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The gaslit asset class
- bix6 1y agoWell hot damn!
- Terr_ 1y ago> The fascinating thing about cryptocurrency technology is the number of ways people have developed and how much they are willing to pay to avoid actually using it. What other transformative technology has had people desperate not to use it? Regarding this juxtaposition between between advocacy that others buy-into the system versus, er, tactical-avoidance by advocates, I'll recycle a comment from earlier today: > [Some proponents say] "That's fixed with private blockchain", which is the equivalent of "That's fixed with Segways that have a second set of wheels and the self-balancing is disabled." > There's a bunch of people busy reinventing decades-old old tech/accounting, either because they never bothered to learn what was actually new about "blockchain", or because they can't bear to admit that the new stuff wasn't really good/necessary. > [...O]utside of wild-west cryptocurrency, [unrestricted node membership] usually isn't necessary, nor even desirable when you consider the rest of the cycle-burning baggage and complexity that comes with it. __________ > They are all either false or misleading. In most cases Nakamoto's own writings show he knew this. His acolytes were gaslighting. Quibble: Nah, that would be classical lying. "Gaslighting" is more specific and involves trying to make someone doubt your own sanity, memory, or senses.
- Ozzie_osman 1y agoI think there are a large group of techies who hold similar opinions and never really bought into the hype, but still sit and watch with amazement (and maybe envy) at how something that they believe is fundamentally flawed has passed the test of time and recovered through many boom-bust cycles.
- loeg 1y agoWhat boom-bust cycles have there been since 2009?
- maxbond 1y agoI assume you're asking because there has only been one major crash of the financial markets since 2008, but there have been numerous cycles local to cryptoassets (eg the NFT/web3 driven cycle several years ago). So, the answer is more or less "all of them," from dollar parity day to the latest all time highs.
- silisili 1y agoThat's me. If there's one thing I've learned about it, it's that we'll never get rich quick as over logical people. Of course Dropbox is dumb when rsync exists. Of course og Twitter was dumb when group sms existed. Of course Bitcoin is dumb because...(waves hands in all encompassing disbelief). Wrong every time. It doesn't pay to be the 'smartest guy in the room', as a figure of speech. It pays to be able to figure out how the everyman will act, no matter how much it pains you. And maybe those people who do are the real 'smartest people in the room.'
- Terr_ 1y agoSurvivorship bias is significant though, it's hard to notice—or even find and enumerate—all the people who may have lost money or given up earlier with a similar business/product. https://xkcd.com/1827/ https://xkcd.com/1827/
- dominicrose 1y agoExactly. History is written by the victors. I call them success stories (when they're not straight lies) but the word survivor is stronger and seems to indicate that the others don't survive. It's common knowledge that one shouldn't pay back a low-interest loan faster than is expected, because it's better to have liquidity or to invest. But it's real easy to look at the past and say "oh I could've invested in that". It's also very easy to look at success stories and forget that poverty is widespread and the poor don't talk about their misfortune. Video games are interesting because you can count how many times your character dies before you actually manage to finish the game.
- Ozzie_osman 1y agoI think there's a difference between Bitcoin and Dropbox/Twitter. Even if you were skeptical about the latter products at first, with the benefit of hindsight, it's easy to make a retroactive argument for why they made sense (better usability, better network effects, etc). But with Bitcoin, even with the benefit of hindsight, I still don't get it.
- 1y ago
- otterley 1y agoIt’s not because crypto is useful for the average person. It’s because demand for a place to safely store illicit assets is practically inexhaustible. Had I the foresight to realize that criminals would turn to it as an alternative to traditional forms of hoarding and money laundering, I would have invested in it ages ago.
- earnesti 1y agoIsn't the property that it keeps getting up pretty useful for the average person.
- procaryote 1y agoI saw that potential as obvious from day one. I just thought governments would care. Usually when someone sets up a money laundry ring, someone tries to stop it. My best idea, that probably gives governments too much credit, is that it's pretty useful to have a transparent record of illicit money flows, and that you can be OK with a bit of crime to get it.
- earnesti 1y agoGovernments do care, they have developed heavy regulatory frameworks for cryptocurrencies, such as MiCa in EU. I think central banks have been giving (negative) comments about Bitcoin since 2011 or so when it first gained modest publicity. Governments are huge and consists of many different institutions. I guess many would like to see Bitcoin stopped, but how to do that without fondling with the basic human rights, such as the right to free communication? So far the governments have been regulating it, trying to reduce the illicit use, which doesn't really stop it but actually makes it more legitimate.
- Scoundreller 1y agoGovernment sure killed egold and liberty reserve.
- spaceman_2020 1y agoBaffling that people make blanket statements like these without any real world experience of living in high inflation, poor countries. All the contractors I’ve hired from Philippines or Nigeria or Vietnam want to get paid in USD stablecoins because their currencies depreciate 5-15% against the dollar every year and stablecoins help them protect their capital Same for friends living in high inflation LatAm countries - crypto stablecoins are a way to escape rampant inflation
- deleted 1y ago[deleted]
- m463 1y agoI could never wrap my mind around the formation of the united states, over 200 years ago, based on people agreeing. There was basically no technology back then. Their "software" was the constitution.
- AndrewKemendo 1y agoThe Continental Congress was famously held in secret. A small number of wealthy aristocrats waged war on their home country without the consent of the people they were governing. I don’t remember the powhatan or Lenape (Virginia-MD-PA tribes that were exterminated in order to build the core of the US trade and political networks) being consulted on any of this. https://en.m.wikipedia.org/wiki/Powhatan https://en.m.wikipedia.org/wiki/Powhatan
- tomgp 1y agoI think the reason is that Bitcoin et al were sold as having practical uses but their ‘success’ has been as a vehicle for speculation. Though the two things are linked (hype for the former drives adoption for the latter) and it’s possible to both hold that crypto currencies are of no practical use and a great investment opportunity. (FWIW, with a long enough time span I believe neither of these is true) [edited to correct a couple of typos]
- tanh 1y agoI could always see how useful it is for criminal enterprise. That doesn't mean I want in. I wish I could avoid it altogether. Alas even stocks in my ETF holdings are proxies for some cryptocurrencies.
- fxtentacle 1y agoIt didn't take long before it became obvious that Bitcoin would revolutionize money laundering. I think this is more like the righteous vs. evil scale in D&D. Some people are OK with profiting off crime while others aren't. And techies are more likely to be on the righteous side, while bankers, traders, or CEOs are more likely to be on the psychopathic side. And if you look at how many times HSBC has been in the news for working closely with mafia, I'm not surprised that they're selling crypto ETFs now.
- buckle8017 1y agoFor such a well written and cited article you sadly seem to make a mistake all to common with Bitcoin. You assume Satoshi understood what he created. The very basis for Bitcoins security is that the real users of the system, the people who have the monetary power to not value it at anything are running nodes. If those people don't run nodes the rules of the system are just suggestions. Satoshi never had the chance to understand this before leaving since it's not an obvious property of the system.
- wmf 1y agoThis is an underappreciated point. Many people try to understand Bitcoin through Satoshi's writings but the street finds its own uses for things. The way Bitcoin is operated and used today isn't how Satoshi imagined. (And there's no evidence that building Satoshi's "original vision" would be successful either.)
- danielscrubs 1y agoWhy attack someone like Satoshi who can’t/won’t defend himself on based only on your own hunches?
- wmf 1y agoAs a historical figure, Satoshi is fair game for criticism.
- jaza 1y agoI reckon Satoshi understood quite well what he created. But what he quite possibly didn't understand as well, is how human behaviour would play out with his creation. He clearly believed that at least 51% of the node-grunt-power would be controlled by people who have good intentions - or at least by people in who's interest it is - to maintain the rules of the system. That has held up so far, but there's no guarantee it will always hold up.
- failuser 1y agoCrypto facilitates bypassing financial regulations, drug trade, evading taxes, extorting ransoms, breaking sanctions and so on. I’m not at all surprised it’s popular. I’m surprised that even relatively sane US admin did not crush it.
- divbzero 1y agoChina, on the other hand, did. [2017]: https://www.cnbc.com/2017/09/11/bitcoin-price-falls-on-reports-that-china-is-closing-local-exchanges.html https://www.cnbc.com/2017/09/11/bitcoin-price-falls-on-repor... "Bitcoin price falls again on reports that China is shutting down local exchanges" [2021]: https://www.cnbc.com/2021/06/22/china-crypto-crackdown-wipes-nearly-300-billion-off-market-btc-slides.html https://www.cnbc.com/2021/06/22/china-crypto-crackdown-wipes... "China’s renewed crypto crackdown wipes $400 billion off the market as bitcoin slides"
- dist-epoch 1y agoYou realize the irony of looking at those titles, and then at the present day price of bitcoin, which is 25x, 10x the price at the time of those articles.
- XorNot 1y agoIs that trade happening substantially in China and the Yuan?
- spaceman_2020 1y agoIf you are even remotely involved in crypto, you know how big crypto is in China. The biggest exchanges are Chinese or Chinese owned (Binance)
- toenail 1y agoMoney is used in crime, nothing surprising there, and the most popular money for crime is the USD.
- yieldcrv 1y agoThis is the level of discussion and nuance about cryptocurrency that I wish was more common on hackernews The discussion about the $460 billion bounty to take “lost” bitcoin in pre-quantum proof addresses and moved to post-quantum proof ones is worthy of many threads the quantum-scare in crypto is very unnuanced - even crypto proponents handwaive it away - when the reality explains the original confidence in this system: it adapts. Post quantum addresses will be fine And speaking of fine, the system is “good enough”. The decentralization is “good enough“, the development platform is “good enough”, the aggregate processing power of the execution environment doesn’t need to be more powerful than a $50 raspberry pi device as it’s “good enough” - you can use those nodes as microcontrollers in the cloud and there isn’t a similar offering and pricing strategy in non-distributed ledger cloud systems
- cyphertruck 1y agoI stopped when he flubbed the first point. No, it’s not correct users have to just hope big miners will mine their transactions. For two reasons: 1. They pay them. Do you trust “big grocery” will provide you food, or did you start a farm in your yard? 2. If that trust were ever broken, millions of bitcoiners who can easily afford to lose $10 a month can mine them. Despite there being no such censorship happening, these uneconomic miners are already a rapidly growing group. Bitcoiners are acutely aware of the state of the mempool.
- Youden 1y agoYour first point is addressed directly by the article. Your second point essentially requires a decentralized charity to exceed the size of an attacker, which isn't a realistic form of security.
- marcus_holmes 1y agoMaybe read the rest of the article (where those points are addressed) before commenting. And if I thought "big grocery" could make more money by not providing me food, I would definitely start growing my own food. It's got nothing to do with trust.
- pants2 1y agoThe author simultaneously claims that: 1. Crypto is a battleground where anything that can be exploited will be 2. Bitcoin is highly vulnerable to 51% attacks Something's not right here. For all the theoretical speculation about a 51% attack on Bitcoin, it's never happened, so maybe the system is working as designed. Bitcoin is relatively unchanged since 2009 by design, the author hardly mentions more modern consensus protocols like Ethereum's Proof of Stake + Slashing + LMD GHOST. Even in the most optimal scenarios the cost to attack Ethereum is astronomical.
- anon191928 1y ago[flagged]
- CraigJPerry 1y agomoney is a weird topic - i don't know of another topic where people will say "i don't know much about that" and at the same time have an inviolable attachment to ideas like barter came first (it didn't, debt came first). The other weird thing is attachment to models - and "schools of economic thought" more generally, when the monetary system operates under a system of legal constraints which describe exactly what is permitted to happen. We don't need macro economic models to describe the process by which banks lend money - we can literally just read the law, and what the law describes, is quite different from the theoretical models. The various schools of economic thought are remarkably uninterested in exploring the practical applications of banking. It's like programming computers to perform a task by speaking via an llm and pretending the generated code and the cpu architecture it runs on are unimportant. Let me give a concrete example, treasury bond issuance. You or i cannot buy bonds from the government, a subset of 30 approved banks can. They don't buy them in dollars, the buy them using reserves, a kind of money that we can't use. They legally MUST buy these, the idea that a government debt won't be covered by a bond is a technical impossibility (it's also technically unnecessary but that's a whole other kettle of fish). The auctions happen every couple of days roughly but to ensure the panel banks do buy them, the treasury buys back previous bonds from them to give them the reserves to buy the new issuance. If you've read this far you should instead now go to the fed and legislation.gov and read from an authoritative source, not from a random comment on the internet. And especially not from an economist - they'll tell you the government borrows from the public which is just a model to simplify a complex topic, the legislation is quite clear about what exactly is permitted and what a reverse repo is.
- mallowdram 1y agoIt's simply the arbitrary as a conduit metaphor to the real, nothing more. ie how debt appears to precede barter. Of course that's not proven, we have no Time Machine to the quaternary. That we develop ever more complex ways of generating value from arbitrary from schema is simply a function of the primate capacity for bias as status. The arbitrary suborns this as a metaphor.
- auggierose 1y agoI believe in a 1M qubit quantum computer when I see it.
- cwmoore 1y agoMoney means different things to different people. There are values that are always apparent and others. “We have inspired PageRank” is not money, it’s position. What values shall the next generation appreciate in us?
- seanieb 1y agoSome of his points overlap with Signal founder Moxie’s observations: > “I don’t think it’s on a trajectory to deliver us from centralized platforms, I don’t think it will fundamentally change our relationship to technology, and I think the privacy story is already below par for the internet (which is a pretty low bar!), but I also understand why nerds like me are excited to build for it.” https://moxie.org/2022/01/07/web3-first-impressions.html https://moxie.org/2022/01/07/web3-first-impressions.html
- jstanley 1y ago> Unlike most people discussing them, I am not "talking my book". Is another way of saying "I am not putting my money where my mouth is".
- 0xAFFFF 1y agoDon't make me tap the "Markets can stay irrational longer than you can stay solvent" sign.
- Ekaros 1y agoAlso with betting against crypto I always question who is the counterparty, where will the bet happen and if I win will I actually get paid?
- jstanley 1y agoEveryone always thinks they're right and the market is irrational. But taking the outside view, at least some of the people who think the market is irrational are actually just wrong and the market is right. And those are the people who will observe the market staying apparently-irrational the longest! Yeah, markets can stay irrational longer than you can stay solvent. But also you can stay wrong longer than you can stay solvent. And it's much easier to be personally wrong about something than for the market in aggregate to be wrong about something. So you have to expect that, most of the time, if you disagree with the market, you are in fact wrong.
- evadne 1y agoI remember engaging in extensive discussions with folks and at the end we just agreed that the purpose of this is number goes up.
- jstanley 1y ago> Bitcoin's ten-minute block time is a problem for real-world buying and selling In practice, the risk of suffering a double spend if you accept transactions with zero confirmations is less than the risk of chargebacks if you accept credit cards.
- athrowaway3z 1y agoSo i'm nodding along with most of this, but I don't understand how they can say something as strange and obviously nonsensical as this: >The incentive for it to happen suddenly is that, even if Nakamoto's fix were in place, someone with access to the first sufficiently powerful quantum computer could transfer 20% of all Bitcoin, currently worth $460B, to post-quantum wallets they controlled. This would be a 230x return on the investment in PsiQuantum. Thats some really bad accounting on the incentives and ROI available. You can't just start selling and expect the price to be stable. But it does bring up a secondary question I've never seen any numbers on; How much money could you possibly make if you knew for certain the value of bitcoin magically went to 1% in a panic sell? Are there any institutions open to selling a billion dollar put option?
- earnesti 1y agoAlso it is very likely that the advent of Quantum computing would be gradual. There exists bounty addresses, with ascending difficulty to crack. We would see the progress in steps, not suddenly. These quantum tinfoil scenarios just don't make sense.
- nairboon 1y agoSure, someone on CME will gladly sell you these options. That futures market has open bets with notional value of more than 10 billion usd. How much money you can make? Depends on how much capital you're willing to bet and the used leverage. https://www.cmegroup.com/markets/cryptocurrencies/bitcoin/bitcoin.contractSpecs.options.html https://www.cmegroup.com/markets/cryptocurrencies/bitcoin/bi...
- yieldcrv 1y agoThese fiat-default takes are uninspired Simply having possession of the bitcoin is valuable. You can borrow against, for other cryptos assets and for fiat. You can invest with it to someone else that also won’t sell it, either at all or all at once, you can obtain goods and services from people that wont sell it, and you can also sell it. Treasury companies are buying billions of BTC per week, for now.
- nullc 1y ago> Cynthia Dwork and Moni Naor IIRC Dwork and Naor's work had a trapdoor (which the server used to cheaply validate the challenges) and would be unsuitable for any kind of decentralized public system. It's not "proof of work" in the same sense, or arguably proof of work at all to anyone but the server and parties that trust them.
- futurecat 1y agoI'm sorry but this post is highly biased and serves as gaslighting in its own way, just for a different crowd. I don't know if it's deliberate or not, but it's very telling that it's on HN frontpage. There's no mention of: - The lightning network (bitcoin-native layer 2 enabling near-instant transaction speed) - Role of mining in grid stabilisation, methane reduction, etc. - How mining hardware is actually used by miners when cost of energy is nearly free. - Bitcoin's difficulty adjustment algorithm - Protocols like Cashu (Chaumian Cash based on Bitcoin) And one last thing. Mixing in a big bag "crypto" and "bitcoin" is in itself just a very bad take. sigh. As a side note, I highly recommend Lyn Alden's book Broken Money.
- sneak 1y agoThe “light” in “to gaslight” is a noun. Hence, the past participle is “gaslighted”.
- philippz 1y agoUff, reducing crypto as an asset class down to Bitcoin is "so 2005". Honestly, what's even the point here when doing so? Stable-Coins are the first crypto product with global product-market-fit and real economic impact. That's just to start with. Please take a look at Ethereum and adjacent tech (L2s, L3s).
- midmagico 1y agopfft, real neutral pov there
- akk0 1y agoThis is an interesting list of claims but it's hard to evaluate it as much more than that. I'm aware of several of these arguments and some of them are strong, others have merit but also have standard counter arguments that aren't mentioned here. A bunch of claims either sound implausible to my ear or I don't quite understand; there's a lot of links to research that is then distilled down to a single paragraph where it's hard to understand what exactly the claim is, whether it actually matches what the source says, and if course whether the source itself is strong. Then there's some claims that are just patently absurd like RSA-breaking quantum computers in 2027 . There's some good stuff in there but it's just a kind of a gish galloping polemic, it raises some interesting questions but it doesn't do much to sway my opinion on the macro level.
- RLAIF 1y ago[dead]
- midmagico 1y agoMost of the article is technically ill-informed; unfortunately, much of the logic, while sound if it were based on factual reality, fails in that sense. The gaslighting in this case is therefore inverted.
- Wood453 1y ago[flagged]