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Crypto Fooled Us Once. It Will Fool Us Again

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Re: Crypto Fooled Us Once. It Will Fool Us Again

#71

Post by AnthonyMouse »

notamy wrote: post #11
ferfumarma wrote: post #5

Crypto does have utility, but there's only room for one: bitcoin. Everything else is just a me-too derivative that can add nothing except the possibility of central control (like the "digital dollar"). The ability to instantly transmit the hardest asset known to man (harder than gold, in the sense of inflation resistance) does have utility, regardless of what critics say. It has downsides too: the ability to be lost…

> People on HN are smarter than me, and they all seem to hate bitcoin with passion, but I haven't yet understood why. I think it might be harder to recognize its value when it's part of your implicit cultural background: the dollar is money. Because if BTC is going to be my money for transactions, I actively do not want any of the speculation on its price. It’s not useful for normal transactions if the price can swin…

> It’s not useful for normal transactions if the price can swing as much as 50-100% within a year

Why not? If you're not using it for speculation then you wouldn't be holding it for that long. If you're using it as a currency then you might keep $50 worth in your wallet and if you ever receive more than that and not want to spend it immediately you'd exchange it for some traditional investment instead.

Re: Crypto Fooled Us Once. It Will Fool Us Again

#72

Post by notamy »

AnthonyMouse wrote: post #71
notamy wrote: post #11

Earlier quoted context omitted.

> People on HN are smarter than me, and they all seem to hate bitcoin with passion, but I haven't yet understood why. I think it might be harder to recognize its value when it's part of your implicit cultural background: the dollar is money. Because if BTC is going to be my money for transactions, I actively do not want any of the speculation on its price. It’s not useful for normal transactions if the price can swin…

> It’s not useful for normal transactions if the price can swing as much as 50-100% within a year Why not? If you're not using it for speculation then you wouldn't be holding it for that long. If you're using it as a currency then you might keep $50 worth in your wallet and if you ever receive more than that and not want to spend it immediately you'd exchange it for some traditional investment instead.

> If you're using it as a currency then you might keep $50 worth in your wallet

Because that $50 in my wallet might be $25 or $100 by the time I need it.

Re: Crypto Fooled Us Once. It Will Fool Us Again

#73

Post by cmcaleer »

JSavageOne wrote: post #26
ferfumarma wrote: post #5

Crypto does have utility, but there's only room for one: bitcoin. Everything else is just a me-too derivative that can add nothing except the possibility of central control (like the "digital dollar"). The ability to instantly transmit the hardest asset known to man (harder than gold, in the sense of inflation resistance) does have utility, regardless of what critics say. It has downsides too: the ability to be lost…

Bitcoin uses about 100x more energy than ethereum, has 5x less throughput, and doesn't natively support smart contracts. There's definitely also room for ethereum.

There is no word for swapping $5 of crypto on Uniswap currently costing ~$2 in gas fees (and this is 'low') and taking several minutes other than "dumb".

There are other cryptos which have most or all of the advantages of Ethereum with minimal downsides. I don't want to come across as shilling any particular bag, so I'll be vague and say there are chains with reasonable amounts of activity where transactions take seconds and fees are $0.00x or $0.000x. This actually is disruptive and interesting compared to fees for Stripe/Braintree or even Mastercard/Visa.

The reality is that if Ethereum released today with its capabilities, it would not see widespread adoption. Its position today is purely because it's the incumbent smart contract chain.

Re: Crypto Fooled Us Once. It Will Fool Us Again

#74

Post by AnthonyMouse »

pixl97 wrote: post #15
ferfumarma wrote: post #5

Crypto does have utility, but there's only room for one: bitcoin. Everything else is just a me-too derivative that can add nothing except the possibility of central control (like the "digital dollar"). The ability to instantly transmit the hardest asset known to man (harder than gold, in the sense of inflation resistance) does have utility, regardless of what critics say. It has downsides too: the ability to be lost…

>and they all seem to hate bitcoin with passion, but I haven't yet understood why The dollar buys drugs, it buys guns, it buys terrible things. But it also buys bread and pays your rent. The interface a large portion of us has had with bitcoin is speculation and cybercrime. "Your computer has been encrypted, please insert X bitcoin to continue" is not a great interface for making someone have a good feeling about a p…

> The dollar buys drugs, it buys guns, it buys terrible things. But it also buys bread and pays your rent.

You can use Bitcoin to pay your phone bill with AT&T and buy electronics on Newegg. Many Americans might use US dollars to do this instead, but why would that impair their view of the Euro?

> The interface a large portion of us has had with bitcoin is speculation and cybercrime. "Your computer has been encrypted, please insert X bitcoin to continue" is not a great interface for making someone have a good feeling about a product.

This seems like putting the blame on the wrong party. If the criminals demand payment in gift cards, do people get mad at companies for offering gift cards?

> You also lack the perspective that if the economy collapses, particularly a large economy like the US economy your "unpinned" bitcoin is going to behave like it is very much pinned to that dollar.

If the world economy collapses, sure. If you're in some country in South America and that country's economy collapses, probably not.

US dollars are unique because -- ironically -- they're not just used as a currency. Enough large institutions and foreign governments hold them (or explicitly dollar-denominated assets like US treasuries) as an investment to significantly affect their value.

Re: Crypto Fooled Us Once. It Will Fool Us Again

#75

Post by AnthonyMouse »

bhaak wrote: post #64
krupan wrote: post #35

Earlier quoted context omitted.

You are talking about settlement times of Bitcoin transactions. Yes, those take 10 minutes at best, or roughly around an hour if you want to be very confident that the funds have settled. Settlement times on dollars is generally 3 days at best. The lightning network on top of Bitcoin gives you credit card speed transaction times, with settlement still happening on the Bitcoin layer in minutes not days.

The settlement times of the Dollar is instant if cash is used. Credit cards are fast, too. Even bank transactions are usually faster than 3 days. How do you arrive at „3 days at best“? LN transactions are usually not settled within minutes but when channels are closed. Anything else would negate their whole advantage. Are you thinking of rollups (which Bitcoin doesn’t have yet).

Traditional ACH transactions take days because they're not even transmitted to the other bank until the end of the day. Then you have to wait for their response.

Credit cards are even worse. All you get instantly is whether the card info is valid and has that much credit. But it could be a stolen card or a customer who issues a fraudulent chargeback, and you may not find out about that for a month or more. Meanwhile you've long since delivered the goods.

Re: Crypto Fooled Us Once. It Will Fool Us Again

#76

Post by dukeyukey »

krupan wrote: post #58
dukeyukey wrote: post #7

Earlier quoted context omitted.

> People on HN are smarter than me, and they all seem to hate bitcoin with passion, but I haven't yet understood why "Hate" is a strong word, but I dislike Bitcoin because so much of its value doesn't come from utility, but from speculation. People rarely buy Bitcoin to actually use it, but instead because they hope/expect the price will go up. And that's what leads to cases like SBF. > and understand that the dollar…

People are speculating on Bitcoin for different reasons, but many of us are doing so because we have examined it closely and seen it's utility. It is still very early in the adoption phase and so it's hard to see the utility in practice right now, but as you learn more about our current financial system and how Bitcoin works, the potential of Bitcoin is pretty astounding.

Some people are, and a lot of them are here if HN. But the _extreme_ vast majority of people buying Bitcoin wouldn't be interested in it if it had a stable long-term value - they're in it for the speculation.

Re: Crypto Fooled Us Once. It Will Fool Us Again

#77

Post by bri3k »

cjbgkagh wrote: post #57
jqpabc123 wrote: post #3

Crypto and NFTs are the ultimate scam. It's wooden nickels, the Brooklyn Bridge and Bernie Madoff all taken to their ultimate logical conclusion --- something with no intrinsic value whatsoever (electrons) is being exchanged for real functioning currency. But what really sets the crypto scam apart is the fact that no is really lying about the fundamental nature of the transaction. No one is hiding the fact that by bu…

The fiat money system also operates on faith, but that faith is in the government so by your definition that's ok I guess. It seems that the modern left is adopting the government as their own. Personally, I trust the government about the same amount as I trust big companies, not at all. In my view the current fiat money system is a very old legalized scam around which there is quite a lot of academic contortion and…

When I first heard the term 'fiat money system' I thought it was talking about bitcoin. The value exists because some crypto guy says it exists. That is the very definition of fiat.

After when I was corrected that they were talking about real currency my first thought was oh, this is a grift. Only scammers try to reverse the meaning of words like this.

Re: Crypto Fooled Us Once. It Will Fool Us Again

#78

Post by yieldcrv »

> Alameda was the one firm in the world that was capable of convincing a regional Japanese bank to ignore the Financial Services Agency, even though Japan’s banking regulator had told banks to be maximally skeptical

When I was in Japan I saw this too, basically the nearest crypto grifter with the right unrelated pedigree convinces people that derive clout in this antiquated way. It makes me sad that “never crypto” gatekeepers eventually run into the nearest one who just happens to be shilling anything random. The whole point of crypto is that you don't need to gauge utility off of pedigree, you can gauge it on your own and reach an independent understanding that’s corroborated by all the other participants in the network, which includes walking away and being disinterested.

There needs to be broad education on this stuff and what a properly managed crypto servicing organization looks like. Primarily because these are concepts that don't go away with any regulatory change, its as simple as 2 computers or nodes communicating with each other so it never goes away.

Re: Crypto Fooled Us Once. It Will Fool Us Again

#79

Post by AnthonyMouse »

notamy wrote: post #72
AnthonyMouse wrote: post #71

Earlier quoted context omitted.

> It’s not useful for normal transactions if the price can swing as much as 50-100% within a year Why not? If you're not using it for speculation then you wouldn't be holding it for that long. If you're using it as a currency then you might keep $50 worth in your wallet and if you ever receive more than that and not want to spend it immediately you'd exchange it for some traditional investment instead.

> If you're using it as a currency then you might keep $50 worth in your wallet Because that $50 in my wallet might be $25 or $100 by the time I need it.

What does that matter? If you're only holding $50 then your maximum exposure is $50. And if it turns into $100 then you're not exactly complaining about it.

Re: Crypto Fooled Us Once. It Will Fool Us Again

#80

Post by hudon »

AnthonyMouse wrote: post #59
hudon wrote: post #31

Earlier quoted context omitted.

It only seems to solve it in theory. However in a world of centralized mining where devs have high influence on how forks are treated, the double spend problem is still a problem. This is because what distinguishes forks can be their “validity”, not their proof-of-work, and fork validity is decided by humans and subject to politics and fraud.

Value is always decided by humans. The question is, is it decided in a distributed way via general consensus, or in a centralized way that exposes you to the whims of unaccountable bureaucrats? Bitcoin devs can do whatever they want, except that there is no law putting them in charge so if they attempt to commit fraud they lose everyone's respect which was the only thing giving them any power, and they get replaced b…

Devs can commit fraud without anyone knowing is my point, actually. Picture a scenario like the 2013 Bitcoin fork but with a twist: a dev introduces a bug that allows a transaction to spend bitcoin without corresponding inputs, and triggers it while in the next block spending Bitcoin to buy a coffee, then after a few more blocks for confirmation, publicly announces the bug and the need to move off of the most-work chain. Miners and devs all agree that mining on top of the most-work chain with the bug doesn't make sense and move all the mining to a minority fork that has the bugfix. Minority fork overtakes the buggy fork. Malicious dev has his Bitcoin back and spends them a second time somewhere else. No one's the wiser.

We can argue about the game theory and what exactly would happen if this was attempted today, but the point remains that double spend is possible and the Bitcoin white paper does not address this issue because it assumes Bitcoin code is set in stone. As soon as you consider that the protocol evolves and is subject to human manipulation, the white paper's guarantees all go out the window. This includes the 21 million bitcoin "limit".

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