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Crypto is an unproductive bubble

alexkolchinski.com

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Re: Crypto is an unproductive bubble

#121

Post by Nextgrid »

gonehome wrote: post #70
lern_too_spel wrote: post #65

Earlier quoted context omitted.

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.

You just need to control the onramps and offramps.

Bitcoin is of no use if you can't exchange it for anything tangible.

Re: Crypto is an unproductive bubble

#122

Post by ThomPete »

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…

you mean like any other physical asset?

Re: Crypto is an unproductive bubble

#124

Post by i_like_waiting »

jmull wrote: post #89
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)…

This is typical crypto-hype. Notice that although many points are raised, it doesn’t address the direct objections of the previous post. Obfuscate, misdirect, and confuse the marks.

Thats because nobody refutes those points. Yes, transactions in crypto are irreversible. It might be bad for those number of factors.

But even given those cons we see benefits in things mentioned above. E.g. my colleague can send bitcoin to his brother in russia. Tell me what other options to transfer value there are at the moment between west and russia. Very similar for ukraine.

Re: Crypto is an unproductive bubble

#125

Post by gonehome »

Nextgrid wrote: post #115
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)…

> you can memorize your wallet seed words and recreate your wallet on the other side of a border Governments can trivially prevent this if they wanted to. Bringing your wallet along will be of no use if nobody dares to transact with you because they themselves will then need to explain the source of their newfound wealth. The current ability of crypto to (sometimes) escape government oversight is temporary and only e…

A United world government could non-trivially prevent this (though enforcement would still be difficult at the individual level). We don’t have that though, and in practice today it’s useful in order to escape authoritarian dictatorships.

The specific case I read about was someone escaping the Russian occupied areas of Ukraine this way: https://www.forbes.com/sites/tatianakoffman/2020/06/13/why-b...

It’s also more common in countries with bad currencies and limited access to USD (Venezuela).

You’re right it’s not perfect, but it gives more power to individuals than the alternatives. It’s also possible something like Zcash could allow individuals to transact despite an all seeing panopticon, but I don’t know how that works well enough to have a strong opinion.

Re: Crypto is an unproductive bubble

#127

Post by smaudet »

jmull wrote: post #89
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)…

This is typical crypto-hype. Notice that although many points are raised, it doesn’t address the direct objections of the previous post. Obfuscate, misdirect, and confuse the marks.

The big problem is the buying anything with it.

If you could buy stuff with it and it wasn't an absolute headache (install app, pay transaction fees) and it was easier, it would be more popular.

That would also remove the "it's a speculative asset bubble" problem.

For the interim, using it as a private bank, assuming you can cache it out at an exchange for local legal tender, is the next best thing.

The only true way to make it a currency is for it to have its own country - bunch of people somewhere decide to use it for all their stuff, trade goods and services. Problem with that OFC is a lack of free land and energy.

So maybe when we live in space, and need a long term store of value, but don't really want to carry around bars of gold or platinum, it can have some serious uses. Until them it is exactly like buying oil - technically asset trading but really hard to realize the value in any meaningful way.

Re: Crypto is an unproductive bubble

#128

Post by StanislavPetrov »

Tijdreiziger wrote: post #81
StanislavPetrov wrote: post #68

Earlier quoted context omitted.

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.

If you take this argument to its logical conclusion, anarchism is the only form of free government. All laws and regulations necessarily take freedom away. That is the basis of the social contract: you aren’t free to harm others.

If you take this argument to its logical conclusion all laws and regulations are good and freedom does not exist. In reality the definition of "harm" and the laws and regulations that are necessary and desirable to mitigate these harms are very much up for debate.

It is nakedly authoritarian for the government to restrict, at the point of a gun, consenting adults from choosing their own method of transaction.

Re: Crypto is an unproductive bubble

#129

Post by godelski »

dist1ll wrote: post #105
godelski wrote: post #90

Earlier quoted context omitted.

I think what a lot of people miss is that cryptocurrencies are different than blockchains. But also that cryptocurrencies can both work exactly like modern money (opposed to cash) but that this system is still new (e.g. DeFi: Decentralized Finance). Not only can you do smart contract escrows, but there's nothing stopping anyone from doing DeFi and having the exact same functionality as a credit card. You can also tak…

Yup, hit the nail on the head. A related thing that's bonkers to me is how much progress there has been in ZK cryptography. But people just dismiss the field, saying "ZK existed since the 80s it's a fad", and post yet another Bruce Schneier article.

ZKPs are actually one of the "spin-offs" I've been really excited about. The hype in CC/BC has caused more funding and research into that area. It really has been a recent golden era for cryptography. We have services like Signal and Matrix becoming popular (making cryptographic communication simple) and privacy is being taken seriously. Makes sense that people want to do the same with money/transactions.

But also, to be clear, it is hard to separate the signal from the noise. Especially with hyped subjects like CC/BC.

Re: Crypto is an unproductive bubble

#130

Post by rvz »

Nextgrid wrote: post #115
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)…

> you can memorize your wallet seed words and recreate your wallet on the other side of a border Governments can trivially prevent this if they wanted to. Bringing your wallet along will be of no use if nobody dares to transact with you because they themselves will then need to explain the source of their newfound wealth. The current ability of crypto to (sometimes) escape government oversight is temporary and only e…

> The current ability of crypto to (sometimes) escape government oversight is temporary and only exists because it's currently a rounding error in the grand scheme of things, but I can guarantee you it will be cracked down on.

Indeed. By regulating the transparent cryptocurrencies and banning privacy coins from exchanges like Monero and MobileCoin which is how the criminals and scammers cash out their ransomware money into fiat currencies.

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