Crypto is an unproductive bubble

People keep losing money making coding mistakes that even "gcc -Wall -Werror" would refuse to compile. Examples: type errors like L1 vs L2 (whatever that even means, not a crypto person), wrong number of function parameters causing some sort of currying, allowing that massive ETH heist a few weeks back.

I'm sure there are hundreds of other similar horror stories.

"-Wextra -pedantic" would protect against even more bugs.

(I'm not saying C is a reasonable choice, just that JavaScript was a laughably bad choice.)

> Claim 1: Crypto is a Bubble (Confidence: High)

Are stablecoins not crypto? The DeFi built on top of stablecoins and other assets is basically what the market/banks had been doing for a long time (except that everything is transparent, fraud is easier to detect, etc.)

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

This one is easy to refute. A few ways:

1. The point of cryptocurrencies, is that we found that we could use monetary incentives to build and run services that have nothing to do with money. Sure bitcoin was only for transfers, but other projects have explored how to build services on top: smart contracts, identity registry, archiving of the web, file storage as a service, a tor-like mixnetworks, and I'm sure others can point out all sorts of projects.

2. The core of blockchain technology (although not all of it, see next point) is about protocols for distributed systems when faults can be malicious. Distributed systems are used EVERYWHERE, think distributed databases. As threat models are different for every products, why claim that we don't need distributed databases resistant to malicious faults? Banks are the first target of such products, so it's no wonder that cryptocurrencies were invented. Another example is the web PKI, which currently uses protocols like Certificate Transparency which are good are letting you audit your domain names and detect if any attacks have happened after the fact. I bet you that in the next 10-20 years the web PKI will run on a BFT consensus protocol, or an unknown breakthrough solving a similar problem, to prevent attacks from happening, period. And if nobody builds it I will.

3. What is blockchain tech exactly? Because I can tell you that many fields in cryptography have seen INSANE advances SOLELY because of cryptocurrencies: general-purpose zero knowledge proofs, multi-party computation (and threshold cryptography), broadcast protocols, etc.

> Claim 3: Future monetary use of blockchain technology will be minor (Confidence: Medium)

That really depends on regulations, and if they want to kill the beast (and replace it with a non-fault tolerant CBDC). But we're already seeing countries adopting cryptocurrencies (albeit the wrong ones) so I guess it depends on where you'll be in the world. The dream of crypto is really, no matter bitcoin maximalists will tell you, to make payments as easy as sending an email. And without an open standard that everyone can trust, how will this ever happen?

People have been making similar claims about Bitcoin for over a decade now, and meanwhile it is still alive and kicking and shows no signs of slowing down. It is especially useful in places in the world that don’t have easy access to banking and countries where their currencies are being debased. I encourage you to watch this video if you have any interest in challenging your beliefs:

https://youtu.be/1rbu32PO5jY

You shrug crypto off as not being “genuinely innovative” which I think shows a big lack of understanding. Personally, I think the invention of Bitcoin is perhaps the greatest innovation since the internet itself. It cannot be understated how powerful it is to create money whose supply cannot be controlled by a central institution or power. This is the kind of invention that could literally change the world (and likely will).

Your second point in claim 3 is the exact talking point used by the Federal Reserve and other central banks. I think this represents an extremely narrow view of the world. Look at the US dollar which is dangerously on the verge of falling into an inflationary spiral. If you feel safe keeping your money in dollars then godspeed. I personally feel very unsafe given the current political climate. The dollar has lost over 99% of its purchasing power since the creation of the Federal Reserve and the current strategy of printing more money to solve every problem has been much more of a “detriment to people’s lives and livelihoods” than the gold standard ever was. You should research The Cantillon effect which seems to be more and more relevant in today’s economy.

An alternative to the boom and bust narrative is that the banking elites of that time period created the boom and bust cycles themselves through control of the gold supply in order to lobby and justify the creation of a central banking system that would benefit them and ensure that if they ever got into a pinch they could bail themselves out by having easy access to the money spigot. Remember history is told by the victors.

I agree with you that governments are unlikely to let go of control over monetary policy and won’t do it willingly or eagerly, but I think it is already too late for them to kill Bitcoin. They can cut off exchange access to buy and sell for dollars, but by forcing people to use dollars and cutting off access to crypto, I think it will actually expedite people’s willingness and acceptance of crypto. People and businesses will start accepting crypto directly for payments. It will take a long time for this to actually materialize in the real world because there are so many people like you who have such a narrow-minded view of crypto, but when you are faced with accepting a currency that is losing 10-20% of its purchasing power every year, or accepting Bitcoin, eventually people will understand that Bitcoin is the better money.

I expect to receive an onslaught of downvotes for this reply and going against the grain, but so be it.