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Bitcoin is absolute garbage and in theory any critique is good, but it bothers me that half of the points in this article aren't even internally logically consi

Bitcoin is absolute garbage and in theory any critique is good, but it bothers me that half of the points in this article aren't even internally logically consistent: > “Blockchain is just like the early internet”. No, it isn’t. Satoshi Nakamoto’s paper was published in October 2008 ... <proceeds to compare age of Bitcoin to the age of some modern tech corps>. Nothing about the original statement is predicated on the age of the tech. Even if it did, I don't see what modern tech corps have to do with anything - they didn't build the internet. Also, on age, the early internet dates back to the 60s and was still considered "early" 30+ years later. > There are centralisation and technical problems with these solutions, but let’s ignore those for now, and call these systems for what they are. Second layers act as a reminder that the original networks cannot scale, and need a second network on top of the network to operate. This is an admission of failure. If we ignore the technical problems, 2nd-layer seem like a practical solution to a problem. Why is that a failure? (now I know that they DO have technical problems - so maybe let's talk about those specifically, instead of making weird nonsensical statements) > “Bitcoin is digital gold”. It isn’t, gold is gold, it requires no maintenance fee, once it’s mined [...] Bitcoin [...] need to be maintained by miners using electricity [...] at least to keep the mining running. Why is mining excluded for gold and not for Bitcoin in your analogy? --- As for my own opinions... > Concluding, will crypto die? This is two questions: 1. Will the crypto market die? Hopefully, though I'm less than optimistic. 2. Will blockchain tech die? Of course not. It's not very useful but it has niche applications - there's plenty of obscure tech that's kept around by enthusiasts, so I think we can be sure that even after the last cryptobro is bankrupted, there'll still be a group of geeks somewhere hacking on the blockchain for fun.

snarfy 4y ago
Crypto is basically gambling, and gambling is alive and well. This is why I don't see crypto dying anytime soon. It will die when a better gamble comes along.
- asdajksah2123 4y ago
  Crypto in its current form is worse than gambling. With gambling, unless it's illegally rigged, you know your expected value will be say $0.90 for every $1 you put in. However, in return, there is a possibility that you may have a one in million chance of getting back $100 for the $1 you put in. Crypto, on the other hand, is a Ponzi scheme. It has no internal value and the current owners of crypto are paid entirely through the money brought in by the future owners of crypto. Now, to be completely fair, I don't think the majority of crypto backers perceive it as a Ponzi scheme. There were many people working in the space (maybe even the overwhelming majority, although that's unlikely to be true anymore), who actually believed that Bitcoin had real value because it could become a real currency. Similarly, there are people who actually believe that Smart Contracts, and NFTs are actual useful technologies. The problem, however, is that (a) none of those technologies have panned out, possibly because blockchain simply does not solve the problems people actually face...it solves the problem of "What if the entity who owns the database we are recording our transactions in is unreliable". In practice, this does not seem to be a major problem at all, and further, blockchain appears to be a terrible way to solve this problem. (b) Even if the technologies are useful, the limited tokens and the fact that they are largely hoarded by early adopters, simply serves to enrich those early adopters, which drastically reduces the utility of any crypto based technologies for future users, the ones who are actually using the technology. Crypto tokens are an implicit tax on technology. It would be like if Google was invented, but to use Google you necessarily had to pay $0.10 every search, but that cost is ridiculously dynamic, often jumping up to $1/search as well. Google would never take off and it would impose an insane tax on everyone else, and society as a whole. The latter is why crypto in its current form isn't just a successful/unsuccessful tech, its an actively society damaging technology.
  - landemva 4y ago
    > largely hoarded by early adopters Agree with this in that chains like Solana and Ripple are controlled by the startup folks or the big VCs. I avoid these centralized money grabs.
- stephc_int13 4y ago
  Crypto is inherently very different than gambling. People have been doing highly speculative investment in many different areas and this is clearly not something that will die. Crypto has been a fantastic vehicle for that because of the hype and the lack of regulation, but this won't last, people can't be fooled forever. Of course there will be other vehicles, hopefully less destructive than this one...
SideburnsOfDoom 4y ago
> Why is mining excluded for gold and not for Bitcoin in your analogy? because: "Bitcoin needs to be maintained by miners using electricity" like they say? Gold doesn't need continued mining to continue being gold.
- nailer 4y ago
  You need to rent a safety deposit box for the gold to continue being your gold though.
  - SideburnsOfDoom 4y ago
    > You need to rent a safety deposit box for the gold No, I don't. Where I keep my valuables is my business, and it depends on how much gold I have. People kept gold long before safety deposit boxes at banks were a thing. And, paraphrasing above: why is secure storage included for gold and not for Bitcoin in your analogy?
    - nailer 4y ago
      > Where I keep my valuables is my business, and it depends on how much gold I have. People kept gold long before safety deposit boxes at banks were a thing. Sure but the other options often increase risk or have a different cost. Some Vietnamese friends used to keep money in their house and then had their homes invaded. I imagine that's not entirely uncommon. > And, paraphrasing above: why is secure storage included for gold and not for Bitcoin in your analogy? Oh that's my point - we should definitely take in storage costs for both.
- landemva 4y ago
  Bitcoin miners consume electricity to provide fast and affordable assay. For small value Bitcoin transfers, lightning network is even cheaper and faster.
xnorswap 4y ago
The internet didn't really take off until the web, but once the web was there it completely exploded from there on out. Comparing to the web makes bitcoin look pathetic scratching around for a problem for its solution over a decade later. If you're all about Second layer scaling, why not just use existing second layers like VISA? If you're transacting via a trusted second layer to provide scaling, you might as well have that as a layer over the dollar, or gold, or other stable asset.
- SkyMarshal 4y ago
  The web is the wrong analogy/comparison for Bitcoin. Bitcoin was never designed or intended to be anything like the web. It was designed to be a money and payments system, no more no less. If you must compare it to anything, compare it to dollars, euro, yen, gold coins, etc. You may be thinking of Ethereum and any other “crypto” claiming to be “Web 3”, where they want to store and run entire websites on their distributed database. But that’s not Bitcoin.
  - xnorswap 4y ago
    I'm not the one making the comparison, it's people going around touting that you should invest because "it's like the early internet, it'll be everywhere soon and worth trillions".
- whatisweb3 4y ago
  Rollups have a few properties that are distinct from a centralized VISA system. One is that they are cryptographically verifiable, with this data posted onto Ethereum. Another is that they often include permissionless traits - such as L1 smart contract calls that allow users to “force” transactions from L1 to L2 and back even if the centralized sequencer is trying to censor or block the user’s transaction. In this way, you can always withdraw from a rollup L2 back to Ethereum just by signing with your key. This goes in hand with forkability - lots of rollups are open source - and composability. You can withdraw your L2 tokens back to L1, and put them in another rollup. If VISA or PayPal blocks your account, you are stuck.
masswerk 4y ago
Regarding (1), the real statement here is, "many of us were there at the start of the Web, it was evident that it was going to change the world, and it was usable from the start." And it's mostly about the the Web (but you may include things like The Well, which were promising from the start.) The point is really about immediately apparent use. And, if you're going to date the Web back to the humble beginnings of ARPANET in the early 1970s, you've to include hashes published in the NYT classifieds in the 1970s/1980s for crypto, as well. Regarding (2), why not have a functional implementation right from the beginning? (Analogously, why have a really bad OS fixed by the application layer?) The point in (3) is really about availability and value in times of crisis. Gold is already mined, as you hold it.
- lucideer 4y ago
  To be clear, I'm not disagreeing with the intent behind the article, I just think the execution is exceptionally poor. If you're going to argue against something, make your arguments compelling (your comment's first point is, the author's wasn't). On your second & third points: 2: Improving tech over time is good. Creating perfect tech on day 1 isn't realistic. The early internet was built on a lot of tech we no longer use (or are a attempting to move away from) 3: The "I already have gold but no bitcoin in a time of crisis" qualifier seems odd and contrived. Gold is a resource valued for its scarcity, Bitcoin is an attempt to move away from artificial scarcity of fiat to mathematically guaranteed scarcity. Ultimately they share problems: mining of physical goods is environmentally destructive and tying economic prosperity to inflating resource value based on scarcity instead of utility is also ultimately problematic for society in the long term. So the analogy does work -they're fundamentally very comparable. The primary differentiators are (a) the scale of cryptomining is greater per-unit than for physical resources (+ transactional impact), and (b) Bitcoin's got a whole load of extra bad problems that gold doesn't: e.g. instability.
  - landemva 4y ago
    > tying economic prosperity to inflating resource value based on scarcity instead of utility Why would the store of value or the unit of account or the medium of exchange (the money) determine prosperity? The public accounting ledger provides transparency and auditability as a service which can reduce friction to economic prosperity. Neither gold nor Bitcoin creates a fun day at the beach - or whatever your measure of prosperity may be.
acdha 4y ago
> Even if it did, I don't see what modern tech corps have to do with anything - they didn't build the internet. Also, on age, the early internet dates back to the 60s and was still considered "early" 30+ years later. I think the tech companies are relevant because they pivoted to find useful applications on top of that basic infrastructure, which the hundreds of blockchain companies have failed to do. AOL made millions even even people were held up by dialup and other limitations, for example, because things like chat were popular and low bandwidth. The early internet comparisons are complicated by the history of computing – adoption was slow when computers filled a large room and cost millions, for example - but I think that has a similar story. Even when a PC cost as much as a car and you were looking at 300 bps modems on phone lines billed by the hour, people found things worth paying for and there were profitable companies with fairly large subscriber bases by the late 1970s. There were people who met online and were grandparents before smartphones became common! In contrast, blockchains were globally available on day one with no constraints other than their design limitations. There’s no problem which you could point to like a telecom monopoly, the severe hardware limitations prior to the mid-90s, etc. which would keep popular usage low.
- nightski 4y ago
  The limit on Bitcoin that I saw early on was market cap, liquidity, and stability. As the first two rise, so should the third. It's been a long grind to the market cap today and it still has a ways to go. But to build up that momentum and trust takes a lot of time. I'm not necessarily saying Bitcoin should do this or that I desire it. Just stating one reason why it takes time.
  - acdha 4y ago
    I don’t think it’s that simple: Bitcoin is the purest form of fiat currency backed by neither sovereign authority or hard assets, and the deflationary model encourages hoarding unless you’re convinced it’s permanently going down. That combination seems likely to produce volatility even with fairly large amounts of capital flowing in.
cdiddy2 4y ago
Gold is worse than Bitcoin in every way. 1. Its harder to store gold 2. Its harder to verify the integrity of gold 3. Its harder to transfer gold

snarfy 4y ago

Crypto is basically gambling, and gambling is alive and well. This is why I don't see crypto dying anytime soon. It will die when a better gamble comes along.

asdajksah2123 4y ago
Crypto in its current form is worse than gambling. With gambling, unless it's illegally rigged, you know your expected value will be say $0.90 for every $1 you put in. However, in return, there is a possibility that you may have a one in million chance of getting back $100 for the $1 you put in. Crypto, on the other hand, is a Ponzi scheme. It has no internal value and the current owners of crypto are paid entirely through the money brought in by the future owners of crypto. Now, to be completely fair, I don't think the majority of crypto backers perceive it as a Ponzi scheme. There were many people working in the space (maybe even the overwhelming majority, although that's unlikely to be true anymore), who actually believed that Bitcoin had real value because it could become a real currency. Similarly, there are people who actually believe that Smart Contracts, and NFTs are actual useful technologies. The problem, however, is that (a) none of those technologies have panned out, possibly because blockchain simply does not solve the problems people actually face...it solves the problem of "What if the entity who owns the database we are recording our transactions in is unreliable". In practice, this does not seem to be a major problem at all, and further, blockchain appears to be a terrible way to solve this problem. (b) Even if the technologies are useful, the limited tokens and the fact that they are largely hoarded by early adopters, simply serves to enrich those early adopters, which drastically reduces the utility of any crypto based technologies for future users, the ones who are actually using the technology. Crypto tokens are an implicit tax on technology. It would be like if Google was invented, but to use Google you necessarily had to pay $0.10 every search, but that cost is ridiculously dynamic, often jumping up to $1/search as well. Google would never take off and it would impose an insane tax on everyone else, and society as a whole. The latter is why crypto in its current form isn't just a successful/unsuccessful tech, its an actively society damaging technology.
- landemva 4y ago
  > largely hoarded by early adopters Agree with this in that chains like Solana and Ripple are controlled by the startup folks or the big VCs. I avoid these centralized money grabs.
stephc_int13 4y ago
Crypto is inherently very different than gambling. People have been doing highly speculative investment in many different areas and this is clearly not something that will die. Crypto has been a fantastic vehicle for that because of the hype and the lack of regulation, but this won't last, people can't be fooled forever. Of course there will be other vehicles, hopefully less destructive than this one...

SideburnsOfDoom 4y ago

> Why is mining excluded for gold and not for Bitcoin in your analogy? because: "Bitcoin needs to be maintained by miners using electricity" like they say? Gold doesn't need continued mining to continue being gold.

nailer 4y ago
You need to rent a safety deposit box for the gold to continue being your gold though.
- SideburnsOfDoom 4y ago
  > You need to rent a safety deposit box for the gold No, I don't. Where I keep my valuables is my business, and it depends on how much gold I have. People kept gold long before safety deposit boxes at banks were a thing. And, paraphrasing above: why is secure storage included for gold and not for Bitcoin in your analogy?
  - nailer 4y ago
    > Where I keep my valuables is my business, and it depends on how much gold I have. People kept gold long before safety deposit boxes at banks were a thing. Sure but the other options often increase risk or have a different cost. Some Vietnamese friends used to keep money in their house and then had their homes invaded. I imagine that's not entirely uncommon. > And, paraphrasing above: why is secure storage included for gold and not for Bitcoin in your analogy? Oh that's my point - we should definitely take in storage costs for both.
landemva 4y ago
Bitcoin miners consume electricity to provide fast and affordable assay. For small value Bitcoin transfers, lightning network is even cheaper and faster.

xnorswap 4y ago

The internet didn't really take off until the web, but once the web was there it completely exploded from there on out. Comparing to the web makes bitcoin look pathetic scratching around for a problem for its solution over a decade later. If you're all about Second layer scaling, why not just use existing second layers like VISA? If you're transacting via a trusted second layer to provide scaling, you might as well have that as a layer over the dollar, or gold, or other stable asset.

SkyMarshal 4y ago
The web is the wrong analogy/comparison for Bitcoin. Bitcoin was never designed or intended to be anything like the web. It was designed to be a money and payments system, no more no less. If you must compare it to anything, compare it to dollars, euro, yen, gold coins, etc. You may be thinking of Ethereum and any other “crypto” claiming to be “Web 3”, where they want to store and run entire websites on their distributed database. But that’s not Bitcoin.
- xnorswap 4y ago
  I'm not the one making the comparison, it's people going around touting that you should invest because "it's like the early internet, it'll be everywhere soon and worth trillions".
whatisweb3 4y ago
Rollups have a few properties that are distinct from a centralized VISA system. One is that they are cryptographically verifiable, with this data posted onto Ethereum. Another is that they often include permissionless traits - such as L1 smart contract calls that allow users to “force” transactions from L1 to L2 and back even if the centralized sequencer is trying to censor or block the user’s transaction. In this way, you can always withdraw from a rollup L2 back to Ethereum just by signing with your key. This goes in hand with forkability - lots of rollups are open source - and composability. You can withdraw your L2 tokens back to L1, and put them in another rollup. If VISA or PayPal blocks your account, you are stuck.

masswerk 4y ago

Regarding (1), the real statement here is, "many of us were there at the start of the Web, it was evident that it was going to change the world, and it was usable from the start." And it's mostly about the the Web (but you may include things like The Well, which were promising from the start.) The point is really about immediately apparent use. And, if you're going to date the Web back to the humble beginnings of ARPANET in the early 1970s, you've to include hashes published in the NYT classifieds in the 1970s/1980s for crypto, as well. Regarding (2), why not have a functional implementation right from the beginning? (Analogously, why have a really bad OS fixed by the application layer?) The point in (3) is really about availability and value in times of crisis. Gold is already mined, as you hold it.

lucideer 4y ago
To be clear, I'm not disagreeing with the intent behind the article, I just think the execution is exceptionally poor. If you're going to argue against something, make your arguments compelling (your comment's first point is, the author's wasn't). On your second & third points: 2: Improving tech over time is good. Creating perfect tech on day 1 isn't realistic. The early internet was built on a lot of tech we no longer use (or are a attempting to move away from) 3: The "I already have gold but no bitcoin in a time of crisis" qualifier seems odd and contrived. Gold is a resource valued for its scarcity, Bitcoin is an attempt to move away from artificial scarcity of fiat to mathematically guaranteed scarcity. Ultimately they share problems: mining of physical goods is environmentally destructive and tying economic prosperity to inflating resource value based on scarcity instead of utility is also ultimately problematic for society in the long term. So the analogy does work -they're fundamentally very comparable. The primary differentiators are (a) the scale of cryptomining is greater per-unit than for physical resources (+ transactional impact), and (b) Bitcoin's got a whole load of extra bad problems that gold doesn't: e.g. instability.
- landemva 4y ago
  > tying economic prosperity to inflating resource value based on scarcity instead of utility Why would the store of value or the unit of account or the medium of exchange (the money) determine prosperity? The public accounting ledger provides transparency and auditability as a service which can reduce friction to economic prosperity. Neither gold nor Bitcoin creates a fun day at the beach - or whatever your measure of prosperity may be.

acdha 4y ago

> Even if it did, I don't see what modern tech corps have to do with anything - they didn't build the internet. Also, on age, the early internet dates back to the 60s and was still considered "early" 30+ years later. I think the tech companies are relevant because they pivoted to find useful applications on top of that basic infrastructure, which the hundreds of blockchain companies have failed to do. AOL made millions even even people were held up by dialup and other limitations, for example, because things like chat were popular and low bandwidth. The early internet comparisons are complicated by the history of computing – adoption was slow when computers filled a large room and cost millions, for example - but I think that has a similar story. Even when a PC cost as much as a car and you were looking at 300 bps modems on phone lines billed by the hour, people found things worth paying for and there were profitable companies with fairly large subscriber bases by the late 1970s. There were people who met online and were grandparents before smartphones became common! In contrast, blockchains were globally available on day one with no constraints other than their design limitations. There’s no problem which you could point to like a telecom monopoly, the severe hardware limitations prior to the mid-90s, etc. which would keep popular usage low.

nightski 4y ago
The limit on Bitcoin that I saw early on was market cap, liquidity, and stability. As the first two rise, so should the third. It's been a long grind to the market cap today and it still has a ways to go. But to build up that momentum and trust takes a lot of time. I'm not necessarily saying Bitcoin should do this or that I desire it. Just stating one reason why it takes time.
- acdha 4y ago
  I don’t think it’s that simple: Bitcoin is the purest form of fiat currency backed by neither sovereign authority or hard assets, and the deflationary model encourages hoarding unless you’re convinced it’s permanently going down. That combination seems likely to produce volatility even with fairly large amounts of capital flowing in.

cdiddy2 4y ago

Gold is worse than Bitcoin in every way. 1. Its harder to store gold 2. Its harder to verify the integrity of gold 3. Its harder to transfer gold