In defense of cryptocurrency

Most of Green's article goes through, except for the answer to the 'climate change' objection (Objection 1). Which is, of course, the most important, and without it, the article as a whole also fails to convince.

The problem is in this passage (mine the emphasis):

> But the question we should be asking is not whether to be angry about the power consumption of proof-of-work mining. We should be trying to figure out the right path out of this mess. And more concretely, whether there’s a path forward which is more likely to produce *a good outcome* than what is already happening in the industry — namely, that projects are rapidly deploying cleaner technologies to replace proof-of-work.

1. What is a "good outcome?" A good outcome for whom? A great outcome for most species, and most h.sapiens, would be an outright ban, because of the risk spread.

Think actuarially:

There is always the possibility the crypto industry trends cleaner, but legacy chains will be around for yonks, and bluechip crypto is unlikely to ever move off PoW. This means that, yes, while there is a possibility the industry might trend clean, this is an emormously polite way of saying that the downside risk is both severe and likely.

Put another way: if you were selling planet insurance, and you found out they had a lot of PoW crypto going on but were thinking about maybe one day kicking the habit, you'd probably either charge them a fortune or tell them to take a hike, right? Think actuarially.

There is also a suggestion that banning mining (or crypto transactions) might just move the action to other jurisdictions. This suggestion seems strained: for while a coordinated international treaty or ban might make time to confect, it's certainly not impossible. Powerful nations might, say, weave a crypto-ban requirement into multilateral trade agreements, like we already do for intellectual property.

A ban on crypto mining would likely be even easier to implement and spread, as most nation-states correctly view crypto as a threat to their command&control. I mean, look at Ecuador.

Finally, banning crypto would also be something nation-states could take back to their populations as proof of progress on climate change. And they'd even be right.

As harsh as it is for a supporter of crypto (and former industry wonk and former whole-coiner) to say this, I'm sincerely beginning to think that the lasting value of this whole Blockchain Thing has been the thought it has provoked. I, for one, would never have had to think so deeply about the nature of value and currency.

But you know what? These days, I stick to fiat.

> I suspect we have different governments. I don't see mine doing anything remotely like that.

Then why are they going to bring in a blockchain solution? It's got the exact same problem there as any other software solution would.

That's my point here, making it a blockchain (or a database!) doesn't magically solve the root cause, it's just an implementation detail.

If it even is a problem (a lot of other posters don't seem to think so), the problem isn't that the data storage medium isn't decentralised, or that there's too much trust in the system, it's the absolute ton of bureaucracy and paper-shuffling that takes several weeks. Choosing blockchain + API vs DB + API here doesn't address that. The gains come from modernising the system, not the storage tech.

> If you want your mind changed that cryptocurrency is currently useful, I can't help you there. But if you want your mind changed that many of the drawbacks of blockchain technology are not as insurmountable as detractors would have you believe.

Let me summarize the sentiment to see if I'm understanding: "I'm excited about crypto now because of what crypto could be in the future."

To me it feels like being really excited about technology X because technology X+n might fix the problems with technology X. I just can't get behind that as a general principle. I've been hypeburned too much and I just don't have it in me anymore.

I do find at least amusing to point out you started this thread with a comment that adamantly stated that "There's nothing unique or special about it [blockchains]"

Only to immediately follow it up by conceding your main point > "he PoW system used is one way to prevent Sybil attacks when distributing work among untrusted peers, and that's it. Novel, neat, but useless"

Ok, so you shifted the goal post from "there's nothing special about it" to "being novel and neat is insufficient for being 'special'". Whatever special means here.

The weirdest part is that your convictions (and concessions) are based on the Bitcoin whitepaper, which is quite literally the oldest part of modern day blockchains/cryptocurrencies.

Nakamoto style PoW consensus and the UTXO model bitcoin uses - never mind being very much novel and "special" - is the bedrock of the past 13 years of distributed systems and cryptographic research.

I'm more than happy to walk you through the landscape in question and the novel, neat, and useful things therein, but you seem quite content in your veil of ignorance. Feel free to prove me wrong.

This is why it makes sense to have a narionalised bank which can render financiap services at cost, rather than private, for profit banks.