11 ms·

Crypto Fooled Us Once. It Will Fool Us Again

39 points by fortran77 3y ago

fortran77 3y ago
Michael Lewis' "Big Short" was a decent account, but after that he's gone mad, if he's simply not on the payroll of Big Crypto.
jqpabc123 3y ago
Crypto and NFTs are the ultimate scam. It's wooden nickels, the Brooklyn Bridge and Bernie Madoff all taken to their ultimate logical conclusion --- something with no intrinsic value whatsoever (electrons) is being exchanged for real functioning currency. But what really sets the crypto scam apart is the fact that no is really lying about the fundamental nature of the transaction. No one is hiding the fact that by buying crypto, you are exchanging your legal working currency for nothing more than an entry in a database with no real guarantees of any kind --- legal or otherwise. No one is hiding the fact that with only moderate technical skill, anyone can create a similar database and mint their own version of Bitcoin. All crypto really does is provide a quasi-viable excuse to entice people to lie to themselves about economic reality and what we call "money".
- TestingTest5 3y ago
  What's also incredible is the lack of government action on crypto. I mean, if something like crypto happened in the 60s, you can bet countries like the US would've banned "owning it" just like they did with gold.
  - JSavageOne 3y ago
    Much much easier to ban a physical item like gold than crypto. Trying to ban crypto is like trying to ban p2p file sharing, except with much more serious implications as it would also kill a country's presence and innovation in the industry.
- fastball 3y ago
  Solving double-spend in a distributed / decentralized system sounds like a guarantee to me?
  - hudon 3y ago
    It only seems to solve it in theory. However in a world of centralized mining where devs have high influence on how forks are treated, the double spend problem is still a problem. This is because what distinguishes forks can be their “validity”, not their proof-of-work, and fork validity is decided by humans and subject to politics and fraud.
    - AnthonyMouse 3y ago
      Value is always decided by humans. The question is, is it decided in a distributed way via general consensus, or in a centralized way that exposes you to the whims of unaccountable bureaucrats? Bitcoin devs can do whatever they want, except that there is no law putting them in charge so if they attempt to commit fraud they lose everyone's respect which was the only thing giving them any power, and they get replaced by someone else. Which they don't want, which keeps pressure on them to behave well.
      - hudon 3y ago
        Devs can commit fraud without anyone knowing is my point, actually. Picture a scenario like the 2013 Bitcoin fork but with a twist: a dev introduces a bug that allows a transaction to spend bitcoin without corresponding inputs, and triggers it while in the next block spending Bitcoin to buy a coffee, then after a few more blocks for confirmation, publicly announces the bug and the need to move off of the most-work chain. Miners and devs all agree that mining on top of the most-work chain with the bug doesn't make sense and move all the mining to a minority fork that has the bugfix. Minority fork overtakes the buggy fork. Malicious dev has his Bitcoin back and spends them a second time somewhere else. No one's the wiser. We can argue about the game theory and what exactly would happen if this was attempted today, but the point remains that double spend is possible and the Bitcoin white paper does not address this issue because it assumes Bitcoin code is set in stone. As soon as you consider that the protocol evolves and is subject to human manipulation, the white paper's guarantees all go out the window. This includes the 21 million bitcoin "limit".
- kouru225 3y ago
  Ngl having a shared global decentralized database that’s you can develop on sounds pretty nice to me. Definitely wouldn’t call that a scam. Maybe it’s overvalued though… As someone who’s dabbled in the art world, I think people underestimate how important provenance is to an art piece. Having a decentralized system that can automatically keep a paper trail and is seamlessly connected to an automated market/auction service is mind blowing for the art world. It’s basically automating two entire sub industries: the auction houses, and the appraisers. The NFTs don’t even need to stay digitally to be useful. The art world is experimenting a lot with printing these days, and the NFTs are just a method of being able to buy a print from the artist.
  - the_gastropod 3y ago
    At the end of the day, it’s a database still wholly dependent on the correctness of the data being inputted. The blockchain Rube Goldberg machine cannot solve for that physical to digital interface. A MS Access database with a checksum would be every bit as valid a solution to the problem you’ve outlined at a fraction of the complexity.
  - deleted 3y ago
    [deleted]
  - foobarian 3y ago
    > Maybe it’s overvalued though… I think the problems started when people started treating crypto currencies as investments instead of, well, currencies. I think the BTC jump from low 100s into 6 digits territory is probably what precipitated the craze, making a lot of people go berserk and spawned a whole cottage industry.
  - spaceman_2020 3y ago
    Forget the art world, I come from a country known for fradulent degrees, land records and academic certificates. Simply being able to certify them globally would be very useful.
- JSavageOne 3y ago
  How is it a scam if the people buying it know exactly what they're buying, and the code is all open source? The word "scam" implies someone is being misled. How is cryptocurrency any more of a scam than fiat currency, ie. digits in the computer of some private bank or central bank?
  - the_gastropod 3y ago
    Cryptocurrencies are scams in much the same way MLM schemes are scams. Everyone knows what they’re buying into. But their expectations of outcomes are greatly skewed by the vested interests of existing participants.
    - kylebenzle 3y ago
      No one with a brain or in a position of power has ever made a legitimate claim that Monero or Bitcoin Cash is a scam. Just empty attacks and idiots.
      - the_gastropod 3y ago
        Wow. Guess I’m out of my league here.
    - AnthonyMouse 3y ago
      MLM schemes are a scam because the premise is that you'll make money, but there is no creation of value and the increase in value just comes from the increase in users. Once you saturate the market, the last people to get in are left holding the bag. They lose their money so someone else could get it. Cryptocurrencies increase in value as more people use them, but they don't fall to zero as a result of becoming widespread, because their sole value isn't for speculation. They can also be used as a currency. Now, some of these valuations have built into them the assumption that their use as a currency will ultimately become widespread, because otherwise they would be worth a lot less than they are. But less isn't the same as zero, and volatility doesn't matter if you are using it as a currency because then you're not holding enough of it for a long enough period of time to be exposed to a major change in value. With a MLM scam the value doesn't just have volatility, when you run out of suckers the value crashes to zero forever. With cryptocurrency the speculators can lose their shirts and at the end of the day you can still buy Bitcoin with cash and then use it to pay for a VPN.
- rvz 3y ago
  The cat is out of the bag on this one. Can't be 100% stopped or shutdown. Many have tried stopping it for 15 years and unfortunately they are still wasting their time trying to do so.
  - coldbrewed 3y ago
    Crypto doesn't have to be explicitly stopped or shut down to be consigned to niche cases. In fifteen years Linux went from a hobbyist project in 1991 to a major infrastructure project underpinning the Internet; Golang started in 2009 and now is ubiquitous in the tech world. Plenty of analogous technologies exist that were created and flourished in fifteen years, and they did so by providing meaningful value without requiring universal adoption to become effective. In contrast the Bitcoin paper was released in 2008 and blockchain still hasn't found the killer app that people outside of the crypto ecosystem rely on in some serious capacity. Fifteen years in blockchain tech is still slow, risky, and painful to use; scams abound and there's a distinct lack of boring, practical use cases that make blockchains a safe technology to use as foundational infrastructure. What manifests as people trying to stop blockchains is typically regulatory bodies trying to stop money laundering or the sale of unregistered investments. This isn't some shadowy cabal trying to crush Bitcoin but institutions watching Celsius Network and FTX detonate and trying to catch up to keep people from getting burned. So yes, the blockchain cat is out of the bag, but nobody cares. We are squarely in "put up or shut up" territory because enough time has passed for the tech to develop; if blockchains never catch on then it's because the tech just wasn't that useful to begin with.
    - rvz 3y ago
      > In contrast the Bitcoin paper was released in 2008 and blockchain still hasn't found the killer app that people outside of the crypto ecosystem rely on in some serious capacity. Fifteen years in blockchain tech is still slow, risky, and painful to use; scams abound and there's a distinct lack of boring, practical use cases that make blockchains a safe technology to use as foundational infrastructure. There are more blockchains (not tokens) that exist beyond Bitcoin and are much faster and their use-case is worldwide, instant and extremely low-fee same-day payments. > What manifests as people trying to stop blockchains is typically regulatory bodies trying to stop money laundering or the sale of unregistered investments. This isn't some shadowy cabal trying to crush Bitcoin but institutions watching Celsius Network and FTX detonate and trying to catch up to keep people from getting burned. They already know they can't stop or ban it and these other blockchains, but they will go after the unregulated, non-conforming exchanges and have already introduced rules and regulations on the existing ones. But I'm afraid it isn't going away like it or not. > So yes, the blockchain cat is out of the bag, but nobody cares. Except, you seem to care enough to complain about it here and until the next time it gets talked about again, which is why you replied in the first place. > We are squarely in "put up or shut up" territory because enough time has passed for the tech to develop; if blockchains never catch on then it's because the tech just wasn't that useful to begin with. Of course it is no wonder why companies like PayPal, VISA, Moneygram, TransferGo, Stripe, Checkout.com, etc still continue to use it in their products.
- dig1 3y ago
  > No one is hiding the fact that by buying crypto, you are exchanging your legal working currency for nothing more than an entry in a database with no real guarantees of any kind --- legal or otherwise You just described the modern banking system. Yes, the government will give you guarantees for your stored funds to some extent, but when shit hits the fan, you are on your own (example 2008 financial crisis). > All crypto really does is provide a quasi-viable excuse to entice people to lie to themselves about economic reality and what we call "money". The same can be applied to the modern stock market. How many top players bring actual value, are sustainable, and can live more than 6 months without pumping stocks (and company valuation) through social media nonsense and other accounting tricks?
  - RandomLensman 3y ago
    In 2008, who lost deposits in the US? Can you explain how, for example, Apple or Exxon are just pumping their stock and what the accounting tricks are?
  - dragontamer 3y ago
    > You just described the modern banking system. Yes, the government will give you guarantees for your stored funds to some extent, but when shit hits the fan, you are on your own (example 2008 financial crisis). How much money did your savings account lose in 2008? Or your checking account?
    - nostrademons 3y ago
      Money market funds broke the buck in 2008: https://www.investopedia.com/articles/economics/09/money-market-reserve-fund-meltdown.asp https://www.investopedia.com/articles/economics/09/money-mar...
      - dmoy 3y ago
        Dude One money market fund, which was a tiny tiny percentage of overall money market funds, broke the buck by like 3% Also money market funds aren't insured (typically) Also, money market funds for sweep now have much stricter regulations to prevent even that from occurring again.
- spaceman_2020 3y ago
  The tech itself isn’t scam. A way to certify ownership is important if you’re going to build a future where work is borderless, digital, and copyright enforcement/royalty collection has to be automated. Scams get built on the tech, but that’s always been the case with any new tech. That said, crypto culture and the speculative energy it breeds definitely incentivized scams. The culture needs a massive overhaul
- nostrademons 3y ago
  Crypto only has an opening because all the other functioning currencies are actually just electrons with no intrinsic value whatsoever too.
  - kylebenzle 3y ago
    Exactly, the critics love to harp on about how "nothing backs Bitcoin!" I find that people that are not smart enough to understand Bitcoin generally respond by getting mad about Bitcoin or ignoring it.
- cjbgkagh 3y ago
  The fiat money system also operates on faith, but that faith is in the government so by your definition that's ok I guess. It seems that the modern left is adopting the government as their own. Personally, I trust the government about the same amount as I trust big companies, not at all. In my view the current fiat money system is a very old legalized scam around which there is quite a lot of academic contortion and opaque jargon to try to justify its existence - funded by those who benefit from it. Unwinding the scam would be political suicide as it would crush the perceived wealth of the populus. This is not to say that crypto isn't so infested with scams that they're now inseparable. I spread my trust around thinly across many countries, banks, and financial instruments with very little of it in crypto. My hopes is that crypto will mature and become boring but useful but do believe we're still a long way away from that.
  - bri3k 3y ago
    When I first heard the term 'fiat money system' I thought it was talking about bitcoin. The value exists because some crypto guy says it exists. That is the very definition of fiat. After when I was corrected that they were talking about real currency my first thought was oh, this is a grift. Only scammers try to reverse the meaning of words like this.
    - cjbgkagh 3y ago
      The term fiat currency predates crypto by a truly substantial amount of time, it describes an idea which is as old as currency. There is no reversal of meaning, fiat is from Latin ‘let it be done’ it’s value is by decree.
  - jqpabc123 3y ago
    The fiat money system also operates on faith, but that faith is in the government so by your definition that's ok I guess. Given a choice between the most stable government on the planet and the scam artists running crypto exchanges --- the choice is a no brainer. Personally, I trust the government about the same amount as I trust big companies, not at all. But you trust scam artists running crypto exchanges from undisclosed 3rd world locations? You're lying to yourself.
- panarky 3y ago
  > no intrinsic value > electrons > entry in a database The most fascinating phenomenon of crypto arguments is that they never change. Fifteen years ago you could find these same unintentionally ironic statements, where the most cutting criticisms of cryptocurrency are equally true of dollars and euros. The only thing missing from this thread (so far) is mysticism about the money supply and confident assertions that dollars are somehow "backed" by the military or tax payments.
  - jqpabc123 3y ago
    dollars are somehow "backed" by the military or tax payments. They are backed by law --- they are "legal tender". As such, I'm fairly confident I can pay next month's rent with them. Crypto is backed by --- absolutely nothing. Pretending you can't see the difference here is lying to yourself.
    - tim333 3y ago
      Comprare the value of say bitcoin and Venezuelan bolivars. The fact that the latter is "legal tender" has not helped it retain value much. And bitcoin is not backed by nothing. It's backed by a vast army of bitcoin promoters which you may not like but they are not nothing.
      - jqpabc123 3y ago
        False equivalence. I'm not Venezuelan, are you? The fact that an unstable "legal tender" exists somewhere doesn't make all others the same and it doesn't make crypto a better or more stable alternative. The fact that some people are promoting it for person gain doesn't either.
    - panarky 3y ago
      Seems like "backed by law" is just a synonym for the Latin "fiat", "let it be done", as in "the current regime decrees that this particular figment of our collective imagination is their preferred medium of exchange, which can, will, and always has changed throughout history to different socially constructed figments of the collective imagination". Not to say that it's dumb or silly to align yourself with the current regime, even though we all know that it will, sooner or later, be replaced by something else. Maybe that's next year, or maybe it won't happen in my children's lifetimes. But for me, I already have 95% of my life and wealth tightly coupled to the stability and durability of the current regime, and it doesn't seem completely mad to diversify a bit into something that might possibly have a chance of surviving a regime change, or could retain some value in the event the current regime decides to appropriate or restrict or sanction how I can spend or transfer wealth currently locked in their system. Perhaps twenty years ago it was unimaginable that the current regime could end, or transmute into an totalitarian hellscape, or even just continue with the appearance of liberal democracy but be undermined by authoritarians. If it's become easier to imagine scenarios like these in recent years, is it insane to want a 5% allocation to independent, uncorrelated, uncensorable assets to correspond to a 5% probability of previously unthinkable scenarios?
- gameshot911 3y ago
  Computer and phone screens are just "photons flashing around", and yet the information they represent is indisputably useful.
AraceliHarker 3y ago
Those who criticize SBF most harshly now are in the crypto industry. It is not impossible that, after SBF is completely expelled from the crypto industry, SBF's critics will engage in similar behavior.
- EA-3167 3y ago
  I think it's more that they're already engaging in that behavior, and hate SBF because he did it so openly and poorly. Nobody hates an incompetent scammer like a competent scammer.
ferfumarma 3y ago
Crypto does have utility, but there's only room for one: bitcoin. Everything else is just a me-too derivative that can add nothing except the possibility of central control (like the "digital dollar"). The ability to instantly transmit the hardest asset known to man (harder than gold, in the sense of inflation resistance) does have utility, regardless of what critics say. It has downsides too: the ability to be lost or stolen if custody is sloppy, energy use, and many others. But the balance between its utility and its limitations is something that enough holders recognize that it maintains a value above $26k for now. The US debt recently increased by the entire market cap of bitcoin ($275 billion [1]) in a single day. That doesn't guarantee anything, but in the old days when the global reserve currency started to become frankly inflationary, there was no easy recourse - you could only jump to the next best national fiat (which could have the same problems or worse), or gold (with all of its limitations). Now, due to bitcoin, an alternative exists. People on HN are smarter than me, and they all seem to hate bitcoin with passion, but I haven't yet understood why. I think it might be harder to recognize its value when it's part of your implicit cultural background: the dollar is money. We lack the perspective of our great grandparents, who lived through the great depression, and understand that the dollar has no intrinsic value, either. Once that epiphany is reached by the masses, the appreciation in bitcoin value could come quickly. [1] https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2Fwhwnv46y66sb1.jpg https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2Fw...
- dukeyukey 3y ago
  > People on HN are smarter than me, and they all seem to hate bitcoin with passion, but I haven't yet understood why "Hate" is a strong word, but I dislike Bitcoin because so much of its value doesn't come from utility, but from speculation. People rarely buy Bitcoin to actually use it, but instead because they hope/expect the price will go up. And that's what leads to cases like SBF. > and understand that the dollar has no intrinsic value, either. You need US dollars to pay US taxes and buy/sell into the world's largest consumer market. That's why there's a strong demand for dollars.
  - krupan 3y ago
    People are speculating on Bitcoin for different reasons, but many of us are doing so because we have examined it closely and seen it's utility. It is still very early in the adoption phase and so it's hard to see the utility in practice right now, but as you learn more about our current financial system and how Bitcoin works, the potential of Bitcoin is pretty astounding.
tpetry 3y ago
The article is missing a point. The author says he underestimated the impact on crypto. But he was completely right - after so many years crypto and the blockchain didn't really find its place. But he underestimated the get-rich-quick mentality. That's what made crypto big. Everyone wanted to be a part of it. And naturally, this type of mentality is filled with fraudsters.
sigmar 3y ago
>Then we get to claims about events that happened in the real world. Here, you would hope Lewis asks himself the question, “Are the characters making these claims reliable narrators?” But his book is not interested in that question, which gets relegated to a footnote and is answered with a Meh, I believe him. I'm like 80% through the book and am enjoying it. Feel like I've definitely gained a better understanding of who SBF was with the pre-FTX context. But I 100% agree with the quote above and it almost reads like an autobiography.
KasianFranks 3y ago
The days of the tired overblown mantra among certain software engineering camps, many of which are funded by public capital markets, continuing to beat the drum of "all crypto is a scam" are over. Having an understanding and appreciation of how public capital markets work is key. Not many have this understanding and appreciation. The capital markets were designed to enable a company to raise capital aka funding. Crypto now represents a truly global capital marketplace accessible to all, not just to accredited investors in the US. Bottom line. Key points to remember: 1. Crypto is not a currency, it's a trading vehicle similar to a stock, junk bond, debenture, options or futures contract. 2. Regulated security tokens/crypto that represent equity ownership in a company with real products and with real revenue generating capability is the future of crypto. It's important to realize the advantage of a truly global capital marketplace represented by regulated security tokens connected to the equity of a company/startup which provide a company/startup the ability to raise funding, create jobs, get salaries paid, fund operations in science and techology in any indusrty which provide a return on investment capital (ROIC) to stakeholders and shareholders at the same time.
krupan 3y ago
I wish we could stop saying crypto here and just say, fraud, or ponzi, or get rich quick schemes. Crypto was the marketing term used this time around, but it's been other things in the past and there will be new ones in the future.
yieldcrv 3y ago
> Alameda was the one firm in the world that was capable of convincing a regional Japanese bank to ignore the Financial Services Agency, even though Japan’s banking regulator had told banks to be maximally skeptical When I was in Japan I saw this too, basically the nearest crypto grifter with the right unrelated pedigree convinces people that derive clout in this antiquated way. It makes me sad that “never crypto” gatekeepers eventually run into the nearest one who just happens to be shilling anything random. The whole point of crypto is that you don't need to gauge utility off of pedigree, you can gauge it on your own and reach an independent understanding that’s corroborated by all the other participants in the network, which includes walking away and being disinterested. There needs to be broad education on this stuff and what a properly managed crypto servicing organization looks like. Primarily because these are concepts that don't go away with any regulatory change, its as simple as 2 computers or nodes communicating with each other so it never goes away.
linesinthesand 3y ago
Who's 'us'? Crypto sure did not fool me
fortran77 3y ago
This was flagged not because it was an intresting, relevant review contrasting two books, but because zealots here don't like Bari Weiss, publisher of very mainstream "The Free Press."
tim333 3y ago
There's quite an entertaining (and sometimes shocking) discussion with the author of Number Go Up about the book https://youtu.be/THdU00jutvo https://youtu.be/THdU00jutvo (Zeke Faux Interview with Patrick Boyle) I'm not sure I buy the thesis of Patrick's article "Crypto Fooled Us Once" on the basis FTX collapsed when SBF stole the clients money. Crypto goes on fine, Kraken, Coinbase and a hundred other exchanges still do business. One crooked exchange less has not put crypto and fooling into the past.
deleted 3y ago
[deleted]
friend_and_foe 3y ago
Once? There has been a wave of exchange collapses following every single bull market to date. Mt Gox was the first. Yes, it will fool you again. Only if you're a fool.

39 points by fortran77 3y ago

Michael Lewis' "Big Short" was a decent account, but after that he's gone mad, if he's simply not on the payroll of Big Crypto.

jqpabc123 3y ago

Crypto and NFTs are the ultimate scam. It's wooden nickels, the Brooklyn Bridge and Bernie Madoff all taken to their ultimate logical conclusion --- something with no intrinsic value whatsoever (electrons) is being exchanged for real functioning currency. But what really sets the crypto scam apart is the fact that no is really lying about the fundamental nature of the transaction. No one is hiding the fact that by buying crypto, you are exchanging your legal working currency for nothing more than an entry in a database with no real guarantees of any kind --- legal or otherwise. No one is hiding the fact that with only moderate technical skill, anyone can create a similar database and mint their own version of Bitcoin. All crypto really does is provide a quasi-viable excuse to entice people to lie to themselves about economic reality and what we call "money".

TestingTest5 3y ago
What's also incredible is the lack of government action on crypto. I mean, if something like crypto happened in the 60s, you can bet countries like the US would've banned "owning it" just like they did with gold.
- JSavageOne 3y ago
  Much much easier to ban a physical item like gold than crypto. Trying to ban crypto is like trying to ban p2p file sharing, except with much more serious implications as it would also kill a country's presence and innovation in the industry.
fastball 3y ago
Solving double-spend in a distributed / decentralized system sounds like a guarantee to me?
- hudon 3y ago
  It only seems to solve it in theory. However in a world of centralized mining where devs have high influence on how forks are treated, the double spend problem is still a problem. This is because what distinguishes forks can be their “validity”, not their proof-of-work, and fork validity is decided by humans and subject to politics and fraud.
  - AnthonyMouse 3y ago
    Value is always decided by humans. The question is, is it decided in a distributed way via general consensus, or in a centralized way that exposes you to the whims of unaccountable bureaucrats? Bitcoin devs can do whatever they want, except that there is no law putting them in charge so if they attempt to commit fraud they lose everyone's respect which was the only thing giving them any power, and they get replaced by someone else. Which they don't want, which keeps pressure on them to behave well.
    - hudon 3y ago
      Devs can commit fraud without anyone knowing is my point, actually. Picture a scenario like the 2013 Bitcoin fork but with a twist: a dev introduces a bug that allows a transaction to spend bitcoin without corresponding inputs, and triggers it while in the next block spending Bitcoin to buy a coffee, then after a few more blocks for confirmation, publicly announces the bug and the need to move off of the most-work chain. Miners and devs all agree that mining on top of the most-work chain with the bug doesn't make sense and move all the mining to a minority fork that has the bugfix. Minority fork overtakes the buggy fork. Malicious dev has his Bitcoin back and spends them a second time somewhere else. No one's the wiser. We can argue about the game theory and what exactly would happen if this was attempted today, but the point remains that double spend is possible and the Bitcoin white paper does not address this issue because it assumes Bitcoin code is set in stone. As soon as you consider that the protocol evolves and is subject to human manipulation, the white paper's guarantees all go out the window. This includes the 21 million bitcoin "limit".
kouru225 3y ago
Ngl having a shared global decentralized database that’s you can develop on sounds pretty nice to me. Definitely wouldn’t call that a scam. Maybe it’s overvalued though… As someone who’s dabbled in the art world, I think people underestimate how important provenance is to an art piece. Having a decentralized system that can automatically keep a paper trail and is seamlessly connected to an automated market/auction service is mind blowing for the art world. It’s basically automating two entire sub industries: the auction houses, and the appraisers. The NFTs don’t even need to stay digitally to be useful. The art world is experimenting a lot with printing these days, and the NFTs are just a method of being able to buy a print from the artist.
- the_gastropod 3y ago
  At the end of the day, it’s a database still wholly dependent on the correctness of the data being inputted. The blockchain Rube Goldberg machine cannot solve for that physical to digital interface. A MS Access database with a checksum would be every bit as valid a solution to the problem you’ve outlined at a fraction of the complexity.
- deleted 3y ago
  [deleted]
- foobarian 3y ago
  > Maybe it’s overvalued though… I think the problems started when people started treating crypto currencies as investments instead of, well, currencies. I think the BTC jump from low 100s into 6 digits territory is probably what precipitated the craze, making a lot of people go berserk and spawned a whole cottage industry.
- spaceman_2020 3y ago
  Forget the art world, I come from a country known for fradulent degrees, land records and academic certificates. Simply being able to certify them globally would be very useful.
JSavageOne 3y ago
How is it a scam if the people buying it know exactly what they're buying, and the code is all open source? The word "scam" implies someone is being misled. How is cryptocurrency any more of a scam than fiat currency, ie. digits in the computer of some private bank or central bank?
- the_gastropod 3y ago
  Cryptocurrencies are scams in much the same way MLM schemes are scams. Everyone knows what they’re buying into. But their expectations of outcomes are greatly skewed by the vested interests of existing participants.
  - kylebenzle 3y ago
    No one with a brain or in a position of power has ever made a legitimate claim that Monero or Bitcoin Cash is a scam. Just empty attacks and idiots.
    - the_gastropod 3y ago
      Wow. Guess I’m out of my league here.
  - AnthonyMouse 3y ago
    MLM schemes are a scam because the premise is that you'll make money, but there is no creation of value and the increase in value just comes from the increase in users. Once you saturate the market, the last people to get in are left holding the bag. They lose their money so someone else could get it. Cryptocurrencies increase in value as more people use them, but they don't fall to zero as a result of becoming widespread, because their sole value isn't for speculation. They can also be used as a currency. Now, some of these valuations have built into them the assumption that their use as a currency will ultimately become widespread, because otherwise they would be worth a lot less than they are. But less isn't the same as zero, and volatility doesn't matter if you are using it as a currency because then you're not holding enough of it for a long enough period of time to be exposed to a major change in value. With a MLM scam the value doesn't just have volatility, when you run out of suckers the value crashes to zero forever. With cryptocurrency the speculators can lose their shirts and at the end of the day you can still buy Bitcoin with cash and then use it to pay for a VPN.
rvz 3y ago
The cat is out of the bag on this one. Can't be 100% stopped or shutdown. Many have tried stopping it for 15 years and unfortunately they are still wasting their time trying to do so.
- coldbrewed 3y ago
  Crypto doesn't have to be explicitly stopped or shut down to be consigned to niche cases. In fifteen years Linux went from a hobbyist project in 1991 to a major infrastructure project underpinning the Internet; Golang started in 2009 and now is ubiquitous in the tech world. Plenty of analogous technologies exist that were created and flourished in fifteen years, and they did so by providing meaningful value without requiring universal adoption to become effective. In contrast the Bitcoin paper was released in 2008 and blockchain still hasn't found the killer app that people outside of the crypto ecosystem rely on in some serious capacity. Fifteen years in blockchain tech is still slow, risky, and painful to use; scams abound and there's a distinct lack of boring, practical use cases that make blockchains a safe technology to use as foundational infrastructure. What manifests as people trying to stop blockchains is typically regulatory bodies trying to stop money laundering or the sale of unregistered investments. This isn't some shadowy cabal trying to crush Bitcoin but institutions watching Celsius Network and FTX detonate and trying to catch up to keep people from getting burned. So yes, the blockchain cat is out of the bag, but nobody cares. We are squarely in "put up or shut up" territory because enough time has passed for the tech to develop; if blockchains never catch on then it's because the tech just wasn't that useful to begin with.
  - rvz 3y ago
    > In contrast the Bitcoin paper was released in 2008 and blockchain still hasn't found the killer app that people outside of the crypto ecosystem rely on in some serious capacity. Fifteen years in blockchain tech is still slow, risky, and painful to use; scams abound and there's a distinct lack of boring, practical use cases that make blockchains a safe technology to use as foundational infrastructure. There are more blockchains (not tokens) that exist beyond Bitcoin and are much faster and their use-case is worldwide, instant and extremely low-fee same-day payments. > What manifests as people trying to stop blockchains is typically regulatory bodies trying to stop money laundering or the sale of unregistered investments. This isn't some shadowy cabal trying to crush Bitcoin but institutions watching Celsius Network and FTX detonate and trying to catch up to keep people from getting burned. They already know they can't stop or ban it and these other blockchains, but they will go after the unregulated, non-conforming exchanges and have already introduced rules and regulations on the existing ones. But I'm afraid it isn't going away like it or not. > So yes, the blockchain cat is out of the bag, but nobody cares. Except, you seem to care enough to complain about it here and until the next time it gets talked about again, which is why you replied in the first place. > We are squarely in "put up or shut up" territory because enough time has passed for the tech to develop; if blockchains never catch on then it's because the tech just wasn't that useful to begin with. Of course it is no wonder why companies like PayPal, VISA, Moneygram, TransferGo, Stripe, Checkout.com, etc still continue to use it in their products.
dig1 3y ago
> No one is hiding the fact that by buying crypto, you are exchanging your legal working currency for nothing more than an entry in a database with no real guarantees of any kind --- legal or otherwise You just described the modern banking system. Yes, the government will give you guarantees for your stored funds to some extent, but when shit hits the fan, you are on your own (example 2008 financial crisis). > All crypto really does is provide a quasi-viable excuse to entice people to lie to themselves about economic reality and what we call "money". The same can be applied to the modern stock market. How many top players bring actual value, are sustainable, and can live more than 6 months without pumping stocks (and company valuation) through social media nonsense and other accounting tricks?
- RandomLensman 3y ago
  In 2008, who lost deposits in the US? Can you explain how, for example, Apple or Exxon are just pumping their stock and what the accounting tricks are?
- dragontamer 3y ago
  > You just described the modern banking system. Yes, the government will give you guarantees for your stored funds to some extent, but when shit hits the fan, you are on your own (example 2008 financial crisis). How much money did your savings account lose in 2008? Or your checking account?
  - nostrademons 3y ago
    Money market funds broke the buck in 2008: https://www.investopedia.com/articles/economics/09/money-market-reserve-fund-meltdown.asp https://www.investopedia.com/articles/economics/09/money-mar...
    - dmoy 3y ago
      Dude One money market fund, which was a tiny tiny percentage of overall money market funds, broke the buck by like 3% Also money market funds aren't insured (typically) Also, money market funds for sweep now have much stricter regulations to prevent even that from occurring again.
spaceman_2020 3y ago
The tech itself isn’t scam. A way to certify ownership is important if you’re going to build a future where work is borderless, digital, and copyright enforcement/royalty collection has to be automated. Scams get built on the tech, but that’s always been the case with any new tech. That said, crypto culture and the speculative energy it breeds definitely incentivized scams. The culture needs a massive overhaul
nostrademons 3y ago
Crypto only has an opening because all the other functioning currencies are actually just electrons with no intrinsic value whatsoever too.
- kylebenzle 3y ago
  Exactly, the critics love to harp on about how "nothing backs Bitcoin!" I find that people that are not smart enough to understand Bitcoin generally respond by getting mad about Bitcoin or ignoring it.
cjbgkagh 3y ago
The fiat money system also operates on faith, but that faith is in the government so by your definition that's ok I guess. It seems that the modern left is adopting the government as their own. Personally, I trust the government about the same amount as I trust big companies, not at all. In my view the current fiat money system is a very old legalized scam around which there is quite a lot of academic contortion and opaque jargon to try to justify its existence - funded by those who benefit from it. Unwinding the scam would be political suicide as it would crush the perceived wealth of the populus. This is not to say that crypto isn't so infested with scams that they're now inseparable. I spread my trust around thinly across many countries, banks, and financial instruments with very little of it in crypto. My hopes is that crypto will mature and become boring but useful but do believe we're still a long way away from that.
- bri3k 3y ago
  When I first heard the term 'fiat money system' I thought it was talking about bitcoin. The value exists because some crypto guy says it exists. That is the very definition of fiat. After when I was corrected that they were talking about real currency my first thought was oh, this is a grift. Only scammers try to reverse the meaning of words like this.
  - cjbgkagh 3y ago
    The term fiat currency predates crypto by a truly substantial amount of time, it describes an idea which is as old as currency. There is no reversal of meaning, fiat is from Latin ‘let it be done’ it’s value is by decree.
- jqpabc123 3y ago
  The fiat money system also operates on faith, but that faith is in the government so by your definition that's ok I guess. Given a choice between the most stable government on the planet and the scam artists running crypto exchanges --- the choice is a no brainer. Personally, I trust the government about the same amount as I trust big companies, not at all. But you trust scam artists running crypto exchanges from undisclosed 3rd world locations? You're lying to yourself.
panarky 3y ago
> no intrinsic value > electrons > entry in a database The most fascinating phenomenon of crypto arguments is that they never change. Fifteen years ago you could find these same unintentionally ironic statements, where the most cutting criticisms of cryptocurrency are equally true of dollars and euros. The only thing missing from this thread (so far) is mysticism about the money supply and confident assertions that dollars are somehow "backed" by the military or tax payments.
- jqpabc123 3y ago
  dollars are somehow "backed" by the military or tax payments. They are backed by law --- they are "legal tender". As such, I'm fairly confident I can pay next month's rent with them. Crypto is backed by --- absolutely nothing. Pretending you can't see the difference here is lying to yourself.
  - tim333 3y ago
    Comprare the value of say bitcoin and Venezuelan bolivars. The fact that the latter is "legal tender" has not helped it retain value much. And bitcoin is not backed by nothing. It's backed by a vast army of bitcoin promoters which you may not like but they are not nothing.
    - jqpabc123 3y ago
      False equivalence. I'm not Venezuelan, are you? The fact that an unstable "legal tender" exists somewhere doesn't make all others the same and it doesn't make crypto a better or more stable alternative. The fact that some people are promoting it for person gain doesn't either.
  - panarky 3y ago
    Seems like "backed by law" is just a synonym for the Latin "fiat", "let it be done", as in "the current regime decrees that this particular figment of our collective imagination is their preferred medium of exchange, which can, will, and always has changed throughout history to different socially constructed figments of the collective imagination". Not to say that it's dumb or silly to align yourself with the current regime, even though we all know that it will, sooner or later, be replaced by something else. Maybe that's next year, or maybe it won't happen in my children's lifetimes. But for me, I already have 95% of my life and wealth tightly coupled to the stability and durability of the current regime, and it doesn't seem completely mad to diversify a bit into something that might possibly have a chance of surviving a regime change, or could retain some value in the event the current regime decides to appropriate or restrict or sanction how I can spend or transfer wealth currently locked in their system. Perhaps twenty years ago it was unimaginable that the current regime could end, or transmute into an totalitarian hellscape, or even just continue with the appearance of liberal democracy but be undermined by authoritarians. If it's become easier to imagine scenarios like these in recent years, is it insane to want a 5% allocation to independent, uncorrelated, uncensorable assets to correspond to a 5% probability of previously unthinkable scenarios?
gameshot911 3y ago
Computer and phone screens are just "photons flashing around", and yet the information they represent is indisputably useful.

AraceliHarker 3y ago

Those who criticize SBF most harshly now are in the crypto industry. It is not impossible that, after SBF is completely expelled from the crypto industry, SBF's critics will engage in similar behavior.

EA-3167 3y ago
I think it's more that they're already engaging in that behavior, and hate SBF because he did it so openly and poorly. Nobody hates an incompetent scammer like a competent scammer.

ferfumarma 3y ago

Crypto does have utility, but there's only room for one: bitcoin. Everything else is just a me-too derivative that can add nothing except the possibility of central control (like the "digital dollar"). The ability to instantly transmit the hardest asset known to man (harder than gold, in the sense of inflation resistance) does have utility, regardless of what critics say. It has downsides too: the ability to be lost or stolen if custody is sloppy, energy use, and many others. But the balance between its utility and its limitations is something that enough holders recognize that it maintains a value above $26k for now. The US debt recently increased by the entire market cap of bitcoin ($275 billion [1]) in a single day. That doesn't guarantee anything, but in the old days when the global reserve currency started to become frankly inflationary, there was no easy recourse - you could only jump to the next best national fiat (which could have the same problems or worse), or gold (with all of its limitations). Now, due to bitcoin, an alternative exists. People on HN are smarter than me, and they all seem to hate bitcoin with passion, but I haven't yet understood why. I think it might be harder to recognize its value when it's part of your implicit cultural background: the dollar is money. We lack the perspective of our great grandparents, who lived through the great depression, and understand that the dollar has no intrinsic value, either. Once that epiphany is reached by the masses, the appreciation in bitcoin value could come quickly. [1] https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2Fwhwnv46y66sb1.jpg https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2Fw...

dukeyukey 3y ago
> People on HN are smarter than me, and they all seem to hate bitcoin with passion, but I haven't yet understood why "Hate" is a strong word, but I dislike Bitcoin because so much of its value doesn't come from utility, but from speculation. People rarely buy Bitcoin to actually use it, but instead because they hope/expect the price will go up. And that's what leads to cases like SBF. > and understand that the dollar has no intrinsic value, either. You need US dollars to pay US taxes and buy/sell into the world's largest consumer market. That's why there's a strong demand for dollars.
- krupan 3y ago
  People are speculating on Bitcoin for different reasons, but many of us are doing so because we have examined it closely and seen it's utility. It is still very early in the adoption phase and so it's hard to see the utility in practice right now, but as you learn more about our current financial system and how Bitcoin works, the potential of Bitcoin is pretty astounding.

tpetry 3y ago

The article is missing a point. The author says he underestimated the impact on crypto. But he was completely right - after so many years crypto and the blockchain didn't really find its place. But he underestimated the get-rich-quick mentality. That's what made crypto big. Everyone wanted to be a part of it. And naturally, this type of mentality is filled with fraudsters.

sigmar 3y ago

>Then we get to claims about events that happened in the real world. Here, you would hope Lewis asks himself the question, “Are the characters making these claims reliable narrators?” But his book is not interested in that question, which gets relegated to a footnote and is answered with a Meh, I believe him. I'm like 80% through the book and am enjoying it. Feel like I've definitely gained a better understanding of who SBF was with the pre-FTX context. But I 100% agree with the quote above and it almost reads like an autobiography.

KasianFranks 3y ago

The days of the tired overblown mantra among certain software engineering camps, many of which are funded by public capital markets, continuing to beat the drum of "all crypto is a scam" are over. Having an understanding and appreciation of how public capital markets work is key. Not many have this understanding and appreciation. The capital markets were designed to enable a company to raise capital aka funding. Crypto now represents a truly global capital marketplace accessible to all, not just to accredited investors in the US. Bottom line. Key points to remember: 1. Crypto is not a currency, it's a trading vehicle similar to a stock, junk bond, debenture, options or futures contract. 2. Regulated security tokens/crypto that represent equity ownership in a company with real products and with real revenue generating capability is the future of crypto. It's important to realize the advantage of a truly global capital marketplace represented by regulated security tokens connected to the equity of a company/startup which provide a company/startup the ability to raise funding, create jobs, get salaries paid, fund operations in science and techology in any indusrty which provide a return on investment capital (ROIC) to stakeholders and shareholders at the same time.

krupan 3y ago

I wish we could stop saying crypto here and just say, fraud, or ponzi, or get rich quick schemes. Crypto was the marketing term used this time around, but it's been other things in the past and there will be new ones in the future.

yieldcrv 3y ago

> Alameda was the one firm in the world that was capable of convincing a regional Japanese bank to ignore the Financial Services Agency, even though Japan’s banking regulator had told banks to be maximally skeptical When I was in Japan I saw this too, basically the nearest crypto grifter with the right unrelated pedigree convinces people that derive clout in this antiquated way. It makes me sad that “never crypto” gatekeepers eventually run into the nearest one who just happens to be shilling anything random. The whole point of crypto is that you don't need to gauge utility off of pedigree, you can gauge it on your own and reach an independent understanding that’s corroborated by all the other participants in the network, which includes walking away and being disinterested. There needs to be broad education on this stuff and what a properly managed crypto servicing organization looks like. Primarily because these are concepts that don't go away with any regulatory change, its as simple as 2 computers or nodes communicating with each other so it never goes away.

linesinthesand 3y ago

Who's 'us'? Crypto sure did not fool me

fortran77 3y ago

This was flagged not because it was an intresting, relevant review contrasting two books, but because zealots here don't like Bari Weiss, publisher of very mainstream "The Free Press."

tim333 3y ago

There's quite an entertaining (and sometimes shocking) discussion with the author of Number Go Up about the book https://youtu.be/THdU00jutvo https://youtu.be/THdU00jutvo (Zeke Faux Interview with Patrick Boyle) I'm not sure I buy the thesis of Patrick's article "Crypto Fooled Us Once" on the basis FTX collapsed when SBF stole the clients money. Crypto goes on fine, Kraken, Coinbase and a hundred other exchanges still do business. One crooked exchange less has not put crypto and fooling into the past.

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friend_and_foe 3y ago

Once? There has been a wave of exchange collapses following every single bull market to date. Mt Gox was the first. Yes, it will fool you again. Only if you're a fool.