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The Non-Innovation of Cryptocurrency

stephendiehl.com

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Re: The Non-Innovation of Cryptocurrency

#21

Post by neilwilson »

"There are indeed a lot of fools in this world, but to presume an infinite chain of them as the core of an investment thesis is beyond absurd."

It's worked for gold and diamonds for generations. Not to mention pretty much every artwork or other concoction human beings create and then collect.

There's not a lot of cash flow from first edition Marvel comics, but there are an awful lot of them stored in plastic bags.

Humans collect and value all sorts of stuff for no good reason. Cryptocurrency is no different.

It becomes even less of an issue when you realise that we all create 'currency' all the time. It's just an embodiment of a promise to do something in the future. Far more of a unit of account than a thing.

The trick is getting other people to accept your currency. Which is a lot easier when you can impose coercive charges on people denominated in that currency - whether that is a tax, or a tithe.

Re: The Non-Innovation of Cryptocurrency

#22

Post by mdoms »

mattdesl wrote: post #18
mdoms wrote: post #12

Earlier quoted context omitted.

> Blockchains and crypto tech does seem to provide solutions to many challenging problems: distributed ledgers, immutable and decentralized data, ownerless contracts and program execution, secure and decentralized ownership of a digital asset None of these are real problems. Each and every one was invented as a problem as a post hoc rationalisation for Blockchain technologies.

The same could be said for many problems in computer science and on the web: these were not problems humans were trying to solve before computers. Blockchains give us new paradigms (such as ownerless & distributed program execution) that most of us weren’t thinking about before it was achievable.

And what has that given us, tangibly?

Re: The Non-Innovation of Cryptocurrency

#23

Post by qeternity »

redpiller wrote: post #8
faeyanpiraat wrote: post #4

Earlier quoted context omitted.

Are you sure about that? How did you arrive at the conclusion that it is undeniably a value-add?

We came up with a way to allow investors to independently verify how much profit a business makes with certainty without having to trust company directors or accountants. Clearly this is a value-add for new/small companies which don't yet have a reputation as it reduces risk for the investor. It's also a value-add for investors of big companies as it prevents them from being mislead about quarterly profits. In our sp…

> We use the token as the primary store of value for the profits of the underlying economic activity.

Wonderful, so when the proprietor starts embezzling from the real-world operations, I’m sure you have that sorted out. Just sprinkle some blockchain on it.

Your comment seems well meaning, but you do not seem to understand the real issues with due diligence. Source: ran US equity book for large hedge fund

Re: The Non-Innovation of Cryptocurrency

#24

Post by yunohn »

tromp wrote: post #5

> no purpose other than to enrich the owners of the various casino fiefdoms who issue those tokens That can be argued for coins with premines (such as all PoS coins), but PoW coins with no premine or instamine or dev tax, where all coins go to miners, offer no financial reward to the coin creators. Such coins are rather rare though. And ones that do not handicap later miners relative to early miners even rarer.

> where all coins go to miners, offer no financial reward to the coin creators. Such coins are rather rare though

Seems like that’s exactly the problem.

Re: The Non-Innovation of Cryptocurrency

#25

Post by yunohn »

sneak wrote: post #13

> Ending this scourge on civilization is one of most important political problems facing the international community these days, and marks a new era of global cooperation on financial regulation that now necessarily transcends borders and nations. A very neutral, objective viewpoint. > However bitcoin is a technology which did not arise out of an engineering effort directed towards a specific problem or market ineffi…

Maybe you can explain more, and not just say “objectively false”?

Re: The Non-Innovation of Cryptocurrency

#26

Post by creshal »

mdoms wrote: post #20
hvidgaard wrote: post #15

Earlier quoted context omitted.

Many of mans greatest inventions have started like this. Just because we are not aware of a problem today, does not mean it is not there, will not come, or that it can be solved efficiently in other ways.

Can you name such a technology that existed for well over a decade before any real use cases were found?

LASER, back when it was still written in all caps. It was called "the most useless invention of the century" for a while, and it took close to a decade to figure a use for it.

But I think the whole discussion is missing the point. Blockchain is mostly not trying to be a solution to engineering problems, but societal, "how do we do X without a trustworthy party involved". We already know how to do any given X with someone trustworthy involved.

And, fundamentally, that's how society works, no matter how much anarchists wish it didn't. It's almost always possible to agree to some party to be in charge, making blockchain mostly pointless, no matter how much money is poured in the technical details.

Re: The Non-Innovation of Cryptocurrency

#27

Post by redpiller »

qeternity wrote: post #23
redpiller wrote: post #8

Earlier quoted context omitted.

We came up with a way to allow investors to independently verify how much profit a business makes with certainty without having to trust company directors or accountants. Clearly this is a value-add for new/small companies which don't yet have a reputation as it reduces risk for the investor. It's also a value-add for investors of big companies as it prevents them from being mislead about quarterly profits. In our sp…

> We use the token as the primary store of value for the profits of the underlying economic activity. Wonderful, so when the proprietor starts embezzling from the real-world operations, I’m sure you have that sorted out. Just sprinkle some blockchain on it. Your comment seems well meaning, but you do not seem to understand the real issues with due diligence. Source: ran US equity book for large hedge fund

There is no single operator. The company is decentralised with each director having the same vote. Even if an insider started embezzling funds, we would be able to see it based on the absense of proof of profit on the blockchain.

Since each person can verify the profits on-chain independently, it would raise raise flags if the amount if profits did not correspond to the expected amount of profits based on the assets which the business claims to have. All assets are disclosed publicly.

Re: The Non-Innovation of Cryptocurrency

#28

Post by lambdaphagy »

> scourge on civilization international community a fight for the cause of democratic norms rules-based international order consistent pushback “innovation” mistaken beliefs and not supported by any evidence quirky ideas chattering class “the potential for innovation” amorphous and hand-wavy rhetorical gestures a anarchist political narrative Private entities now wish to disrupt the global international order attempted financial coup anarcho-capitalist wing of Silicon Valley something so unregulated and volatile ideological purpose crypto acolytes cling to this narrative misplaced faith magical thinking and unspecified means or empty appeals failed narrative seemingly plausible zero evidence token schemes failed narrative highly irrational infinite chain of economically irrational actors greater pools of fools into the scheme Ponzi scheme laughable absurd to think systemic misunderstanding absurdly small original sin bluster amazing solution for nothing non-existent problems they don’t understand extremely byzantine Rube Goldberg-esque slot machines casino fiefdoms money laundering, ransomware criminality dark money veneer of gambling false claims zero evidence environmental devastation increasingly frothy ecosystem of scams to defraud the public

Re: The Non-Innovation of Cryptocurrency

#29

Post by redpiller »

timkam wrote: post #19
redpiller wrote: post #8

Earlier quoted context omitted.

We came up with a way to allow investors to independently verify how much profit a business makes with certainty without having to trust company directors or accountants. Clearly this is a value-add for new/small companies which don't yet have a reputation as it reduces risk for the investor. It's also a value-add for investors of big companies as it prevents them from being mislead about quarterly profits. In our sp…

Can you elaborate? I doubt your claim because "how much profit" a business makes is tied to the legal/financial system(s) the business operates in. To me it looks like we have the "object level vs. meta level" fallacy that is so typical for crypto enthusiasts: in the end, what governs our society is not crypto tech (object level), but meta level institutions. And even if these institutions were to agree that, for exa…

Here is an article about our use case:

https://jonathangrosdubois.medium.com/how-leasehold-achieves...

Re: The Non-Innovation of Cryptocurrency

#30

Post by creshal »

neilwilson wrote: post #21

"There are indeed a lot of fools in this world, but to presume an infinite chain of them as the core of an investment thesis is beyond absurd." It's worked for gold and diamonds for generations. Not to mention pretty much every artwork or other concoction human beings create and then collect. There's not a lot of cash flow from first edition Marvel comics, but there are an awful lot of them stored in plastic bags. Hu…

Precious metals and gemstones are also physical objects with strong industrial demand, that people hope will survive a civilisatory collapse; blockchain tokens can't even survive a prolonged power outage.

Artworks are desirable because they're physical objects with a limited supply that we can use to impress our peers. Memecoin #21983 can't do that.

Currencies are also backed by the physical assets of the country/countries issuing them, guaranteeing that you will find a buyer and will get value for it. Worst case, by making the country in question pull a Greece and sell you its lands. Who will give similar guarantees for memecoin #19381?

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