Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Crypto is an unproductive bubble

alexkolchinski.com

Post reply on HN
Print view View original

31–40 of 539 posts

Re: Crypto is an unproductive bubble

#31

Post by anonporridge »

charcircuit wrote: post #23
jmcgough wrote: post #19

One of the biggest drawbacks for blockchain is that transactions can't be revoked after the fact (with the only exception being costly forks of the entire ledger), and there's no additional human oversight (like I'd get when sending a large amount of money through a bank) to protect me. If someone steals my credit card, I have my credit card company to give me some level of protection. They can block transactions if…

The same flaw applies to cash. If you give someone $5 there is no way to revoke that transaction. You only can ask them to make a new transaction and give you the $5 back. Just like how additional layers were built on top of cash,new layers will be built on top of cryptocurrencies leading way to the "crypto 2.0" you are waiting for.

Or gold. Or any other property.

Bitcoin is simply digital property. And like real world property, you can mess up and lose it irrevocably.

If you give your gold to the wrong person or drop it to the bottom of the sea, you're probably not getting it back.

If you under fund your military, and someone else comes in and takes control of your land, you're probably not getting it back.

If you send your bitcoin to the wrong address, or mismanage your private keys such that they are stolen, you're probably not getting it back.

Re: Crypto is an unproductive bubble

#33

Post by mattwilsonn888 »

jmcgough wrote: post #19

One of the biggest drawbacks for blockchain is that transactions can't be revoked after the fact (with the only exception being costly forks of the entire ledger), and there's no additional human oversight (like I'd get when sending a large amount of money through a bank) to protect me. If someone steals my credit card, I have my credit card company to give me some level of protection. They can block transactions if…

The beauty of crypto is that those tools are exposed and not required, and that the underlying rules are universal. Banks and custodial services built off of shared liability, insurance, reversions, any useful thing a bank does are still possible with crypto - in fact they aren't even that complicated.

The difference is that while allowing a (properly set up) crypto bank to transfer funds you may also at any point and for any reason take full custody over your coins. The private key which enables that should not be used for anything other than emergency (minimize attack surface) and keeping such a key secure is not all that difficult. With this combination you get all the benefits of a normal bank yet they are powerless without express authorization to do anything with your funds. You can withdraw at any point for any reason.

Services and practices securing your private key will need to be widespread before adoption seriously takes off. Storing a seed phrase in your sock drawer is not acceptable: Vitalik Buterin secured his billions via two physical pieces of paper which summed to his private key; surely a step in the right direction. An n of m scheme with each n being held by parties unlikely to collaborate is another solution.

This is all not even mentioning massive private banking and its relationship to the economy and bias towards the wealthy. Crypto is FOSS finance, it works for the people as stated and expected. As I said, you are correct - using your layer 1 sovereign access for everyday use is a security blunder - you now know where progress points.

Re: Crypto is an unproductive bubble

#34

Post by [deleted] »

charcircuit wrote: post #23
jmcgough wrote: post #19

One of the biggest drawbacks for blockchain is that transactions can't be revoked after the fact (with the only exception being costly forks of the entire ledger), and there's no additional human oversight (like I'd get when sending a large amount of money through a bank) to protect me. If someone steals my credit card, I have my credit card company to give me some level of protection. They can block transactions if…

The same flaw applies to cash. If you give someone $5 there is no way to revoke that transaction. You only can ask them to make a new transaction and give you the $5 back. Just like how additional layers were built on top of cash,new layers will be built on top of cryptocurrencies leading way to the "crypto 2.0" you are waiting for.

[deleted]

Re: Crypto is an unproductive bubble

#35

Post by nly »

paxys wrote: post #7

While I agree with 2 and mostly agree with 3, I don't see how anyone can say "crypto is a bubble" with high confidence. Even if it is a 100% speculative investment with no real world use, that doesn't automatically make it a bubble. There are plenty of similar investment classes that have persisted through the ages and society has deemed perfectly valid – gold, art, precious gems, trading cards, virtual hats...I'm su…

Most of the other things you mentioned are collectibles. They're either rare, non-fungible or completely one-of-a-kind and therefore fought over in the niche markets in which they trade.

Gold is a commodity with genuine industrial uses, and ingrained appeal to humans through thousands of years of being adorned and traded as jewelry. Sure, it's been diminished, we have so many materials now that can be used industrially and fashioned in to shiny trinkets, but comparing it to a completely synthetic, abstract instrument like Bitcoin is a bit disingenuous.

I definitely think there's room in the world for a completely decentralised peer to peer digital cash equivalent, but I think it remains to be seen how valuable everyday people in this world consider this utility.

Re: Crypto is an unproductive bubble

#36

Post by [deleted] »

mirntyfirty wrote: post #13
seibelj wrote: post #5

Counter point - art itself has absolutely zero non-monetary applications. If you disagree, then you must admit NFTs can be appreciated as art. If so, the argument of the OP is refuted. If you think art can be appreciated without being an NFT, then why pay any amount of money for any physical art when a super high resolution PNG does the same thing?

I see NFT as an alias to a file.

[deleted]

Re: Crypto is an unproductive bubble

#38

Post by jmcgough »

charcircuit wrote: post #23
jmcgough wrote: post #19

One of the biggest drawbacks for blockchain is that transactions can't be revoked after the fact (with the only exception being costly forks of the entire ledger), and there's no additional human oversight (like I'd get when sending a large amount of money through a bank) to protect me. If someone steals my credit card, I have my credit card company to give me some level of protection. They can block transactions if…

The same flaw applies to cash. If you give someone $5 there is no way to revoke that transaction. You only can ask them to make a new transaction and give you the $5 back. Just like how additional layers were built on top of cash,new layers will be built on top of cryptocurrencies leading way to the "crypto 2.0" you are waiting for.

It's not quite the same. With cash, I have to meet them in person. I probably know their name or where to find them again. I can file a lawsuit, a police report. They have incentive to make things right for me because it can have real life repercussions for them.

I'm not saying that it's an impossible problem to solve, but our society and legal system aren't structured in a way that makes it easy.

Re: Crypto is an unproductive bubble

#39

Post by acjohnson55 »

> Claim 2: Blockchain technology has no non-monetary applications (Confidence: High)

I would replace "non-monetery" with "non-financial". I think it's a perfectly reasonable (albeit, imperfect) solution as a ledger and exchange mechanism for new financial assets.

Re: Crypto is an unproductive bubble

#40

Post by gonehome »

jmcgough wrote: post #19

One of the biggest drawbacks for blockchain is that transactions can't be revoked after the fact (with the only exception being costly forks of the entire ledger), and there's no additional human oversight (like I'd get when sending a large amount of money through a bank) to protect me. If someone steals my credit card, I have my credit card company to give me some level of protection. They can block transactions if…

Banks won’t protect you from wire fraud either.

I’ve written this elsewhere when this topic routinely comes up and crypto is dismissed, but the capability of self-custody is the thing to pay attention to.

Nothing else has this capability to the same extent.

Today we store most of our wealth in assets (market index funds, stocks, real estate, etc.) and some (typically very little, and rarely outside of a bank account) in cash.

Most of this is not actually controlled by you.

With BTC (and cryptocurrency more generally) you have the capability of having your private key in a hardware wallet under your control and retain the capability to transact independently of other institutions.

If you keep some percentage of your wealth here you retain certain advantages that you can't get elsewhere. The closest alternative would be having cash (in cash form), but it's hard to have that much, hard to travel with it (you can memorize your wallet seed words and recreate your wallet on the other side of a border), and cash is vulnerable to government stupidity (see: Russia).

I'm not sympathetic to the Canadian truck protests, but whether or not you care about what they're protesting - it's the capability wielded by the Canadian government over their private finances that's alarming.

All this is to say the focus on what crypto is worse at is kind of missing the forest for the trees.

The capability of a global self-custody capable store of value that can be trivially moved anywhere is a big deal and puts power back in the hands of individuals.

I don't pretend there are no risks with cryptocurrency. The security requirements are obviously harder, the UX is bad and even technical users fuck it up.

Some of this will be improved by tooling, some of it is just what's required for self-custody.

Still, the capability it provides is new and gives individuals more power even with these tradeoffs. That capability is valuable and shouldn't be dismissed imo. It's a lever against authoritarian control and increasing centralization of power.

Post reply on HN