard about it.