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Is this the end of crypto?

economist.com

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Re: Is this the end of crypto?

#211

Post by P5fRxh5kUvp2th »

bnralt wrote: post #191
P5fRxh5kUvp2th wrote: post #106

Earlier quoted context omitted.

When bitcoin first came onto the scene I personally knew a guy who was running a website to act as an exchange. It was small because bitcoin itself at that time was very small. Then bitcoin had its very first dip and it became unprofitable to mine bitcoins. When that happened he shuttered the website and kept everyone's bitcoins. I knew of bitcoin early on due to this guy, but even then I had no interest and consider…

> If the value of gold crashes it still has an inherent value because it's a useful physical good (looking pretty is not the only application of gold). The value of gold is protected by the fact that the majority of it's holdings (at least, according to this[1]) aren't used for speculation. Still, a good chunk of them are, which means there can be pretty huge swings and it's considered a poor investment. Have tried t…

No post body was provided.

Re: Is this the end of crypto?

#212

Post by pa7x1 »

Victerius wrote: post #16
Laaas wrote: post #10

The mainstream response to this debacle is a bit incomprehensible. FTX was the antithesis of cryptocurrency; it was a centralised exchange, that was also trying to become a bank, and was AFAICT trying to kill DeFi [0]. The failure/success of FTX has no relation to the soundness of cryptocurrency. I do however hope that this crash means fewer people will speculate on the prices such that it can finally stabilise a bit…

> FTX was the antithesis of cryptocurrency No true scotsman. "The USSR wasn't real communism." What cryptocurrency could be or should be in an ideal world is irrelevant. If cryptocurrency fails to live up to its ideals, it may be because these ideals are impossible to fulfill. That could be due to technological limitations, human nature, or something else. And in this case, we have no choice but to judge crypto for w…

I get the point and I can understand how it can feel like that from the outside. But the same people that are saying that FTX is not crypto now, were saying it before and same applies to Coinbase, Kraken, Binance... Luna and Terra were crypto, though, economically unsound design with Ponzi economics but crypto. And the litmus test is actually super simple and foolproof. Does whatever you are doing settle a transaction in a public, tamper-resistant ledger that is cryptographically verifiable? FTX business and operations does not involve such a thing. It's a traditional corporation, established in the Bahamas, running some SQL/noSQL DB or perhaps more likely paper napkins as a system of record... And as such was vulnerable to the same kind of abuses that have plagued financial fraud forever.

Here is actual projects that are implemented in a blockchain:

- A exchange, e.g. Uniswap: https://uniswap.org/

Here is a smart contract that executes its transactions: https://etherscan.io/address/0x68b3465833fb72a70ecdf485e0e4c...

You can see the transactions live. You can see the code that runs this exchange: https://etherscan.io/address/0x68b3465833fb72a70ecdf485e0e4c...

- Lending and borrowing, e.g. Aave: https://aave.com/

- Decentralized staking, e.g. RocketPool: https://rocketpool.net ...

Nothing of this has failed. It's working 24/7 without maintenance windows. Everything is on-chain, publicly verifiable, automated and involves no humans.

Re: Is this the end of crypto?

#213

Post by aww_dang »

danaris wrote: post #199
azangru wrote: post #155

Earlier quoted context omitted.

> When that happened he shuttered the website and kept everyone's bitcoins. > I knew of bitcoin early on due to this guy, but even then I had no interest and considered it bullshit. Then when I saw what this guy did it just solidified my opinion that it can't be trusted. But isn't it instead an early lesson in "not your keys not your coin" maxim that Bitcoin advocates preach? > If the value of gold crashes it still h…

> "not your keys not your coin" maxim that Bitcoin advocates preach? I keep seeing this phrase crop up throughout the past several days of cryptocurrency news, and something always rubbed me the wrong way about it, but I couldn't put my finger on it until today. It's demanding a change in human nature to accommodate the system, rather than changing the system to accommodate human nature. It's really not that differen…

Self-custody means users withdrawing their coins from exchanges or other custodial services.

>"Well, of course your accounts got hacked, because you didn't create a separate 27-character totally random password for every single account you need, like I do, and never store those passwords anywhere except your head!"

The keys can be recorded as a seed phrase. Typically this is a sequence of dictionary words. Look into it before you dismiss it so flippantly. Things have come a long way to make things easier for the user. There are also dedicated hardware wallet devices for key storage.

If you're not transacting or conducting business with cryptocurrency, why do you care so much? It is literally none of your business. Nobody is forcing you to pay taxes or finance wars with BTC.

Re: Is this the end of crypto?

#214

Post by efficax »

olalonde wrote: post #120
mjburgess wrote: post #9

This is just such an awful betrayal of their mission. The Economist should know better, and everyone I have spoken to which is senior in their readership does know better. This is still a pro-crypto-scam article. They repeat the same scam-artist lies, crypto is somehow an innovation in "trust", somehow more "efficient" than existing infrastructure, somehow "smart contracts" are more reliable than actual contracts. Th…

I'm sorry but no one in their right mind will come away from this article thinking that this is a "pro-crypto-scam" article. The article is actually very critical. > The problems blockchains solves are highly academic csci issues around "trust" and "programming" in absurdly distributed systems. They have nothing to do with trust, risk, contracts, ownership or rights in anything like an economic, political or moral se…

imagine you have a smart contract that says A promises to pay B X when they complete task Y. If task Y is not representable on-chain, how do you execute the contract? How do you certify that the thing Y was done exactly as expected? There are very few meaningful things that you could slot in for Y that would not require some kind of out-of-chain verification. Say B says I did Y and A says, sorry, you didn't. How does B get their money, etc. They need courts, notaries, trusted fiduciaries. At which point, why did you have a smart contract anyway?

Re: Is this the end of crypto?

#215

Post by mjburgess »

olalonde wrote: post #203
mjburgess wrote: post #196

Earlier quoted context omitted.

We are largely in agreement as you concede my points. But you want to retain this word as applied, eg., to bitcoin. The sound of rain falling is neither "centralised" nor "decentralised". It isnt the kind of thing which could be either *in the relevant sense of the word*. When we talk about centralisation in economics and politics we arent talking about where databases are. Bitcoin is as centralised *a system* as any…

> We are largely in agreement as you concede my points. Concede would mean that I changed my mind. I didn't. You said some true things but which are irrelevant to your original claim. > When we talk about centralisation in economics and politics we arent talking about where databases are. Perfectly agree (as I thought I had made abundantly clear in my previous comments). I'm sure for example that Paypal has databases…

Central banks only "control" money in the sense that they have been granted the exclusive monopoly by the state to provide banks with it (and so on).

The state has not taken any view, yet, on who should have such a monopoly on crypto; but they can. Defacto monopolies exist in the form of the two mining companies.

This is all extrinsic to crypto.

Likewise, literally printing paper money is "decentralised". There's nothing about the present technology of "fiat" money any more or less "decentralised".

What you're talking about is how the state grants monopolies. And, as far as that's concerned, crypto will not fair well in that regard -- not at all!

Re: Is this the end of crypto?

#216

Post by danans »

throwup wrote: post #189
danans wrote: post #154

Earlier quoted context omitted.

You excluded the first part of that paragraph: > We show that the vast majority of Bitcoin transactions between real entities are for trading and speculative purposes. Starting from 2015, 75% of the real bitcoin volume has been linked to exchanges or exchange-like entities such as on-line wallets, OTC desks, and large institutional traders. So 75% of the transactions are just speculative trading, not transactions for…

Illegal transactions are also 11-12% of the USA's economy.[1] In 2019, forex volume was $6.6T per day [2], or $1716T per year. Meanwhile global GDP was only $87.5T [3]. In other words, almost 95% of global currency volume is speculation. Why would anyone use currencies that are mainly used for speculation? Both the traditional and crypto economies are reflections of human behavior, but because crypto is more transpar…

> In other words, almost 95% of global currency volume is speculation. Why would anyone use currencies that are mainly used for speculation?

Much of that trading volume, speculative or not supports the international trade of real goods and services and hedges currency risk for large international companies [1]. The same cannot be said of Bitcoin, which does provide the same utility.

https://www.federalreserve.gov/econres/notes/feds-notes/the-...

Re: Is this the end of crypto?

#217

Post by efficax »

legutierr wrote: post #194
efficax wrote: post #193

Earlier quoted context omitted.

This graph is missing a key aspect: the "it utterly fails and we never speak of it again" section.

I imagine that would be your preferred outcome.

well i'd prefer if it had never gotten to where it is, because every crash in the crypto markets wipes out the savings of some sucker who didn't know better. that sucks.

Re: Is this the end of crypto?

#218

Post by aww_dang »

cooljacob204 wrote: post #105
devoutsalsa wrote: post #81

Earlier quoted context omitted.

The US dollar is used for shady stuff all over the world, but we’re not trying to ban it.

Yes but it's used by far for more legitimate stuff. I would argue crypto outside of investing is not. Also I don't want to ban crypto. I want to crack down on these exchanges which encouraged everyone to gamble on crypto and lost a ton of people money.

The market is cracking down on these exchanges by bankrupting them. I'd prefer a privately run auditing and voluntary accreditation model.

Re: Is this the end of crypto?

#219

Post by olalonde »

mjburgess wrote: post #215
olalonde wrote: post #203

Earlier quoted context omitted.

> We are largely in agreement as you concede my points. Concede would mean that I changed my mind. I didn't. You said some true things but which are irrelevant to your original claim. > When we talk about centralisation in economics and politics we arent talking about where databases are. Perfectly agree (as I thought I had made abundantly clear in my previous comments). I'm sure for example that Paypal has databases…

Central banks only "control" money in the sense that they have been granted the exclusive monopoly by the state to provide banks with it (and so on). The state has not taken any view, yet, on who should have such a monopoly on crypto; but they can. Defacto monopolies exist in the form of the two mining companies. This is all extrinsic to crypto. Likewise, literally printing paper money is "decentralised". There's not…

I see you've reduced your position from "Bitcoin is a scam" to "Bitcoin has some potential vulnerabilities".

The 51% attack vulnerability is a well-known risk. It was described in Satoshi Nakamoto's white paper. In practice, it is highly unlikely due to many reasons which I won't elaborate here but I there's a lot of material about it online.

As long as there is more than one government, no one government can take control over Bitcoin. They can possibly outlaw its use within their own borders (with difficulty).

Re: Is this the end of crypto?

#220

Post by dang »

P5fRxh5kUvp2th wrote: post #211
bnralt wrote: post #191

Earlier quoted context omitted.

> If the value of gold crashes it still has an inherent value because it's a useful physical good (looking pretty is not the only application of gold). The value of gold is protected by the fact that the majority of it's holdings (at least, according to this[1]) aren't used for speculation. Still, a good chunk of them are, which means there can be pretty huge swings and it's considered a poor investment. Have tried t…

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