Live data from Hacker News

In defense of cryptocurrency

blog.cryptographyengineering.com

61–70 of 578 posts

Re: In defense of cryptocurrency

#61
post #55

Earlier quoted context omitted.

He says why he cares are the end. That it could be a viable payment system, if you solve the scaling and energy and regulation and a few other things.

It does not sound plausible that all of this engineering, required to make these systems even viable in the real world (and, we hope, preventing it from eventually demanding approximately as much energy as Eastern Europe, despite the weak incentives to actually accomplish that) is the best, fastest way to lower transaction fees for the working class.

No disagreement from me. He seems to think it could be viable.

I've seen a few high profile cryptographers get into the crypto space recently. I can't really blame them, it's exciting to see new cryptography put into practice. Who knows, maybe they will solve it all, but I doubt it personally.

Re: In defense of cryptocurrency

#62

Earlier quoted context omitted.

I was waiting for this comment. I was going to preemptively write the acknowledgment and rebuttal to this in the earlier post but I didn't want to be accused of posting a "strawman argument", by different people, or maybe the same people that would chose to pretend they weren't going to say exactly what you did. Basically, the idea of "zero-sum energy" is incorrect. So the disdain for Bitcoin/Proof-of-work using any…

> There is plenty of energy currently out there, currently being wasted for decades, that would cost more to store, and cost more to transport. (...) While proof-of-work can (and does) use it directly on the spot. These are often remote, low infrastructure, areas and so unlike other computationally intensive things, such as a data center this remain almost (or completely) theoretical, vast majority of POW wastes perf…

it's not theoretical and I expect it to also become a larger percentage or the network over the next few years.

it occurs mostly for economic reasons, it is somewhat accelerated by the common criticism but ironically mostly irrelevant while getting to the same outcome either way

grid-reliant proof of work is probably going to get deprecated. (remote sites typically can connect to a grid to sell their own excess energy though, they still wouldn't be reliant. when the state will pay more that day than what the operator will make mining, they just turn off the miners and sell that energy that day, but won't draw from the grid themselves. from the site operator, these are all just logical verticals that move towards lowered environmental impact)

Re: In defense of cryptocurrency

#63
This is a genuine question. Is there a defense of cryptocurrencies that doesn't follow the pattern of, "yes, that is indeed true, however here is an edge case or counterexample which either doesn't exist yet, or is not in wide use so it's not actually a problem"?

Every article or comment defending cryptocurrencies has followed this pattern and it isn't convincing to me. I'd love to have my mind changed, but when every rebuttal follows the same script, I remain am unmoved.

Re: In defense of cryptocurrency

#64
post #55

Earlier quoted context omitted.

It does not sound plausible that all of this engineering, required to make these systems even viable in the real world (and, we hope, preventing it from eventually demanding approximately as much energy as Eastern Europe, despite the weak incentives to actually accomplish that) is the best, fastest way to lower transaction fees for the working class.

No disagreement from me. He seems to think it could be viable. I've seen a few high profile cryptographers get into the crypto space recently. I can't really blame them, it's exciting to see new cryptography put into practice. Who knows, maybe they will solve it all, but I doubt it personally.

I'm not disputing the claims the article makes, I'm just saying: it's not an especially persuasive reason to support cryptocurrency; if the problem is simply "bring transaction costs down for the working poor", there are much simpler ways to do that. Meanwhile: the cryptocurrencies we have today are causing ongoing harm.

Re: In defense of cryptocurrency

#65
post #25
post #4

Earlier quoted context omitted.

Not really...the fees for Bitcoin, Ethereum and other L2 options are flat fees and are well under Visa/MC fees most of the time. Might want to look at Western Union and the like too...way way under those fees. Current transaction fee (for 1 cent or a billion dollars) Bitcoin - $1.62 per transaction Ethereum - $3.50 per transaction Ethereum L2 - as low as 12 cents https://l2fees.info/ Here are credit card fees by comp…

L2 is pushing the problem a bit further away, but it's not a long term solution. All L2 solutions in existence are fundamentally centralizing (it doesn't have to be, but it's a lot harder and since most cryptocurrency speculators don't actually care about centralization it's much easier to do it that way, and L2 solutions are already super complicated anyway) and they only offer a maximum theoretical transaction coun…

A while back I googled the number of transactions per second for the various types of payments in the US, and it came to less than 100K tx/sec, including credit, debit, cash, checks, wires, and ACH.

Rollups on Ethereum today can handle a couple thousand tx/sec, and the sharding system they have planned will boost that by about a factor of 200. These systems are somewhat centralized for block production but fully decentralized for verification.

Having had to spend time more than once physically visiting bank branches to send wires, or wait for days to get checks to clear from one bank to another, I'm not convinced that today's solutions are all that impressive. They don't exactly seem simple, either.

Re: In defense of cryptocurrency

#66
post #4

Earlier quoted context omitted.

Not really...the fees for Bitcoin, Ethereum and other L2 options are flat fees and are well under Visa/MC fees most of the time. Might want to look at Western Union and the like too...way way under those fees. Current transaction fee (for 1 cent or a billion dollars) Bitcoin - $1.62 per transaction Ethereum - $3.50 per transaction Ethereum L2 - as low as 12 cents https://l2fees.info/ Here are credit card fees by comp…

Credit card fees include reward systems (points), zero liability fraud protection, extended warranties, car rental protection, dispute resolution/chargeback systems, customer service, support for tens of thousands of transactions per second, airline lounge access, priority entertainment tickets, airline miles - the list goes on and on. Whether you need any of these is debatable of course but it’s extremely disingenuo…

You don't pay for the fees...the vendor does. Not to mention all of the other fees they rake in.

You can have other ways of making sure payments are safeguarded...actually one of the smartest ways to do this was setup on the dark web illegal markets where there was a middle man that didn't have custody of the money (at least in the best multisig ones) but was able to complete or reverse transactions if needed. Basically an escrow account...

https://darknetone.com/understanding-multisig-vs-escrow-vs-f...

Re: In defense of cryptocurrency

#67
post #28

Cryptocurrency don’t need defense. I think that people outside of cryptocurrency communities don’t realise how accepted the technology is within them. HN is being misled into thinking they are widely hated

Accepted in what sense? Everyone I know who is involved with cryptocurrencies is so for “investment”, not for other kinds of usage.

Accepted as a speculation asset, yes

Re: In defense of cryptocurrency

#68
> "The top credit-card merchant fee actually rose in the United States between 1991 and 2009, and this is a goddamn tragedy, since these fees are baked into the cost of most retail goods and thus born by the working poor (who pay them even if they use cash.) . . . Why are these IT-focused industries so consistently immune to the same technological improvements and cost reductions we see everywhere else?"

The simplest apparent answer is that this (the provision of payment services) is not a competitive market and as small retailers have nowhere else to turn, they're forced to pay high rents to what would have been called a trust in late 19th century Gilded Age terminology.

The solution is also fairly clear: if you have what's called a 'natural monopoly' then it should be state-owned and state-managed (see the network of roads, water pipes, etc.), and if it's not actually a natural monopoly - meaning a system where competition doesn't make sense, i.e. having multiple networks of privately owned roads is silly - then you need anti-trust actions by the government to foster competition in the industry, which would reduce fees and costs for merchants.

Arguably, if consumers had to pay the cost of transactions, rather than merchants, you might seem a lot more political pressure to make credit/debit card transactions the same cost as cash transaction, i.e. no added cost.

Cash is a government-supplied taxpayer-supported service supplied free of charge for merchants and customers, so perhaps that's the best option for the credit/debit interface as well. Of course, this would allow government to track everyone's individual non-cash purchases, but then they already have access to the credit/debit ledgers, don't they?

Re: In defense of cryptocurrency

#69

Cryptocurrency don’t need defense. I think that people outside of cryptocurrency communities don’t realise how accepted the technology is within them. HN is being misled into thinking they are widely hated

The truth is they’re completely irrelevant to 99% of the internet population. Pick the top 20 coins. Look at their respective block explorers and check tx/day, unique address/day, etc. You’ll quickly come to the conclusion that maybe 100M people actually use cryptocurrencies in any meaningful way. The internet has 5B users. Cryptocurrency use is irrelevant. The cryptocurrency debate in technical circles reminds me of…

There are huge crypto.com ads plastered over every F1 track, I don't think this is extremely obscure stuff. I've encountered a lot of non tech people who own crypto. I saw some number somewhere that estimated that around 17% of Ukrainians own crypto, with similar numbers for other countries. The idea that it is an extremely obscure thing also seems like a function of being in a HN tech bubble. There are crypto ads and exchanges everywhere

Re: In defense of cryptocurrency

#70

This article is a rebuttal to a letter, that in his interpretation, claims: >[...] that the entire technology field is worthless and cannot be used for any practical purpose. However, instead of addressing the core issue of whether cryptocurrency or DLT serves any practical purpose, the article instead cherry-picks specific issues that he thinks are resolvable: * Energy waste * Transaction speed * Privacy The author…

>Why doesn't he provide a real world use case for DLT? I'm still waiting for that.

As you yourself say, they are talking about cryptocurrencies. Cryptocurrencies are money. Digital money is a practical purpose.

This is the letter:

>After more than thirteen years of development, it has severe limitations and design flaws that preclude almost all applications that deal with public customer data and regulated financial transactions and are not an improvement on existing non-blockchain solutions.

They claim the limitations and design flaws make blockchain inferior to existing solutions. The author is arguing that the limitations and design flaws have been or will be overcome.

Post reply on HN