Crypto: The Good, the Bad and the Ugly • Hacker News Board

Re: Crypto: The Good, the Bad and the Ugly

#201

Post by randomhodler84 » Thu, Jan 06, 2022, 10:37 AM UTC

ethbr0 wrote: post #183

rland wrote: post #157

Earlier quoted context omitted.

The difference, though, is that the proof of work is qualitatively — physically! — a different type of work. The value of money is derived from moving against thermodynamic equilibrium. Cryptocurrency’s value comes from moving towards thermodynamic equilibrium. The conversion of work into heat — not heat into work! I’m not talking about taxation or apps. Those are things built with the axioms of crypto-evangelism. I’…

Burning electrical power is the most globally available version of burning universal value. The thermodynamic direction is less important than the fact that people didn't want to do it. But proof of work was always a transitory, bootstrapping phase. Even among the crypto evangelists, I can't believe anyone saw a long-term future in that.

Slinging double SHA256 til the heat death of the universe is my long term vision. POW as a bootstrap phase is ethereum pos wishful nonsense. Many see the long term future of PoW. Many believe it is the only way.

Re: Crypto: The Good, the Bad and the Ugly

#202

Post by lukeramsden » Thu, Jan 06, 2022, 10:39 AM UTC

mgaunard wrote: post #108

Animats wrote: post #67

'"Tokens align network participants to work together toward a common goal — the growth of the network and the appreciation of the token." That's great if what you're trying to do is create an ecosystem of tokens that appreciate in value all the time. What percentage of systems can be modeled that way?' That's the problem. "An ecosystem of tokens that appreciate in value all the time". The perpetual motion machine of…

Isn't money supposed to depreciate over time rather than appreciate?

That's the central bank narrative, whether its a good thing or not I think is still up for debate. Regardless, this can still be done with crypto (in fact, Ethereum is inflationary and not fixed cap like Bitcoin is), except that speculation and capital inflow still drastically outpace the inflation. Presumably one day an equilibrium will be reached.

Re: Crypto: The Good, the Bad and the Ugly

#203

Post by Nursie » Thu, Jan 06, 2022, 10:39 AM UTC

Geee wrote: post #132

pcthrowaway wrote: post #8

Earlier quoted context omitted.

I agree, but our problem is with proof of work, not crypto. I don't buy/use bitcoin any more because of this. Ethereum is moving (the sooner the better), and the only other PoW crypto I have a bit of is innovating PoW and (hopefully) becomes more environmentally friendly as a result. To be honest, I'm still unclear on if this is even possible, and if energy usage becomes significant relative to what it does, I would…

Bitcoin and PoW is our only shot at decentralized monetary system. PoS has many problems, and it can't provide the same level of confidence in the system as PoW. There's no way to reach objective consensus in a PoS system.[0] From this angle, I see PoS as an adversarial attack against decentralization. Failing to understand this is dangerous. Bitcoin mining uses increasingly clean or otherwise wasted energy, which so…

Bitcoin adds a whole new country to an international power economy that already cannot provide enough green power. In some places (notably the US) fossil power is being brought back online to service it.

These assertions that it is clean are not based on anything more than wishful thinking.

Re: Crypto: The Good, the Bad and the Ugly

#204

Post by Nursie » Thu, Jan 06, 2022, 10:41 AM UTC

0x0nyandesu wrote: post #180

8note wrote: post #163

Earlier quoted context omitted.

Green and crypto are incompatible ideas. You don't waste for the sake of wasting when you're looking to be green.

Banks use way more electricity just cooling and heating their offices for the meat sacks that run their business than crypto ever will.

1. Doubtful, as Bitcoin alone uses more power than entire countries

2. Banks provide orders or magnitude more services than cryptocurrency ever will

Re: Crypto: The Good, the Bad and the Ugly

#205

Post by grey-area » Thu, Jan 06, 2022, 10:42 AM UTC

shard wrote: post #177

grey-area wrote: post #148

Earlier quoted context omitted.

I'd have a slightly different take, recent changes in asset prices and the speculative frenzy are due to changes in monetary and fiscal policy since 2008. I'd include the popularity of cryptocurrencies as speculative assets in that (they don't seem to have any other use-value). Asset prices have seen massive inflation in the last decade due to ZIRP, asset purchases by central banks on an unprecedented scale. The risk…

That's very interesting, could you answer a few questions, or point me to some resource which explains in more detail? 1. How does this story end? 2. Which Fed announcement are you referring to? That rates will be raised? What do you mean the party's over, that speculation will decrease and prices will drop? 3. "This impacts tech stocks which are not making money and not likely to make money" You mean that this will…

1. IMO it ends in inflation and crisis or stock crash and crisis, it's created a very unstable system addicted to fed stimulus. Possible of course that the fed can keep printing and try to prolong the agony a little longer.

2. For the last few months and more strongly recently the Fed has been signalling that they are going to taper stimulus, hence the rocky ride in the US stock market (driven to spectacular highs over the last decade by Fed purchases of treasuries and even corp bonds).[1]

3. US stocks in particular have not been valued on fundamentals in a long time - the indexes are propped up by a small group of tech stocks which are very overvalued, even world indexes are imbalanced in this way (50% US, 2% Apple for VWRL for example).

4. Well so far, they will doubtless have some wobbles on the way and may even reverse position completely as they have in the past (see 2013 and 2018 withdrawal of QE below [2]). This prevarication IMO just makes the eventual shock when they have to withdraw it even greater, and/or devaluation of the currency worse. They may choose to devalue the currency further so that nominally stock prices stay level, but that leads to inflation...

5. I don't think the two are linked, save that commodities are also linked to monetary and fiscal policy which has bid them up to unsustainable highs and led to unrest around the world (after 2008 and now again as price inflation rises). Sorry if that was unclear, I meant the Fed policies were starting to feed through to inflation.

To be fair to cryptocurrencies like Bitcoin, this is precisely the sort of market distortion and financial repression it was created in reaction to and attempts to solve, it's just unfortunate it was unsuited to use as a currency and has been taken over instead by speculative carpet baggers intent on fleecing others.

[1] https://www.reuters.com/markets/europe/wall-street-closes-sh...

[2] https://www.investopedia.com/terms/t/taper-tantrum.asp

Re: Crypto: The Good, the Bad and the Ugly

#206

Post by notahacker » Thu, Jan 06, 2022, 10:43 AM UTC

int_19h wrote: post #127

dagmx wrote: post #81

Earlier quoted context omitted.

Your first comment is a very common crypto talking point that isn't really borne in reality IMHO. It takes decades to see the impact. It almost never takes a decade to see the use, and that's what people are deriding. Crypto doesn't really solve a problem that needed solving and it is often the wrong solution for many things it's used for. All at a very high cost. Cryptocurrency hasn't really brought much in the way…

Hawala clearly solves a problem - the very fact of its existence is proof of that. Crypto solves the same problem.

The problem Hawala solves is turning currency at one end into spendable cash (probably denominated in a different currency) at the other end

Crypto doesn't solve this (except in very limited circumstances where recipients can buy everything they need with crypto). It's just a layer in the middle, and as it's a layer which requires additional exchanges, it's not more efficient except where it provides a loophole in foreign exchange regulations or where parties with a vested interest in crypto have chosen to subsidise the exchange costs.

Re: Crypto: The Good, the Bad and the Ugly

#207

Post by CryptoPunk » Thu, Jan 06, 2022, 10:44 AM UTC

DyslexicAtheist wrote: post #106

donkeyd wrote: post #66

Earlier quoted context omitted.

I believe the idea of Web3/Crypto is that it's decentralized, so there's no Google or Facebook to take a cut or control a narrative.

> I believe the idea of Web3/Crypto is that it's decentralized Web3 is Centralized: https://blog.wesleyac.com/posts/web3-centralized - discussed here a few days ago: https://news.ycombinator.com/item?id=29766497 Even if it were decentralized, the moment a technology appears to be decentralized, we do everything in our power to add a centralized (management) layer on top (e.g. github). That layer is what the masses wi…

So-called Web3 applications are not pure Web3 - they have many centralized Web2 elements still present. The transition to Web3 will naturally happen incrementally, given it's an entirely new technological stack that has to be built out.

Also, there are benefits to even partial adoption of Web3 by applications. For example, providing a decentralized ownership graph gives the community more power to fork if the centralized server-provider abuses their power, for instance.

See what happened when Steem was seized by a billionaire to be made into a corporate appendage:

https://decrypt.co/38050/steem-steemit-tron-justin-sun-crypt...

Token ownership, that could not be censored by the new owner of the application, is what enabled this coordinated defection.

Re: Crypto: The Good, the Bad and the Ugly

#208

Post by lukeramsden » Thu, Jan 06, 2022, 10:47 AM UTC

nmaley wrote: post #187

Some remarks from Captain Obvious here. The primary use case for crypto is simple: (1) People buy crypto because it keeps going up in value (2) It keeps going up in value because people keep buying it. (3) For why people keep buying Crypto, see (1). That's the logic of a Ponzi scheme. All previous Ponzi schemes failed because either (a) sooner or later the scheme runs out of new suckers, and/or (b) the authorities in…

> Sooner or later, the founders of BTC (for example) will start to cash out. At the moment, they seem to be cashing out gradually

Who are these "BTC founders" that are cashing out gradually? The only actual founder of Bitcoin, the anonymous Satoshi, has not moved any BTC since they disappeared from the internet: https://whale-alert.medium.com/the-satoshi-fortune-e49cf73f9...

Re: Crypto: The Good, the Bad and the Ugly

#209

Post by twic » Thu, Jan 06, 2022, 10:48 AM UTC

thomasikzelf wrote: post #131

Crypto needs to solve a problem. I think cryptocurrencies should focus on making a cheap currency that people can actually use. requirements: - low transaction costs - low volatility - many places where you can pay with it - secure - privacy - no tax problems - fast transactions - handle fraud - scalable If a crypto currency can solve above points by cutting out the middle man and making transactions virtually free i…

With the possible exception of "privacy", that use case is already solved by bank transfers all over the world - in particular, check out India's UPI:

https://bam.kalzumeus.com/archive/bank-transfers-as-a-paymen...

Re: Crypto: The Good, the Bad and the Ugly

#210

Post by notahacker » Thu, Jan 06, 2022, 10:50 AM UTC

lui8906 wrote: post #189

wnkrshm wrote: post #82

Earlier quoted context omitted.

NFTs are always brought up for game items but I don't understand the non-fungible part of it. A game item or cosmetic is the example par-excellence for a thing that anyone can have a copy of - I don't get why there has to be artificial scarcity in that at all.

Perhaps you're not playing modern games where skins and cosmetics already go for a lot of money. Games like Call of Duty, Apex Legends etc.. Cosmetics in these games have a rarity rating and single items can go for hundreds of dollars. They are already artificially scarce, however the user needs to trust the developer that this artificial scarcity will remain in the future post purchase. And that the items will be av…

NFTS provide no reason to trust the developer about the artificial scarcity; there's absolutely nothing technical stopping them making, say, in-game clothing originally marketed as an expensive NFT the default player skin, or not allowing accounts with linked NFTs to log in. Sure, the NFT holder still has their unique alphanumeric string, but from a gameplay perspective nobody cares.

And from a developer perspective, if game engines were written in a way which made the holders of a certain token impossible to exclude from the game or possess items whose properties couldn't be adjusted for gameplay balance or aesthetics, that would be a bug, not a feature.