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The Handwavy Technobabble Nothingburger of Crypto

stephendiehl.com

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Re: The Handwavy Technobabble Nothingburger of Crypto

#481

Post by acjohnson55 »

thewarrior wrote: post #432
ineptech wrote: post #342

Earlier quoted context omitted.

The anti-crypto case is not that it's "worse" than some other speculative investment asset (gold, comic books, etc), it's that crypto is a speculative asset, as opposed to the things it's sometimes claimed to be (e.g. currency, a new way to do finance, etc).

This is something I’m stumped myself about. HN etc says crypto has no value and I wonder about other things in conventional finance that are of speculative value : Gold - Sure it’s a good store of value as a metal but so is bitcoin. If Gold can be valuable because lots of people value it as a store of value so can Bitcoin. In fact bitcoin is arguably better than Gold. The total wealth of the world is 1000 trillion. B…

One huge difference between Bitcoin and gold is that gold can be possessed purely on one's own. Bitcoin requires the continuous expenditure of energy to maintain the record of ownership.

Re: The Handwavy Technobabble Nothingburger of Crypto

#482

Post by TomSwirly »

vnchr wrote: post #397
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…

There’s astroturfing on HN, like every other open social media platform. The tilted dissonance around crypto, whether it’s the counterintuitive market behavior or climate change advocacy, is one of lacking curiosity, a hallmark of innovative cultures.

Funny how crypto people thinking insulting everyone else will change our minds!

"It has to be your lack of curiosity" (because there's no otherwise explaining your bad judgement).

Re: The Handwavy Technobabble Nothingburger of Crypto

#483

Post by _xnmw »

cwkoss wrote: post #375

This is the second time this week I've seen an article from Diehl on the front page that is critical of cryptocurrency but has next to zero substance. Weird that people regard him as a crypto expert, he doesn't seem to understand the space very well. - Comparing Bitcoin to doge and shiba is laughable - Re progcoins, he says "After twelve years of these technologies existing" - Ethereum is only 6 years old... - Like m…

> crypto is going to be a major force in global finance for decades to come.

Oh it'll stick around alright, and it will be a major force, just like drug dealing and insider trading and other illegal activities and scams that run rampant in the world. Ponzi schemes and promises of new riches will always exist, and there are enough suckers born every day to fall for new iterations of fancy digital woo-woo.

> this author doesn't understand the value of decentralized value transfer

You know what the original "decentralized value transfer" mechanism was? Cash. Those paper bills and metal coins we've been using for thousands of years. Nobody doubts the value of decentralized value transfer. Stablecoins, which aim to replace cash, are covered in that article. Personally, I think this is where crypto offers the most promise, but then it isn't really crypto at all, it is just a digitally managed Automated Clearing House for transferring value, i.e. an improved traditional finance, like most countries in Europe have had instant transfers for decades. Nothing "cryptographic" about that.

Re: The Handwavy Technobabble Nothingburger of Crypto

#484

Post by throwaway21332 »

horsawlarway wrote: post #444
throwaway21332 wrote: post #335

Earlier quoted context omitted.

The reason I am disconnecting those issues is that Bitcoin was never designed to solve the type of fraud you're talking about. There is no proposed mechanism to solve it, because it's outside of it's scope. It was designed to solve a specific set of frauds related with having a central authority though: censoring people from financial system, seizing your savings from your bank account and debasing the currency for t…

But now we're back to a spot where bitcoin doesn't work as a fungible good without an appeal to an outside authority of some sort. Whether that's escrow/insurance/legal contract/etc. We started with: "Anyone who says blockchain-driven assets don't have intrinsic value seems to ignore the value of trust - the ability to trust that the ledger is accurate seems extremely valuable." Except the ledger doesn't actually pro…

The ledger gives you a guarantee that only you can spend the BTC that you have access to. Nobody can "freeze" your UTXO or forbid you from accepting transactions.

Sure, the state can declare that the Bitcoin you own is not legitimate. It might do so because you're unable to prove the source of funds or maybe because it doesn't like your race or something else about you.

The cool thing about Bitcoin is that it is money that is separated from the state, the same way like Gold is. So as long as you can find a jurisdiction that considers your funds valid, you can escape your state violence. Of course this has it's pros and cons, but that's how it works when you separate money from the state.

This is the 5th comment that I'm making with this throwaway account, after which, I believe, I'm going to be rate-limited and unable to reply for a day. So, sorry for not being able continue this conversation :D

Re: The Handwavy Technobabble Nothingburger of Crypto

#485

Post by actually_a_dog »

fragmede wrote: post #443
actually_a_dog wrote: post #421

Earlier quoted context omitted.

Right, but that just means some paperwork gets filed when you attempt to do large transactions with cash, not that it's literally illegal to do those transactions. I don't understand why the toplevel comment says it's illegal to buy stocks. It seems like it would be merely very difficult, not illegal. I think your biggest problem would be finding a broker that would accept a pile of cash to buy you stocks with, rathe…

They're saying it's illegal because a random person can't just walk into a bank with a proverbial suitcase full of cash, and deposit it, and use that money to buy stocks. It's quite possible , and certain people do it regularly, but these aren't hypothetical people with no background. These are people known to the bank, its manager, have a thoroughly checked back story, and a reason for doing this, likely as the owne…

That's not what "illegal" means.

Re: The Handwavy Technobabble Nothingburger of Crypto

#486

Post by pcthrowaway »

rzanella wrote: post #218
can16358p wrote: post #121

Not being pegged to a centralized, state-controlled currency is a dealbreaker for me. It's still in infancy and it's true that 99% of the projects are get-rich-quick schemes with no intrinsic value. Though, I think the author lives in a country with a trustworthy government because that's not the case for many people including me. In the last two days my country's currency has shaken much more than crypto and I don't…

Not being pegged to a state-controlled currency means your devalued currency competes with stronger ones, at least on the fictitious transitional period, you're sure you want that ? Assuming a stateless money, when/if someone then steals your crypto coin, which gov't backed law/judicial system are you gonna turn to ?

> Assuming a stateless money, when/if someone then steals your crypto coin, which gov't backed law/judicial system are you gonna turn to ?

In many regimes where you can't trust the government, it's not really relevant what kind of currency is stolen, the police are probably not the people you'll go to for restitution.

There's an argument to be made that some cryptocurrencies (privacy-coins specifically) may also give you more protection from your finances being seized by a corrupt government, though you're generally SoL in such situations regardless of how you keep your money.

Re: The Handwavy Technobabble Nothingburger of Crypto

#487

Post by Animats »

1970-01-01 wrote: post #479
Animats wrote: post #430

What's so striking about all this is the sheer scale. There have been bubbles before, but not trillion dollar ones based on nothing. It's not just Bitcoin and friends. Rivian, which is just starting out as an electric light truck manufacturer, has a market cap of US$98 billion. First vehicles will ship no sooner than January 2022. This is more market cap than Ford Motor, the #1 seller of light trucks for the last 44…

Rivan began truck delivery months ago. Lordstown has a suitcase full of cash and a direct flight to Maldives coming up.

"The first R1T rolled off the assembly line in Normal, Illinois on September 14, which means that over about 48 days, the company was producing the R1T at an average rate of nearly 3.8/day (including weekends). ... Nearly all of these vehicles were delivered to Rivian employees."[1]

That's not production. That's debugging the assembly line.

[1] https://insideevs.com/news/544860/rivian-r1t-production-deli...

Re: The Handwavy Technobabble Nothingburger of Crypto

#488

Post by worik »

weego wrote: post #409
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…

People talk about things like Bitcoin as a threat to sovereign currencies, and they are, as competitors, of sorts No, they're competitors for the stores of sovereign wealth that are the backing of sovereign currencies.

How so? Bitcoin is not a store of value, and sovereign currencies (I think I know what that means) are not backed by stores of wealth.

Re: The Handwavy Technobabble Nothingburger of Crypto

#489

Post by coralreef »

sseagull wrote: post #439
coralreef wrote: post #347

Earlier quoted context omitted.

Yes, money creation pushed wages up as it did costs. And gains from technology resulted in real wealth increases for society in general. However, holding the asset itself resulted in loss of buying power over time. There is a distinction between cash the asset (the thing you hold and trade with), and income. Holding shares in a corporation over 50 years may be a good idea (depending on the company). Holding land/hous…

The flip side is deflation, though. Which isn’t exactly pretty. If the value of my fiat money is increasing, then I will hold on to it, which is good for me. If everyone does that, then the economy grinds to a halt. The stock/bond market is, although not always efficient, at least somewhat enabling of economic activity, whereas just holding your currency (including bitcoin) is not.

Right, it doesn't necessarily grind the economy to a halt; it simply forces investments to be worthwhile, because now they have to generate enough return to satisfy a higher interest rate. If money is not cheap, speculation is less rampant, but also risk taking is more expensive; this is a forcing mechanism for efficiency.

The interest rate (cost of money) simply returns to a supply/demand market equilibrium. The economy possibly smoothens out, rather than giving us artificial boom and bust cycles thanks to inefficient central bank policies.

Re: The Handwavy Technobabble Nothingburger of Crypto

#490

Post by mypalmike »

koonsolo wrote: post #356
PantaloonFlames wrote: post #339

Earlier quoted context omitted.

The issue is not whether a person can make money in a Ponzi scheme. We know it is possible. The issue is, is it a good idea?

Buying low and selling high is not a ponzi scheme.

The losers in a Ponzi scheme buy high and sell low. What did the winners do?
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