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The Handwavy Technobabble Nothingburger of Crypto

stephendiehl.com

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Re: The Handwavy Technobabble Nothingburger of Crypto

#621

Post by SuoDuanDao »

worik wrote: post #609
SuoDuanDao wrote: post #550

Earlier quoted context omitted.

I suspect that much of HN, either directly or via their backers/employers, also comes out of the angel-investment scene and has emotional ties to the more conventional funding mechanisms that were themselves disruptive to traditional finance. "You can't make someone understand something when their income depends on not understanding it" and all that.

I do not have a dog in this fight. I do have an extensive economics education, and deep and wide IT experience. I do not understand how crypto is any use for anything that is not illegal and/or immoral. My conclusion is that it is largely for illegal transactions and scams.

What is your response to the idea that it can automate the role of a trusted third party in commerce, thereby removing much of the opportunity for abuse of this role?

Re: The Handwavy Technobabble Nothingburger of Crypto

#622

Post by mypalmike »

koonsolo wrote: post #560
mypalmike wrote: post #547

Earlier quoted context omitted.

Your infer a lot from a little.

Seems to be your definition of a ponzi scheme. At least on wikipedia they don't agree with that definition.

I described attributes of a Ponzi scheme. These attributes may apply to other investments. I made no attempt to define anything. You infer where inference is not applicable.

Re: The Handwavy Technobabble Nothingburger of Crypto

#623

Post by worik »

SuoDuanDao wrote: post #621
worik wrote: post #609

Earlier quoted context omitted.

I do not have a dog in this fight. I do have an extensive economics education, and deep and wide IT experience. I do not understand how crypto is any use for anything that is not illegal and/or immoral. My conclusion is that it is largely for illegal transactions and scams.

What is your response to the idea that it can automate the role of a trusted third party in commerce, thereby removing much of the opportunity for abuse of this role?

Trust really matters in commerce. Doing away with trust is bad. If we do not trust each other there is no technology on Dog's Green Earth that can save us.

Can you be trusted? Ask yourself.

Re: The Handwavy Technobabble Nothingburger of Crypto

#624

Post by worik »

SuoDuanDao wrote: post #542
worik wrote: post #488

Earlier quoted context omitted.

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.

Inflationary vs deflationary instruments. Sovereign currencies are typically inflationary because central banks print them to a greater or lesser degree, National Assets like gold or land reserves are typically deflationary. Bitcoin is more the latter.

Why are "National Assets" (and what s the definition of that) deflationary?

Inflation/deflation is in my experience measured as money V. assets. Assets on their own are neither. Have I got that wrong?

Re: The Handwavy Technobabble Nothingburger of Crypto

#625

Post by sjtindell »

breuleux wrote: post #533
sjtindell wrote: post #495

Earlier quoted context omitted.

I commented this further down and am interested in your thoughts. One thing I’ve come to appreciate more when we talk about the “real value” being produced is that these are essentially just money games. Lots of established Wall Street firms play money games for a (very, very good) living. I’ve come to accept more that what people on Wall Street do is real. Games are real. I don’t personally buy into the “new world c…

I guess I can understand the idea of blockchains as a better way to play financial games. That's a valid use for which there is demand. Another use I can understand is hedging against political instability. Neither personally appeal to me, but I get it. Still, it seems to me that an awful lot of people are playing this game with scant knowledge of the rules or of what's involved, which is a bit like investing in Tesl…

One of the most realistic takes in this thread, thanks for sharing. I strongly agree. I am severely disillusioned about the early promises of crypto that I espoused. I have settled more on your view, but I think we will cull out the garbage pets.com equivalents and in 10 more years we will see serious companies that are publicly listed developing large scale financial games. Whether they have any connection at all to existing tech (99% of which I think are not just bad but actively toxic scams) is tenuous at best.

Re: The Handwavy Technobabble Nothingburger of Crypto

#626

Post by sjtindell »

worik wrote: post #609
SuoDuanDao wrote: post #550

Earlier quoted context omitted.

I suspect that much of HN, either directly or via their backers/employers, also comes out of the angel-investment scene and has emotional ties to the more conventional funding mechanisms that were themselves disruptive to traditional finance. "You can't make someone understand something when their income depends on not understanding it" and all that.

I do not have a dog in this fight. I do have an extensive economics education, and deep and wide IT experience. I do not understand how crypto is any use for anything that is not illegal and/or immoral. My conclusion is that it is largely for illegal transactions and scams.

What’s your opinion of uniswap, flash loans, and daos? These are the strongest use cases I know of. Would you mind taking a look at some of my other comments in this thread related to money games in traditional finance and let me know your take?

Re: The Handwavy Technobabble Nothingburger of Crypto

#627

Post by sershe »

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

"Crime" is a word with bad connotations, but what it actually means is "whatever your government doesn't allow you to do". Being able to do something that a government doesn't want you to do isn't prima facie wrong or immoral in most of the world. Even under more benign governments like the US one, there are plenty of normal activities that it doesn't allow for various bad reasons (war on drugs is a good example). Technically, bypassing the restrictions on drugs, avoiding capital controls or straight up confiscation of deposits, opting out of local currency devaluation, etc. can be "crime". However, it is actually good that crypto makes that possible.

Is crypto a good tool for that, long term, from a technological standpoint? I am not sure. But the author is clearly sneaking in connotations here.

Re: The Handwavy Technobabble Nothingburger of Crypto

#628

Post by ivalm »

JuliusBranson wrote: post #357
dragonwriter wrote: post #304

Earlier quoted context omitted.

> When there's stablecoin, you just put your dollar in stablecoin before they print the money, the dollar inflates, stablecoin goes up proportionately, Printing fiat makes stablecoins denominated in the currency lose real value, not gain in it. (Stablecoins denominated in a different currency would gain nominal value in the printed currency, the same way direct holdings in the alternative currency would.) So, no, to…

>Printing fiat makes stablecoins denominated in the currency lose real value, not gain in it. What's the case for this statement? In general, I don't expect to commodities to change value just because some currency was redistributed.

Stablecoin is not a commodity, it is literally a token pegged to the value of a given fiat (such as dollar) or a basket of several fist currencies.

Re: The Handwavy Technobabble Nothingburger of Crypto

#629

Post by betwixthewires »

horsawlarway wrote: post #284
betwixthewires wrote: post #246

Earlier quoted context omitted.

I see your perspective. There's another perspective from which you could look at the details of your situation. You deferred to a trusted party to secure your wealth and because that third party was untrustworthy, you have to defer to an intermediary. Had you deferred to yourself to secure your wealth you wouldn't be in this situation. The ledger would be the canonical one of ownership and possession, and you wouldn'…

Ok - so follow along with me here: I owned no bitcoins at the time I desired to trade bitcoins for a physical product (in this case: ~7g of Cannabis) What recourse do I have that does not require trusting a third party? I do not own the required compute power to mine it myself (not technically true at the time, although certainly true today) I'd like to have you walk me through the exact set of steps to acquire my bi…

1) generate a private key,

2) move it to the private key.

When you're ready to spend it, spend it. Those places where you were looking to buy cannabis have escrow services, at the time you'd have had to trust the platform only upon purchase, nowadays multisig escrow is standard, which requires significantly less trust in a single party.

Re: The Handwavy Technobabble Nothingburger of Crypto

#630

Post by ivalm »

tommek4077 wrote: post #68
rchowe wrote: post #41

Earlier quoted context omitted.

Most Bitcoin transactions have a quite high transaction cost, and I would argue that chargebacks are an important consumer protection.

Only if you do your transaction on the blockchain. Most are done internally. It's like your bank is not sending someone with a suitcase full of money just because you pay your phone bill.

> Most are done internally

You mean with one centralized authority you have to trust?

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