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Reason #5734 why cryptocurrency is a non starter for real people. Challenge: explain to a normie that their life savings is gone forever because of a zero init

by efitz 4y ago

Reason #5734 why cryptocurrency is a non starter for real people. Challenge: explain to a normie that their life savings is gone forever because of a zero initialization vector.

gillesjacobs 4y ago
Challenge: explain to a normie that their life savings is gone forever because of mortgage backed derivatives.
- happytoexplain 4y ago
  Bad analogy. This explanation has actually been done pretty reasonably by a few people. Further than that - after such explanations, it's clear even to normal people who's to blame, whereas software and cryptography are much more esoteric in that department. Of course there is no justice in either case, but at least normal people can see who is most appropriate to behead in the case of the traditional financial catastrophes, in the purely theoretical revolution.
  - rmbyrro 4y ago
    What a flex you pulled off!
    - happytoexplain 4y ago
      Doesn't that mean "brag"? I don't think I'm doing that.
- davewritescode 4y ago
  What a dumb retort If you got burned by mortgage backed derivatives and lost your life savings, it's ultimately because you were (knowingly or not) speculating on the value of real estate assets and making an assumption about future values of said assets. In the case of Nomad, it's that you put yourself at risk by using their service you could've lost everything you put in.
  - nemothekid 4y ago
    >it's ultimately because you were (knowingly or not) speculating on the value of real estate assets [...] >it's ultimately because you were (knowingly or not) speculating on the value of crypto assets Not seeing how these are different
    - pwinnski 4y ago
      They're not. Just as "everyone" was saying that those particular real estate assets were incredibly risky, so too is "everyone" saying that all crypto assets are incredibly risky.
  - rmbyrro 4y ago
    I'm sorry, but they were selling shitty sub-prime mortgages as AAA investments, my friend. They claimed high-risk mortgages would turn AAA by the magic of financial and statistical shenanigans. That's not far from "zero initialized vector" shenanigans. Investing in AAA securities is not speculation, by financial standards, by the way.
    - NaturalPhallacy 4y ago
      >Investing in AAA securities is not speculation, by financial standards, by the way. I would argue that it is now after seeing the bullshit the ratings agencies pulled during that fleecing of the world.
- TomVDB 4y ago
  The first challenge is to find those normies. Somebody who directly invested in MBS is by definition not a normie.
  - dcolkitt 4y ago
    Somebody who directly invested the majority of their money in an experimental bridge protocol that raised its seed round 3 months ago is by definition not a normie.
    - function_seven 4y ago
      Which reinforces the top of this thread: "Reason #5734 why cryptocurrency is a non starter for real people."
      - obilgic 4y ago
        However cryptocurrency != "an experimental bridge protocol that raised its seed round 3 months ago"
        hn_throwaway_99 4y ago
        The main point still stands. The crypto world sees "the code is the law" and non-repudiable/non-reversible transactions as a feature. The rest of the world (correctly in my view) sees it as a bug.
        woojoo666 4y ago
        That "main point" was never justified here. Commenters just assumed that a hack on an experimental bridge protocol reflected on crypto as a whole
    - ohgodplsno 4y ago
      No wall street banker was running around telling everyone how awesome MBSes are. However, morons spamming TikTok, Twitter, Facebook and every social network to find a sucker to invest in their super 20% profit moon monkey future currency can be found in a minute, reaching hundreds of thousands. Plenty of normies lose their money in this.
- quickthrowman 4y ago
  ‘Normies’ didn’t lose all of their money selling credit default options and swaps on mortgage-backed bonds. They wouldn’t have access to the markets for those instruments or the capital to do so, and if they had access or capital, they weren’t a normie.
- g8oz 4y ago
  "The Big Short" did it pretty well.
scottiebarnes 4y ago
Why are "normies" keeping their life savings on platforms whose express purpose and utility is cross network token swapping?
- arlcode 4y ago
  Because their loved ones, or peers or Facebook advertisement told them it's safe and a good way to stick it to the man. Usually just depositing money in a bank doesn't get it stolen so the assumption isn't unreasonable. Even if it's only 0.25*life saving that's still devastating for most people.
  - rmbyrro 4y ago
    Normies should not put 25% even on VC-backed startups, let alone anonymous crypto shenanigans
  - scottiebarnes 4y ago
    I'm confused about why anyone is comparing the security of a defi token swapping platform to that of a fiat savings account. If you want an apple to apples comparison you should be comparing the security of a savings account to that of a cold wallet. Those are much more alike in their function. I don't think we classify people who engage in cross network token swapping as "normies". That's like classifying algorithmic day traders as an "average joe investor".
    - yibg 4y ago
      How many "normies" know what a cold wallet is?
      - scottiebarnes 4y ago
        How many "normies" know what an IP address is?
- dcolkitt 4y ago
  They’re not. The vast majority of early liquidity in this and most DeFi protocols is raised from institutions, VCs, and trading firms. This is especially the case for protocols like Nomad that don’t yet have a native token. They’ll get liquidity commitments through over-the-counter SAFT agreements that give the VCs a percent of the future tokens.
NaturalPhallacy 4y ago
>Challenge: explain to a normie that their life savings is gone forever because of a zero initialization vector. You mistook a currency for an investment opportunity, and gambled your life savings on one thing. Currencies have always and will always fluctuate against each other. Diversify your investments.
- onion2k 4y ago
  I don't think that helps. Saying "5% of your money is gone because a developer fucked up, and you have no recourse." isn't going to go down well with anyone.
  - NaturalPhallacy 4y ago
    I mean, saying "5% of your money is gone because a company in your index fund went bankrupt, and you have no recourse" is no different. And things happen like that all the time. It's why all normal financial investments come with very explicit upfront warnings that they're not guaranteed. The issue is treating a currency as an investment is just...foolhardy from the get got. Just don't do that. It's silly. People saw the value of it go up - or start to have any in the first place really - and saw a "get rich quick scheme" where there wasn't one. It was the brith of a digital currency, nothing more.
    - jollybean 4y ago
      This is not an answer. If a currency crashes, not only does that 'really matter' for most regular people who will have some material savings in that currency, it also creates really terrible problems for everyone using the currency. The value of a currency is in it's integrity over time. It doesn't have to maintain perfect pricing parity etc. however, it must not just vanish and fall apart. We can see this with USD and Seigneurage with the Petrollar. People hold USDs not because they think 'it'll be worth more' but rather, they'll be valuable in the future, because USA won't crash and fall apart. This crypto stuff is mostly stupidity with bad economics all the way down. Maybe some day that will change.

by efitz 4y ago

Reason #5734 why cryptocurrency is a non starter for real people. Challenge: explain to a normie that their life savings is gone forever because of a zero initialization vector.

gillesjacobs 4y ago

Challenge: explain to a normie that their life savings is gone forever because of mortgage backed derivatives.

happytoexplain 4y ago
Bad analogy. This explanation has actually been done pretty reasonably by a few people. Further than that - after such explanations, it's clear even to normal people who's to blame, whereas software and cryptography are much more esoteric in that department. Of course there is no justice in either case, but at least normal people can see who is most appropriate to behead in the case of the traditional financial catastrophes, in the purely theoretical revolution.
- rmbyrro 4y ago
  What a flex you pulled off!
  - happytoexplain 4y ago
    Doesn't that mean "brag"? I don't think I'm doing that.
davewritescode 4y ago
What a dumb retort If you got burned by mortgage backed derivatives and lost your life savings, it's ultimately because you were (knowingly or not) speculating on the value of real estate assets and making an assumption about future values of said assets. In the case of Nomad, it's that you put yourself at risk by using their service you could've lost everything you put in.
- nemothekid 4y ago
  >it's ultimately because you were (knowingly or not) speculating on the value of real estate assets [...] >it's ultimately because you were (knowingly or not) speculating on the value of crypto assets Not seeing how these are different
  - pwinnski 4y ago
    They're not. Just as "everyone" was saying that those particular real estate assets were incredibly risky, so too is "everyone" saying that all crypto assets are incredibly risky.
- rmbyrro 4y ago
  I'm sorry, but they were selling shitty sub-prime mortgages as AAA investments, my friend. They claimed high-risk mortgages would turn AAA by the magic of financial and statistical shenanigans. That's not far from "zero initialized vector" shenanigans. Investing in AAA securities is not speculation, by financial standards, by the way.
  - NaturalPhallacy 4y ago
    >Investing in AAA securities is not speculation, by financial standards, by the way. I would argue that it is now after seeing the bullshit the ratings agencies pulled during that fleecing of the world.
TomVDB 4y ago
The first challenge is to find those normies. Somebody who directly invested in MBS is by definition not a normie.
- dcolkitt 4y ago
  Somebody who directly invested the majority of their money in an experimental bridge protocol that raised its seed round 3 months ago is by definition not a normie.
  - function_seven 4y ago
    Which reinforces the top of this thread: "Reason #5734 why cryptocurrency is a non starter for real people."
    - obilgic 4y ago
      However cryptocurrency != "an experimental bridge protocol that raised its seed round 3 months ago"
      - hn_throwaway_99 4y ago
        The main point still stands. The crypto world sees "the code is the law" and non-repudiable/non-reversible transactions as a feature. The rest of the world (correctly in my view) sees it as a bug.
        woojoo666 4y ago
        That "main point" was never justified here. Commenters just assumed that a hack on an experimental bridge protocol reflected on crypto as a whole
  - ohgodplsno 4y ago
    No wall street banker was running around telling everyone how awesome MBSes are. However, morons spamming TikTok, Twitter, Facebook and every social network to find a sucker to invest in their super 20% profit moon monkey future currency can be found in a minute, reaching hundreds of thousands. Plenty of normies lose their money in this.
quickthrowman 4y ago
‘Normies’ didn’t lose all of their money selling credit default options and swaps on mortgage-backed bonds. They wouldn’t have access to the markets for those instruments or the capital to do so, and if they had access or capital, they weren’t a normie.
g8oz 4y ago
"The Big Short" did it pretty well.

scottiebarnes 4y ago

Why are "normies" keeping their life savings on platforms whose express purpose and utility is cross network token swapping?

arlcode 4y ago
Because their loved ones, or peers or Facebook advertisement told them it's safe and a good way to stick it to the man. Usually just depositing money in a bank doesn't get it stolen so the assumption isn't unreasonable. Even if it's only 0.25*life saving that's still devastating for most people.
- rmbyrro 4y ago
  Normies should not put 25% even on VC-backed startups, let alone anonymous crypto shenanigans
- scottiebarnes 4y ago
  I'm confused about why anyone is comparing the security of a defi token swapping platform to that of a fiat savings account. If you want an apple to apples comparison you should be comparing the security of a savings account to that of a cold wallet. Those are much more alike in their function. I don't think we classify people who engage in cross network token swapping as "normies". That's like classifying algorithmic day traders as an "average joe investor".
  - yibg 4y ago
    How many "normies" know what a cold wallet is?
    - scottiebarnes 4y ago
      How many "normies" know what an IP address is?
dcolkitt 4y ago
They’re not. The vast majority of early liquidity in this and most DeFi protocols is raised from institutions, VCs, and trading firms. This is especially the case for protocols like Nomad that don’t yet have a native token. They’ll get liquidity commitments through over-the-counter SAFT agreements that give the VCs a percent of the future tokens.

NaturalPhallacy 4y ago

>Challenge: explain to a normie that their life savings is gone forever because of a zero initialization vector. You mistook a currency for an investment opportunity, and gambled your life savings on one thing. Currencies have always and will always fluctuate against each other. Diversify your investments.

onion2k 4y ago
I don't think that helps. Saying "5% of your money is gone because a developer fucked up, and you have no recourse." isn't going to go down well with anyone.
- NaturalPhallacy 4y ago
  I mean, saying "5% of your money is gone because a company in your index fund went bankrupt, and you have no recourse" is no different. And things happen like that all the time. It's why all normal financial investments come with very explicit upfront warnings that they're not guaranteed. The issue is treating a currency as an investment is just...foolhardy from the get got. Just don't do that. It's silly. People saw the value of it go up - or start to have any in the first place really - and saw a "get rich quick scheme" where there wasn't one. It was the brith of a digital currency, nothing more.
  - jollybean 4y ago
    This is not an answer. If a currency crashes, not only does that 'really matter' for most regular people who will have some material savings in that currency, it also creates really terrible problems for everyone using the currency. The value of a currency is in it's integrity over time. It doesn't have to maintain perfect pricing parity etc. however, it must not just vanish and fall apart. We can see this with USD and Seigneurage with the Petrollar. People hold USDs not because they think 'it'll be worth more' but rather, they'll be valuable in the future, because USA won't crash and fall apart. This crypto stuff is mostly stupidity with bad economics all the way down. Maybe some day that will change.