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The Handwavy Technobabble Nothingburger of Crypto

stephendiehl.com

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Re: The Handwavy Technobabble Nothingburger of Crypto

#451

Post by AlexandrB »

briantakita wrote: post #116
bhouston wrote: post #98

Earlier quoted context omitted.

Can you point out what is low quality about it? Right now it seems that you are just making that claim because you disagree with the thesis of the article. e.g. https://www.txstate.edu/philosophy/resources/fallacy-definit...

Using the phrase "woo woo" along with various strawmen & many omissions of why crypto is being adopted was the extent of his criticism, hence low quality. He does not understand crypto & is trying to sell his competing product. If he were to talk about decentralization/distribution vs centralization along with who controls the fiat money supply & who benefits & who does not benefit from the fiat central bank policies…

> He does not understand crypto & is trying to sell his competing product.

This is the repeated refrain of crypto believers. "You just don't get it." And yet when I ask someone to explain it to me (not the technology, the economics) I get hand-waving, self-contradicting promises (e.g. universal identity + resistance to censorship), and appeals to greed ("you must like being poor").

When faced with this, I'm often reminded of Richard Feynman's oft-cited belief that "if you can't explain it to an undergrad student, you don't really understand it". So my conclusion is that either nobody understands cryptocurrency economics and thus no one has been able to sufficiently explain it or the explanations I've heard are complete and accurate - i.e. I do understand it, and it's an emperor with no clothes.

Re: The Handwavy Technobabble Nothingburger of Crypto

#452

Post by sjtindell »

verdverm wrote: post #381
sjtindell wrote: post #354

Earlier quoted context omitted.

HN’s attitude is very surprising to me. I would think that they could get very excited about flash loans, decentralized exchanges (automated market makers), daos, and other concrete innovations coming out of crypto asset projects. I think it’s mostly jealousy and a feeling that they missed the boat, so they want to see it sink. I think that because I’ve had the feeling many times. They may not realize these are early…

I was excited 4 years ago when I first discovered these crypto concepts. As time has gone on and I've learned more about them, they are less interesting and come with a ton of baggage. There are interesting things like formal verification, but I expect that these types of things will be taken without the blockchain. You shouldn't dismiss HN attitudes as jealousy or asleep, that is derogatory.

Yeah the language is a bit strong. I’m serious about the jealousy though - perhaps it’s just me. But when I see someone making a boatload on Tesla and I’m sitting there thinking it’s ridiculous, where does that really come from? All I know is I probably wouldn’t care either way if I’d owned some…and since my experiences with day trading and algorithmic trading, I’m convinced 90% of finance is emotional. It clouds the mind and corrupts usually rational people.

Re: The Handwavy Technobabble Nothingburger of Crypto

#453

Post by danielmarkbruce »

sbierwagen wrote: post #422
HWR_14 wrote: post #416

Earlier quoted context omitted.

> That means that if banks (which are businesses) are not good at doing business, the government is essentially forced to treat them as dollar-equivalents by making them whol The federal government also charges the banks for that insurance. It usually is not a loss for the government.

The federal government prints dollars. It is never going to take a loss doing that.

The federal government does all kinds of things it can take a loss on, and it does in fact take losses.

The federal reserve prints dollars and buys government bonds.

Re: The Handwavy Technobabble Nothingburger of Crypto

#454

Post by [deleted] »

ycombobreaker wrote: post #377
sjtindell wrote: post #354

Earlier quoted context omitted.

HN’s attitude is very surprising to me. I would think that they could get very excited about flash loans, decentralized exchanges (automated market makers), daos, and other concrete innovations coming out of crypto asset projects. I think it’s mostly jealousy and a feeling that they missed the boat, so they want to see it sink. I think that because I’ve had the feeling many times. They may not realize these are early…

> automated market makers Are you claiming that this is an innovation associated with crypto? Can you elaborate or clarify, as the case may be?

[deleted]

Re: The Handwavy Technobabble Nothingburger of Crypto

#455

Post by danielmarkbruce »

AnimalMuppet wrote: post #305
andrewla wrote: post #103

If anything, I think stablecoins are way more dangerous than the author indicates. People talk about things like Bitcoin as a threat to sovereign currencies, and they are, as competitors, of sorts. But stablecoins are another matter entirely. One huge aspect of the value of sovereign currencies is that they are instruments of law -- courts will settle in them as a lowest common denominator, and it is safe to use them…

Wait, you can't legally buy stocks with cash? Why not?

I can buy stocks from you, with cash. It's cumbersome as hell. No one does it to my knowledge. From a practical perspective you basically cannot buy stocks with cash.

Re: The Handwavy Technobabble Nothingburger of Crypto

#456

Post by koonsolo »

sjtindell wrote: post #354
llimos wrote: post #301

Most people on HN are rational people who look at the world in a rational way. Bitcoin and friends are not operating in a rational market, therefore we don't understand them, and most of us would probably be pretty lousy investors since we would try to make decisions rationally instead of memeing and YOLOing. But, and this is a key point, that doesn't make us right and them wrong . It's just a different kind of marke…

HN’s attitude is very surprising to me. I would think that they could get very excited about flash loans, decentralized exchanges (automated market makers), daos, and other concrete innovations coming out of crypto asset projects. I think it’s mostly jealousy and a feeling that they missed the boat, so they want to see it sink. I think that because I’ve had the feeling many times. They may not realize these are early…

It's like talking to an old person about computer games. They literally see 0 value and don't get why we are all excited about it. Most feel it's a net negative on society.

And yes, that's also a market that dwarfs all of its neighbors.

Re: The Handwavy Technobabble Nothingburger of Crypto

#457

Post by timdaub »

Imnimo wrote: post #442
timdaub wrote: post #431

Earlier quoted context omitted.

The automated market maker design of Uniswap is useful even for non-blockchain based scripts to e.g. trade stocks digitally. It's just a simple way of creating an orderbook and liquidity. So you don't need to be convinced of the real utilities of tokens to appreciate the brilliance of the design.

Sure, but it's being presented as a reason to be excited about crypto, so any non-crypto applications aren't really relevant here.

Sounds like you're being deliberately picky to get your point across that crypto is shit.

Re: The Handwavy Technobabble Nothingburger of Crypto

#458

Post by chishaku »

bhouston wrote: post #207
briantakita wrote: post #116

Earlier quoted context omitted.

Using the phrase "woo woo" along with various strawmen & many omissions of why crypto is being adopted was the extent of his criticism, hence low quality. He does not understand crypto & is trying to sell his competing product. If he were to talk about decentralization/distribution vs centralization along with who controls the fiat money supply & who benefits & who does not benefit from the fiat central bank policies…

> If he were to talk about decentralization/distribution vs centralization along with who controls the fiat money supply & who benefits & who does not benefit from the fiat central bank policies, then he would at least begin to broach the subject of why crypto currencies are being adopted. Is that why crypto is being adopted? Are you serious? I bet nearly no one who buys crypto even knows what fiat money is nor have…

> I bet nearly no one who buys crypto even knows what fiat money is

You're uninformed.

GS, BofA, Barclays, Citi, CS, DB, JPM, MS, UBS, WF and countless funds.

The current hype cycle would be nothing without the institutional support.

But even before institutional investors started jumping in, traders and other employees of the above institutions have long been a key part of crypto markets.

Re: The Handwavy Technobabble Nothingburger of Crypto

#459

Post by dominiek »

"Any application that could be done on a blockchain could be better done on a centralized database. Except crime."

What if the actual crime is committed by those that control our money...

Saifedean Ammous' book "The Bitcoin Standard" gives an excellent history of hard money and shows that any new form of hard money will inevitably replace the lesser form (e.g. from the silver standard to the gold standard).

Crypto is composed of interesting projects and scams. Gambling and speculations are symptoms of a wider problem of debased currency and a lack of hard money.

Bitcoin fixes this...

Talking about Bitcoin in the same vain as Crypto shows a profound lack of understanding of history both past and recent when looking at Bitcoin.

While people trade their little Pokemon NFTs Bitcoin will be doing what Bitcoin has been doing from the beginning: Staying exactly 21 million bitcoin - the scarcest and most accessible form of hard money the world has ever seen. It's a black hole sucking in monetary inflation.

1 Bitcoin = 1 Bitcoin.

Re: The Handwavy Technobabble Nothingburger of Crypto

#460

Post by TSiege »

andrewla wrote: post #103

If anything, I think stablecoins are way more dangerous than the author indicates. People talk about things like Bitcoin as a threat to sovereign currencies, and they are, as competitors, of sorts. But stablecoins are another matter entirely. One huge aspect of the value of sovereign currencies is that they are instruments of law -- courts will settle in them as a lowest common denominator, and it is safe to use them…

I was just thinking the same thing. I was looking into [Gemini Dollar](https://www.gemini.com/dollar) yesterday. It's a stable coin that gives the patina of being FDIC secured. Their website says, "Gemini is a U.S. company regulated by the New York Department of Financial Services. GUSD reserves are eligible for FDIC insurance up to $250,000 per user while custodied with State Street Bank and Trust.¹" Furthermore, Gemini offers 8% interest deposits of their Gemini Dollar. This sounds like a safe bet to an unassuming person. Easy 8% returns with no risk since your initial deposit is FDIC insured, so it's just like any other savings account. BUT ITS NOT. The fine print reads, "FDIC insurance applies only to the USD reserve funds. GUSD exist as ERC-20 tokens on the Ethereum blockchain; tokens are under the user’s self-custody, and are not insured through Gemini."

And this is coming from a reputable backer, relative to other stable coins. Then you have Tether which is a ponzi scheme tire fire years in the making and done almost entirely in the open with no consequences. Given that stablecoins like these are used to underpin a lot of the crypto markets, if one of these were to falter I don't see how it couldn't trigger knock on effects bringing down the others and the entire crypto market with it.

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