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Why I’m Cryptophobic

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Re: Why I’m Cryptophobic

#211

Post by soVeryTired »

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…

It’s not obvious to me that transactions are the key here.

Suppose I want to buy something online using crypto. I buy up $X worth and transfer it to the vendor. They transfer whatever it was that they bought, but they immediately redeem the bitcoin for $X, give or take a small amount from market moves.

There’s no net demand for crypto here, and the increase in crypto price from my purchase will roughly be offset by their sale.

I think the only way to explain crypto prices is through buyers hoping that they’ll be used as a store of value. I don’t agree with that, but that’s a different story.

Re: Why I’m Cryptophobic

#212

Post by benreesman »

elil17 wrote: post #60
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.

You’re seriously here to make the case that these basis points on the numbers that move real human beings around like pieces on a chessboard is why HN foams at the mouth over cyber-money?

The energy cost is debatable (energy displacement is complex), the ASICs used to mine BTC are keeping someone’s Verilog sharp, and scams? There are 17 payday loan places in a 3 mile radius of my house, not counting pawn shops.

This is not enlightened humanitarianism.

Everyone on here knows an annoying asshole who rubs it in everyone’s face that they’re generationally wealthy over a speculative bet in 2015.

I fucking hate intellectual dishonesty. Especially from smart people.

Re: Why I’m Cryptophobic

#213

Post by marcosdumay »

yellowapple wrote: post #164
mikeyouse wrote: post #157

Earlier quoted context omitted.

Right - as a commenter on a technical forum - how much overlap do you think there is between yourself and the age/infosec knowledge/technical savvy of the type of person who pays for PHub in 2022?

Doesn't really make much of a difference; "only give your banking info to those you highly trust and only if it's absolutely necessary" has been common sense for longer than the Internet has existed.

You mean your name and bank account number?

Those are basic for doing business. People share them with everybody they deal with.

Re: Why I’m Cryptophobic

#214

Post by avivo »

syzygyhack wrote: post #98
avivo wrote: post #18

There is also a rebuttal article by the same fund: https://www.bvp.com/atlas/the-antidote-to-cryptophobia/ That said, I think Adam (the original article) is closer to being right. He doesn't even get into the thing that originally made me incredibly excited about the potential of blockchain tech—the way it lets one create a new sort of custom and irrevocable 'physics' for information and incentives. But the same irre…

> But the same irrevocability is now what makes me deeply concerned. Strange hang-up to have. Irrevocability is not a trait that is fundamental to blockchain applications. If the application is smart-contract based, irrevocability is a choice at the source code level. Just because one transaction in a block is irrevocable doesn't mean that another transaction in a future block can't undo whatever arbitrary state chan…

It is a choice at the software later. And who is making that choice? It's the initial people who actually write that software.

But what if that system is now affecting many other people, or the entire planet in a significant way? Should they have some voice over that?

Under a traditional governance regime the answer is that that is at least possible to change. It may be difficult, but it does not violate the laws of physics and can happen in less time than the heat death of the universe. But we can now write software that makes it functionally impossible for anyone to make that choice, even potentially the original designers. That is an option that we did not have before. It's in some sense the essence of trustlessness.

In some cases, this might be the right trade-off. For example, beyond the blockchain, this is also a way to think about encrypted communications. It is a very significant new power that we can now wield.

But it must be wielded carefully, and that doesn't seem to be happening.

So yes, blockchain applications don't need to be irrevocable. But the ability to make them so is something that could have a very significant implications—potentially negative.

As a somewhat tongue in cheek example, but with a little bit too much reality to be comfortable, this irrevocability might allow you to "create" a paperclip maximizer DAO (incentivized at the social layer, with humans doing the work).

Re: Why I’m Cryptophobic

#215

Post by enaaem »

datadata wrote: post #166
enaaem wrote: post #101

Earlier quoted context omitted.

Fiat is indeed based on trust. The trust that the government remain functioning. Fiat is a government backed claim on economic production. That’s not trivial, because the government is the sole arbiter and enforcer of property rights. Fiat determines what resources you can legally assign to you, according to the rules of the sole arbiter of property rights. The notion of property rights is only relevant with a centra…

> The notion of property rights is only relevant with a central authority who is able to enforce it. The innovation of bitcoin is precisely making this statement no longer true. The "property" might only be digital data, rather than physical things, so you can argue that it is no longer true in only a limited context, but it is not longer absolutely true.

Absolute truth is not relevant because 99.99% of what you need to sustain yourself is physical. It’s practically 100%.

Maintaining BTC itself requires physical inputs and physical property rights. You need fiat to buy energy. Your house with mining rigs needs enforcement of property rights.

Re: Why I’m Cryptophobic

#216

Post by benreesman »

Ologn wrote: post #133
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. There are trailing indicators and leading indicators. The fact that something like Dogecoin can be invented as a joke (according to its investors) and be said to have a market cap of over $8 billion is an indicator - that's 8 "unicorns". Bitcoin's market cap is over $350 billion. You are right that it has to be seen in the context of global finance, but other parts of global fin…

So trade it!

Anyone who talks about market price action in the short/medium-term a priori doesn’t have alpha. People with Alpha trade it.

Re: Why I’m Cryptophobic

#217

Post by marcosdumay »

enaaem wrote: post #101
rvense wrote: post #41

Earlier quoted context omitted.

As far as I can tell, money is so entirely based on trust that it might as well consist of it, trust in in some fuzzy combination of other people's continued rationality and things staying roughly the same. I accept 100 euro bills for my labour because I believe I'll continue to be able to trade them for food and shelter.

Fiat is indeed based on trust. The trust that the government remain functioning. Fiat is a government backed claim on economic production. That’s not trivial, because the government is the sole arbiter and enforcer of property rights. Fiat determines what resources you can legally assign to you, according to the rules of the sole arbiter of property rights. The notion of property rights is only relevant with a centra…

Gold was based on trust. Trust that the next merchant you deal with will want it.

The same was true for salt, and many more local kinds of money that existed.

It's also the same trust you need for fiat money. This, and trust that your government won't create a huge lot of it in an instant (slow rates of money creation are fine). Turns out that governments have a lot of leverage to enforce the first, more relevant kind of trust, so the total trust required decreases.

The idea of cryptocoins was to remove the trust on nobody creating a lot of money very fast. But in doing so, they also lost the leverage to enforce that people will accept it.

Re: Why I’m Cryptophobic

#218

Post by px43 »

benreesman wrote: post #205
dmoy wrote: post #187

Earlier quoted context omitted.

You completely ignored what GP said. The floor is different from what people will sell it to you for right now. AMZN may have a floor of $ASSETS / #SHARES (or something, I just made that up), but that doesn't mean anyone will sell it to you for that right now.

Anyone can invent quasi-financial terms to make grandiose claims. The beauty of the market is that loudmouths don’t participate in the market for long. I’ll sell an American-style options contract to someone who thinks BTC is going anywhere near there at Black-Scholes -75. And I’ll have no trouble financing it. You want the other side?

Shh.. you're scaring all the people who think their computer science degree gives them exceptional insight into how money works.

Re: Why I’m Cryptophobic

#220

Post by hinkley »

smt88 wrote: post #43
solotronics wrote: post #6

Earlier quoted context omitted.

Gold having value over a long period of time is a counter argument. Nobody is transacting in gold yet it is valuable.

Gold has thousands of years of history as a currency (or backing a currency). It's also intrinsically valuable for jewelry and industrial purposes. It's irreplaceable in electronics, for example. Cryptocurrency that can't be sold to someone else has absolutely no value. In fact, it has negative value because of transaction fees, something that plain cash doesn't have. I can send someone $100k with a $0 transaction fe…

Gold also has enough value as a material to both lift the value of it and complicate the making of things with it.

First silver, then gold, then platinum, now palladium and rhodium have ridiculous values associated with them.

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