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Crypto is an unproductive bubble

alexkolchinski.com

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Re: Crypto is an unproductive bubble

#171

Post by daenz »

cf141q5325 wrote: post #148
daenz wrote: post #6

I have a hard time imagining how your normal everyday people would put any faith whatsoever in crypto. It's another step removed from "just a bunch of numbers in an account" (current banking) that is even harder to explain and justify. Why should they trust it? So how can it succeed if everyday people don't want to use it?

Because its still more trustworthy then a currency that is managed under modern monetary theory. As in you can print as much money as you want as long as people have no store of value to escape into. You can argue about the validity of that argument all day long but the size of the crypto market speaks for itself. At the end of the day, somebody spend energy for its creation which gives it at least some sort of store…

Want to make a bet? I can survey 100 random people about the trustworthiness of crypto versus cash and prove you wrong.

Re: Crypto is an unproductive bubble

#172

Post by gonehome »

shadowgovt wrote: post #154
gonehome wrote: post #40

Earlier quoted context omitted.

Banks won’t protect you from wire fraud either. I’ve written this elsewhere when this topic routinely comes up and crypto is dismissed, but the capability of self-custody is the thing to pay attention to. Nothing else has this capability to the same extent. Today we store most of our wealth in assets (market index funds, stocks, real estate, etc.) and some (typically very little, and rarely outside of a bank account)…

> some of it is just what's required for self-custody. I think this will forever be the sticking point for crypto for a lot of potential users. It boils down to trust. And the relevant question is: for an average person, do they trust FDIC insurance more than they trust their own ability to understand the crypto infrastructure and protect themselves from rogue or compromised transaction facilitators (because for Bitc…

I agree with you.

The capability added by crypto doesn’t mean everything else can’t exist or isn’t preferable a lot of the time for most people.

I do think there’s a lot of room for the current tooling to continue to improve though which may make it more of an option for more people.

Re: Crypto is an unproductive bubble

#173

Post by bobsmooth »

exolymph wrote: post #109
bobsmooth wrote: post #83

Earlier quoted context omitted.

My bank account is insured by the government up to 250k. To trust the banking system is to trust the government.

You probably don't mean it to, but this reinforces my point. You trust the government? I sure don't.

I trust the government more than I trust the blockchain.

Re: Crypto is an unproductive bubble

#174

Post by rhyzomatic »

dist1ll wrote: post #95
saghm wrote: post #48

Earlier quoted context omitted.

>> One of the biggest drawbacks for blockchain is that transactions can't be revoked after the fact (with the only exception being costly forks of the entire ledger), and there's no additional human oversight (like I'd get when sending a large amount of money through a bank) to protect me. >> With crypto, a software flaw used to steal crypto can kill an entire company. They're largely powerless to stop it once the tr…

> How is this any different than what we have, just with extra steps? It's declarative. There's no vagueness about the state of the transaction, and settlement can be cryptographically proven. This creates transparency and accountability. It's also sovereign. Not every transaction NEEDS this level of customer protection. Paying in person at a restaurant or supermarket can be done with a simple transaction. Also, some…

What is the vagueness present in a basic credit card transaction? (Not saying there isn't any, just curious what you mean)

Not every transaction needs that level of customer protection, but it's very nice to have. Currently, banks that provide consumer protections are motivated to hunt down fraud, which helps everyone, not just credit card users. It keeps the level of fraud overall low.

And while I do agree some transparency would be gained through smart escrow contracts as opposed to credit card transactions, I disagree it's any more "sovereign". For the system you're describing to function, you need established third parties that both you and sellers trust. These third parties may choose to revoke your access, restrict your purchases, etc in the same way banks do now. In short, crypto still has not solved the trust problem.

(Also, while smart contracts do work for cancelable contracts, being able to "issue" a new credit card for each company as a consumer and then cancel it whenever solves it better and without any blockchain this or that)

Re: Crypto is an unproductive bubble

#175

Post by gonehome »

Nextgrid wrote: post #121
gonehome wrote: post #70

Earlier quoted context omitted.

I don’t know the content of the bill, but it’s a matter of degree. It’s harder to control your transactions when you have self-custody. It requires a higher level of coordination.

You just need to control the onramps and offramps. Bitcoin is of no use if you can't exchange it for anything tangible.

That’s only true if you must transact in fiat. It’s mostly true today, may be less true in a future with this kind of restriction on on-ramps and off-ramps.

Even so, it’d have to be a global restriction on all exchanges which is more challenging to coordinate.

Re: Crypto is an unproductive bubble

#176

Post by i_like_waiting »

cycrutchfield wrote: post #136
i_like_waiting wrote: post #124

Earlier quoted context omitted.

Thats because nobody refutes those points. Yes, transactions in crypto are irreversible. It might be bad for those number of factors. But even given those cons we see benefits in things mentioned above. E.g. my colleague can send bitcoin to his brother in russia. Tell me what other options to transfer value there are at the moment between west and russia. Very similar for ukraine.

Circumventing sanctions is a _killer_ use case

There are tons of cases when it's morally ethical and positive thing to do. Goverments have option to do just blanket ban, but not consider individual cases.

E.g. you want to support independent reporters in Russia. What can you do? Support your family? Maybe even foreign students there?

Re: Crypto is an unproductive bubble

#177

Post by roenxi »

Nextgrid wrote: post #145

Cryptocurrencies have a valid but very specific use-case: being able to transact in a hostile environment. It does so by making certain trade-offs such as an energy-intensive verification process. This is a very valid use-case when you need to transact against the will of a powerful adversary such as governments. It needs to be there and needs to be protected just like free speech needs to be protected. However, day-…

Also, note that "take their stuff through extra-legal means" has become an uncomfortably common strategy in the west. Things like asset forfeiture, debanking in a myriad of forms, increased government intervention in financial systems, changing the rules suddenly every time a totally forseeable at some point financial crisis comes up (there is one every 10-15 years! they aren't surprises).

It is completely reasonable to have some assets that the government cannot take away from you without actually going through the court process, putting the screws to someone and arguing to a judge that a crime took place. And that inflates in a predictable, controlled manner.

The last 3 years has convinced me that I will own crypto by the time I die. Not bitcoin - indeed, I don't know what protocol it will be yet. But something.

Re: Crypto is an unproductive bubble

#178

Post by mumblemumble »

Nextgrid wrote: post #145

Cryptocurrencies have a valid but very specific use-case: being able to transact in a hostile environment. It does so by making certain trade-offs such as an energy-intensive verification process. This is a very valid use-case when you need to transact against the will of a powerful adversary such as governments. It needs to be there and needs to be protected just like free speech needs to be protected. However, day-…

> transact against the will of a powerful adversary such as governments.

I would not personally be quite so confident that a state actor (or a well-capitalized non-state adversary such as a criminal organization) would not have the ability to severely curtail, if not outright eliminate, some other party's ability to execute cryptocurrency transactions. Most of us have no idea what unexploited vulnerabilities these sorts of organizations have found, and they didn't get to be as powerful as they are by habitually playing an ace up the sleeve when a three will do.

Compare with the proverbial suitcase full of cash. From a security perspective, it has the interesting property that transactions involving one don't have to be publicly recorded and processed on a public, global, openly accessible peer-to-peer network in order to complete.

Re: Crypto is an unproductive bubble

#179

Post by cf141q5325 »

daenz wrote: post #171
cf141q5325 wrote: post #148

Earlier quoted context omitted.

Because its still more trustworthy then a currency that is managed under modern monetary theory. As in you can print as much money as you want as long as people have no store of value to escape into. You can argue about the validity of that argument all day long but the size of the crypto market speaks for itself. At the end of the day, somebody spend energy for its creation which gives it at least some sort of store…

Want to make a bet? I can survey 100 random people about the trustworthiness of crypto versus cash and prove you wrong.

The market speaks for itself. One works as a store of value, one doesnt.

Re: Crypto is an unproductive bubble

#180

Post by binwiederhier »

I opened this link and was hoping for a conversation about how cryptography (not cryptocurrencies) has not made significant advancements in user experience. Not that the article wasn't interesting, but I've long felt that while crypto-primitives advance, the UX of cryptography APIs is still poor across all languages: It's hard to not screw things up, it's hard to understand for newcomers, and there is poor interoperability and no real common encryption file format (maybe gpg, but that's too complex and not widely adopted in popular tools).

This was really off topic. My apologies for that, but I feel like I had to get that off my chest :-)

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