Why I’m Cryptophobic • Hacker News Board

Re: Why I’m Cryptophobic

#51

Post by rvz » Thu, Jun 30, 2022, 2:40 PM UTC

Like the failed removal of all closed-source software called for by the free-software movement towards the likes of tech bros at Microsoft, Google, Meta and many other developer still creating it, the same tech bros are now calling for the complete removal and destruction of crypto screaming for all it to die in a fire (which I'm afraid it simply won't.)

Both the crypto skeptics and the crypto maximalists screaming about their very utopian and absolute ideas are both going to be very disappointed once crypto regulations come around the corner.

Re: Why I’m Cryptophobic

#52

Post by mikeyouse » Thu, Jun 30, 2022, 2:41 PM UTC

ntoskrnl wrote: post #25

mjburgess wrote: post #4

There needs to be some basic economics here.. Money has value because of the value of the economic transactions in which its conducted. Government-backed currencies are forced to have value in the sense they force people to use it for their taxes. The US, additionally, forces the world to use it for oil trades. Value is in those economic transactions. A currency is just a "liquifying" of that value, to make it easier…

Who says BTC isn't used for payments? Many porn sites ONLY allow you to pay with crypto, including PornHub[1], and they're keeping the lights on somehow. It's being used by the Ukrainian military to pay their suppliers while the banking system is offline[2]. It's being used for remittances. I had to pay my rent with it once. Also VPNs, etc. There's far more global economic activity conducted in BTC than in gold. It a…

That's not true for PHub -- Just went to confirm and the first option is bank transfer, the second is crypto. What percentage of people who pay for PHub do you think even own crypto? My guess would be <1%.

Re: Why I’m Cryptophobic

#53

Post by tduan » Thu, Jun 30, 2022, 2:41 PM UTC

I’ve always been supportive and even excited about what the technology promises, but when I reconcile it with any use cases, I simply can’t get behind the valuations we see. Excluding it being the main payment vehicle for banks, institutions, and individuals (I strongly disagree with this prospect), all the other use cases become increasingly niche. BTC at it’s peak was at a 2 trillion dollar market cap. Gold at the same time was ~10-12 trillion. I respect lindyness and 3000+ years of gold being the best store of value, is enough confidence that BTC isn’t gonna be the next big thing - if it aims to replace it.

Re: Why I’m Cryptophobic

#54

Post by welshwelsh » Thu, Jun 30, 2022, 2:41 PM UTC

mjburgess wrote: post #4

There needs to be some basic economics here.. Money has value because of the value of the economic transactions in which its conducted. Government-backed currencies are forced to have value in the sense they force people to use it for their taxes. The US, additionally, forces the world to use it for oil trades. Value is in those economic transactions. A currency is just a "liquifying" of that value, to make it easier…

Imagine a future where the vast majority of work is automated. Most of this is computationally expensive work, such as training large neural networks, and the average program takes a substantial amount of resources to run, comparable to paying a human worker.

In this scenario, labor power has been replaced by GPU power, which can be measured in terms of electricity. Everything from ordering a meal at a restaurant to building a house to designing a new computer system can be measured this way, and the price of everything is tightly coupled to the price of electricity and the price of compute.

Under these conditions, it might make sense that programs/robots would incorporate smart contracts or participate in some sort of generalized proof-of-work system to finance themselves. Running a program would require currency as input to cover the computational cost of actually running the program, even if the program is open source.

That's where I see this going. Traditional currency is great for incentivizing human labor, but the problem is it's not designed to be programmable.

Re: Why I’m Cryptophobic

#55

Post by ramesh31 » Thu, Jun 30, 2022, 2:41 PM UTC

benreesman wrote: post #45

Both the rabid pro-crypto and rabid anti-crypto people seem to be missing that the prices move on the monetary policy of the United Stated Federal Reserve: more visibly the FOMC target guidance, the underwater part of the iceberg is the balance sheet. Global finance is a big deal, to put it mildly. Crypto is a flea on the ass of the foreign exchange market (which it superficially resembles), which is a bacterium on t…

>It’s. Just. Not. That big of a deal.

Yup. Total crypto market cap is less than a couple of large S&P 500 companies. The SNR is just so insane in that community that it seems like a bigger deal than it is.

Re: Why I’m Cryptophobic

#56

Post by hans1729 » Thu, Jun 30, 2022, 2:42 PM UTC

capableweb wrote: post #26

hans1729 wrote: post #13

Earlier quoted context omitted.

That's not right. One: gold is the og currency, it doesn't have to prove its value because it already did. Two: it is also being actively used for transactions, look no further than jewelry. If you have gold, you will find someone who is willing to exchange it for something else with material value in any city on the planet. This is not the case for crypto.

> This is not the case for crypto No? You don't think the following statement is as true as the one you made? "If you have Bitcoin, you will find someone who is willing to exchange it for something else with material value in any city on the planet" My experience would tell me otherwise, but maybe I'm a outlier.

Scenario: a country-wide blackout occurs. You're haggling with local farmers for food. Which has value to them, bits on a hard drive or solid gold?

Re: Why I’m Cryptophobic

#57

Post by benreesman » Thu, Jun 30, 2022, 2:42 PM UTC

mjburgess wrote: post #30

ntoskrnl wrote: post #25

Earlier quoted context omitted.

Who says BTC isn't used for payments? Many porn sites ONLY allow you to pay with crypto, including PornHub[1], and they're keeping the lights on somehow. It's being used by the Ukrainian military to pay their suppliers while the banking system is offline[2]. It's being used for remittances. I had to pay my rent with it once. Also VPNs, etc. There's far more global economic activity conducted in BTC than in gold. It a…

You're right that BTC has a floor because there's some economy behind it. I'd say in the 100USD-1000USD/coin range.

I’ll sell you that contract up to what I can finance it at.

Re: Why I’m Cryptophobic

#58

Post by dcolkitt » Thu, Jun 30, 2022, 2:42 PM UTC

mjburgess wrote: post #4

There needs to be some basic economics here.. Money has value because of the value of the economic transactions in which its conducted. Government-backed currencies are forced to have value in the sense they force people to use it for their taxes. The US, additionally, forces the world to use it for oil trades. Value is in those economic transactions. A currency is just a "liquifying" of that value, to make it easier…

The continued existence of gold as a store of value (and to a lesser extent silver) contradicts this model. Very few economic transactions are denominated in gold, either as a medium of exchange or a unit of account.

There is a small amount of industrial demand, but this is far too tiny to justify gold's gigantic market capitalization. Valued on industrial demand alone gold would maybe worth $100/oz, yet today it trades at $1700/oz. And it has held a lofty valuation more than half a century after all major economies abandoned any gold standard behind their fiat currencies.

The only possible explanation for gold's continued valuation is that it's quite possible for assets to exist as money-like stores of value without necessarily needing to possess a functioning role as a medium of exchange or unit of account. Moreover what we can see is that store of value assets are highly path-dependent. Rhodium has similar properties to gold, yet gold is far more widely used as a store of value. The sole explanation for this is because of gold's historical narrative.

Re: Why I’m Cryptophobic

#59

Post by cowtools » Thu, Jun 30, 2022, 2:42 PM UTC

capableweb wrote: post #26

hans1729 wrote: post #13

Earlier quoted context omitted.

That's not right. One: gold is the og currency, it doesn't have to prove its value because it already did. Two: it is also being actively used for transactions, look no further than jewelry. If you have gold, you will find someone who is willing to exchange it for something else with material value in any city on the planet. This is not the case for crypto.

> This is not the case for crypto No? You don't think the following statement is as true as the one you made? "If you have Bitcoin, you will find someone who is willing to exchange it for something else with material value in any city on the planet" My experience would tell me otherwise, but maybe I'm a outlier.

I think bitcoin is about as difficult to transact as gold, although in ideal circumstances cryptocurrency should be easier to transact than gold.

However, gold has a fundamentally stronger argument for its value. Gold is useful: it has unique physical and chemical properties.

Re: Why I’m Cryptophobic

#60

Post by elil17 » Thu, Jun 30, 2022, 2:43 PM UTC

benreesman wrote: post #45

Both the rabid pro-crypto and rabid anti-crypto people seem to be missing that the prices move on the monetary policy of the United Stated Federal Reserve: more visibly the FOMC target guidance, the underwater part of the iceberg is the balance sheet. Global finance is a big deal, to put it mildly. Crypto is a flea on the ass of the foreign exchange market (which it superficially resembles), which is a bacterium on t…

Crypto has social effects (wasting energy production capacity, scams, wasting computer hardware and chip fab capacity) outside of its economic effects that do make it a big deal.