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Crypto is an unproductive bubble

alexkolchinski.com

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Re: Crypto is an unproductive bubble

#61

Post by pornel »

jka wrote: post #27

Cryptocurrencies and web3 demonstrate promise as ways to escape from the VC-funded walled gardens that are more typical of previous eras of the web. Ironically that means that excessive amounts of money are being thrown at them in order to obtain any kind of small angular velocity towards funders that believe they can capture the next generation of the market -- or simply to prevent it from happening, for those with…

You’re merely replacing old masters with new. There’s a ton of VC money flowing into “web3”, because they’re replaying the same game of adding a service on top of an open protocol to capture and centralize it.

Re: Crypto is an unproductive bubble

#62

Post by benreesman »

Aunche wrote: post #54
benreesman wrote: post #43

How many times are we going to have this conversation? Yes crypto is an asset bubble, alongside equities, real estate, precious metals, you name it. Money printer go brrrr, more dollars are chasing the same amount of Apple sells iPhones. Crypto has no intrinsic value, it pays no dividend and doesn’t give you proxy rights, just like all the tech equities. Proof of work burns a lot of electricity, though this is compli…

>Crypto has no intrinsic value, it pays no dividend and doesn’t give you proxy rights, just like all the tech equities. Tech companies return money to their investors via buybacks. Most investors prefer this as they get to choose when they get taxed.

Some do, Apple is notable for this. If Uber’s done one I missed it.

FTX burns FTT when they have a good quarter, with roughly the same zero accountability to do so as a FAANG with a God Emperor CEO running a dual-class share structure.

Neither of these things are backed by guys with guns who come to your house if you fail to pay taxes in them.

Re: Crypto is an unproductive bubble

#63

Post by StanislavPetrov »

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…

>If someone steals my credit card, I have my credit card company to give me some level of protection. They can block transactions if they think it's stolen, and if I report it as stolen I can claw back money from fraudulent purchases.

The credit card company can also unilaterally decide to block your purchases if it thinks you have become a bad credit risk or if you donate to a frowned upon political cause or any other reason they arbitrarily decide.

Re: Crypto is an unproductive bubble

#64

Post by cco »

UncleMeat wrote: post #51
gonehome wrote: post #40

Earlier quoted context omitted.

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)…

> Banks won’t protect you from wire fraud. They will if you didn't initiate the wire. If you typed the wrong account number then you are SOL, but that's true of BTC too.

That isn't true in my experience at a, "lot of money" scale. They will help you set up the transaction, confirm the receiving party, test and prove the transfer, execute it.

There are also courts etc to get involved, if someone sends you a million dollar wire and you keep it (for no services rendered), courts generally don't let you just have it (cross border caveats etc).

Re: Crypto is an unproductive bubble

#65

Post by lern_too_spel »

gonehome wrote: post #40
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)…

As Warren's bill shows, Bitcoin won't protect the truckers from sanctions either. If whatever you have custody of can be demonetized, does the custody even matter?

Re: Crypto is an unproductive bubble

#66

Post by anonporridge »

babypuncher wrote: post #49
anonporridge wrote: post #31

Earlier quoted context omitted.

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…

But bitcoin isn't being billed as a value-store like gold, it's being sold more as a replacement for payment systems like credit cards, ACH transfers, or PayPal. There is a reason nobody goes around trading tiny bits of gold for goods and services. It is useful to have an abstraction that makes transactions easier and helps mitigate risk.

You're exactly wrong in my experience.

Maybe some people were hyping it as a PayPal replacement back in the pre-2017 days, but that narrative has largely failed to gain followers and is now very out of favor.

The digital gold narrative and layer one of the new global, open, permisionless, and fair financial system narrative have been big and growing ever since I got involved in 2015ish.

In fact, it was only the emergence of the lightning network that proved the layered system approach that has made me consistently bullish for these past 7 years. If we had to scale payments on the base blockchain's 7tps limit, it would absolutely be an absurd, silly speculative bubble doomed to collapse.

Luckily, the layered approach is proving itself and winning.

Re: Crypto is an unproductive bubble

#67

Post by acjohnson55 »

chizhik-pyzhik wrote: post #15

The following things can both be true: - a technology that solves coordination among untrusted parties can be useful - the early usecases for blockchains are mostly profiteering and rent-seeking

The problem is we may have already seen all of the most interesting applications, and they're just not that impressive. Almost everything that's gotten any amount of buzz in the smart contract blockchain world was predicted in the Ethereum whitepaper. It may have just been a remarkably impressive dredging of nearly everything of value in a small pond.

Re: Crypto is an unproductive bubble

#68

Post by StanislavPetrov »

babypuncher wrote: post #42
throw0101a wrote: post #29

Earlier quoted context omitted.

> 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. I believe this is viewed as a feature in the blockchain / cryptocurrency world.

They view it as a feature, but for all the reasons this poster pointed out, the rest of us view it as an anti-feature.

That's the beauty of the concept of freedom. In a free society, we'd all be able to choose our own poison. Unfortunately, many who view it as an anti-feature seek to prevent those who view it as a feature from making their own choice, either through regulation or outright bans.

Re: Crypto is an unproductive bubble

#69

Post by exolymph »

daenz wrote: post #6

I have a hard time imagining how your normal everyday people would put any faith whatsoever in crypto. It's another step removed from "just a bunch of numbers in an account" (current banking) that is even harder to explain and justify. Why should they trust it? So how can it succeed if everyday people don't want to use it?

Flip it. Why should they trust anything else? They don't, so crypto being untrustworthy doesn't particularly stand out from the stock market, where you can also easily fuck up and lose your shirt without ever quite understanding what you've gotten into. See: options.

Re: Crypto is an unproductive bubble

#70

Post by gonehome »

lern_too_spel wrote: post #65
gonehome wrote: post #40

Earlier quoted context omitted.

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)…

As Warren's bill shows, Bitcoin won't protect the truckers from sanctions either. If whatever you have custody of can be demonetized, does the custody even matter?

I don’t know the content of the bill, but it’s a matter of degree.

It’s harder to control your transactions when you have self-custody. It requires a higher level of coordination.

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