Hacker News Re-Imagined

The Handwavy Technobabble Nothingburger of Crypto

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  • 10 hours ago

  • @louwrentius
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  • • 599 comments

The Handwavy Technobabble Nothingburger of Crypto


@bitwize 8 hours

Replying to @louwrentius 🎙

Crypto is libertarianism-as-code: it promises freedom for all, even from the state (or "cathedral" in Moldbugese), but it's really an unworkable scam whose actual effect is to enrich the founders and the investor elite at the expense of everyone else. Oh, and as a side effect, it contributes to destroying the environment while its proponents tell us this is a good thing.

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@smitty1e 5 hours

Replying to @louwrentius 🎙

> I’m not alone in believing in the fundamental technical uselessness of blockchains.

Hmmm.

Codd delivered "A Relational Model of Data for Large Shared Data Banks" in 1970, and it took something like a decade (waves hands) for RDBMS systems to appear. Packet-switched networks, anyone?

So it seems perhaps hasty to write off the blockchain entirely, though currently the idea seems to need a saner catalyst than these various coins to bring it to fruition.

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@sharemywin 8 hours

Replying to @louwrentius 🎙

So, let's all use facebook ... no that wouldn't work they sell off our data...google...apple...the government(bailouts anyone)...

as hard as I try I can't seem time find a central authority that's earn my trust..

do I use them now sure.

and if all I need it is for a couple of crypto coins to hold value long enough to buy crap until my next pay check then I could see it being stable enough for that.

file coin seems like a pretty cool protocol.

prediction markets seem like a cool way to keep truth manageable.

and if 10-40 people run a publicly verifiable block chain and they have a stake if it works then I don't see how small groups or towns couldn't run a local blockchain and it's compatible with a bunch of other ones thru defi.

To me the whole point of blockchain and Defi is that the network doesn't scale but does it really need to.

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@btbuildem 4 hours

Replying to @louwrentius 🎙

> Any application that could be done on a blockchain could be better done on a centralized database. Except crime.

The opening quote in the article captures it all for me, except the last part. The implied definition of crime is so narrow.

From what I know of the financial markets in the US, mortgages and other loans as well as more esoteric financial instruments -- it's all moving in the direction of Ponzi schemes and get-rich-quick scams. I'd go as far as saying that it is all in fact a big organized crime circuit, if you're just a little flexible in the definition of crime (mostly in the part where crime usually has consequences, but the really big crooks have found a reliable way to "socialize" the consequences of them getting theirs).

In that light, having a public, transparent ledger of all the "important" transactions at the top levels could help reduce the amount of routine white-collar crime that goes on. Perhaps it is not explicitly criminal in nature - or it is, but the offenders have far too many resources to be held accountable -- but all the same it's harmful to society at large. An idealist can dream of a system where these actors can be scrutinized, and named-and-shamed into some kind of socially responsible behaviour.

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@nikanj 9 hours

Replying to @louwrentius 🎙

I think the biggest lesson here is that people really, really love unregulated gambling. The same way they love doing drugs, making narcotics an extremely profitable business.

If we don’t legalize the things our population deeply desire, the criminal elements are more than happy to step up and provide said services.

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@andrewla 9 hours

Replying to @louwrentius 🎙

If anything, I think stablecoins are way more dangerous than the author indicates.

People talk about things like Bitcoin as a threat to sovereign currencies, and they are, as competitors, of sorts. But stablecoins are another matter entirely. One huge aspect of the value of sovereign currencies is that they are instruments of law -- courts will settle in them as a lowest common denominator, and it is safe to use them in all sorts of settings as a result.

When dollar-denominated assets appear, they always run the risk of being considered a dollar-equivalent. For example, bank deposits are dollar-denominated, and are considered dollar-equivalent (even dollar-superior, in the sense that there are transactions that you can't legally do with specie, only with bank deposits, like buy stocks). That means that if banks (which are businesses) are not good at doing business, the government is essentially forced to treat them as dollar-equivalents by making them whole. See Savings & Loan Crisis, the GFC, LTCG, etc., etc.

Stablecoins piggyback on the legal aspects of dollars, and as long as you treat them as dollar-denominated assets, you're fine. The second you treat them as dollar-equivalents, you run the risk of a change in the value of that asset being something that the government is forced into supporting.

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@cyphertruck 6 hours

Replying to @louwrentius 🎙

The irony is that this article is correct for “crypto” but not Bitcoin. Every “crypto” could be better done with a database.

But Bitcoin allows journalists like Wikileaks to be paid without it being censored.

You can call that “crime”, but your definition of crime doesn’t comport with natural law.

And censorship resistant money breaks the stranglehold of theft via inflation from the central banks.

It eliminates the primary cause if generational poverty.

I know this site is inhabited by government worshipping authoritarians, but bitcoin will fix that too, eventually.

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@phektus 8 hours

Replying to @louwrentius 🎙

"Any application that could be done on a blockchain could be better done on a centralized database."

The scientific community will disagree with this. The whole culture of independent peer review process assumes there is no centralized control over scientific conclusions, whose rigor stems from decentralized feedback. The time when centralized database (source of truth) became the basis of mainstream science was during the dark ages.

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@bsza 8 hours

Replying to @louwrentius 🎙

Posting this while the inflation rate of USD is over 6% is kind of tone deaf.

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@echopurity 9 hours

Replying to @louwrentius 🎙

HN desperate to read any ignorant take on crypto so they feel better about their Tesla paper.

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@tigereyeTO 8 hours

Replying to @louwrentius 🎙

The author of this article makes specious claims that can each be refuted.

>Any application that could be done on a blockchain could be better done on a centralized database. Except crime.

That's simply not true. First he doesn't define "better" which is incredibly important when making such a claim. I would agree that centralized databases can do things "more quickly" and "with less overhead" but you'd lose the most important quality of what make cryptocurrencies important: "without permission, consent, or control of anyone else."

Centralized systems can make changes to your data without your knowledge or consent. They can freeze/edit/delete your records without your say. Decentralized systems that use blockchains are immune to this, and for people who prioritize privacy or use of a system without consent from some over-arching 3rd party, they would definitely say blockchain-based systems are "better"

>crypto assets have no claim to be currencies because their deflationary properties and volatility don’t fulfill the theoretical or even practical function of money

This is untrue. There are government-issued currencies that are far more volatile than cryptocurrencies are. There are 3 functions of money: store of value, unit of account, and medium of exchange. Cryptocurrencies like Bitcoin fulfill all 3.

>They aren’t commodities because they have no non-circular economic use case.

Again untrue. ENS and Handshake allow registration of domains without a centralized DNS registrar. Helium tokens allow access to a global decentralized sensor/relay network without relying on centralized telecoms. ETH and AKT allow you to code and deploy a program that does not rely on any centralized servers in two different formats. Sentinel (DVPN) lets you pay for and access a decentralized VPN without relying on a centralized party. Each of these projects - and many many others - have economic use cases that are not circular.

The author has twisted facts to conform to his own predetermined reality.

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@BoysenberryPi 8 hours

Replying to @louwrentius 🎙

When it comes to crypto I am completely uninformed. In my uninformed opinion, I think there is probably something of value in crypto and the blockchain but I can't see it under the intense amount of bullshit the crypto community comes up with and I am not willing to dig through that mountain.

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@joshmarlow 8 hours

Replying to @louwrentius 🎙

I think a lot of discussions around the utility of blockchains misses (or just ignores) a really subtle but important point: smart contract networks (like Ethereum) could be thought of like public utilities that are implemented via markets. And I think that perspective can unlock a lot of innovation.

If I want to launch a startup, I have to cover hosting costs, manage infrastructure (terraform, AWS/DigitalOcean, Docker, DNS, etc) and handle lots of other complexity that is incidental to what I'm actually trying to build. It really helps to have VC money to ease that pain - but VC money is a dangerous train to get on.

But if I can build my app using smart contracts, then they are always available to execute when needed - just pay to write/execute. I don't need to cover hosting costs or much infrastructure beyond some web interface (which I could just put on Netlify). That simplicity reduces the need for funding.

Any data or infrastructure that I put in place is - by default - still available if my startup fails, so users who put their content into the system can still get access to it even if I can't afford to pay the bills anymore.

And of course, other startups could immediately build on top of whatever I've created.

Honestly, using blockchains for money - while essential for some of this - is not the most interesting application.

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@JulianMorrison 8 hours

Replying to @louwrentius 🎙

"self-automated bug bounties" is my new favourite phrase.

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@ufo 9 hours

Replying to @louwrentius 🎙

I'd add another sub-category: the so-called algorithmic stablecoins. Their biggest flaws being that they can blow up catastrophically in extreme events, something which may be hidden between a veneer of convoluted logic.

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@guscost 9 hours

Replying to @louwrentius 🎙

> bitcoin is a meme token for gambling on a fantasy about living in a cyberpunk dystopia.

Ok, thanks.

> It’s a scary but essential truth to realise that normal software engineers like us are an integral part of society’s immune system against the enormous moral hazard of technology-hyped asset bubbles metastasizing into systemic risk.

This sure sounds like “a fantasy about living in a cyberpunk dystopia” too. Maybe the author should diversify a little into Bitcoin, and relax.

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@praveen9920 6 hours

Replying to @louwrentius 🎙

I agree with the author but in the world of startup.. people come to your product/solution only if there is some issue with existing system. With crypto coins, a need is established.

Even though I agree that current crypto coins have no clear value, there is some aspect of it which people want but was probably not done right or sometimes illegal

Imagine being in 90s and everyone doing some silly websites and saying it is future. Then came the giants which actually solved the problem for the masses

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@romille 9 hours

Replying to @louwrentius 🎙

This guy has a personal brand by now for putting down crypto.

Like stop writing about it if you don’t like it!

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@dqpb 9 hours

Replying to @louwrentius 🎙

This is the sound someone makes when they realizing they're slowing down and everyone around them is speeding up.

Update: It seems I've triggered some sensitive HN'rs

Here's how to tell when someone has a real argument - they pick the best possible interpretation of the theoretical foundation of a system and then they disprove it.

Here's how to tell when someone is full of shit - they complain about meme coins.

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@gbolcer 7 hours

Replying to @louwrentius 🎙

Putting aside cryptoeconomics for a second, a centralized database can be manipulated in a criminal activity. A decentralized, omni-inspected one with no clear owner and no ability to take an axe to it provides a cryptographically sound public ledger (unless it's a private blockchain of course). It'd be very difficult to--independent of the activities that the technology is being used for now--criminally tamper with the history.

I think you have to split it into conceptual layers. Decentralization at the lower layer has value independently of how it's used.

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@1970-01-01 8 hours

Replying to @louwrentius 🎙

>Until proven otherwise it seems like the goal of the crypto ecosystem is to build an enormous unregulated casino with a crazy party scene.

The goal of crypto was to move blockchains from theory to reality. Upsetting traditional FinTech and its regulation was a side-effect of the experiment.

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@KKKKkkkk1 8 hours

Replying to @louwrentius 🎙

I'm afraid that the war against crypto was lost once Wall Street decided to join the game. Crypto will not go away regardless of utility or externalities.

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@bradhe 9 hours

Replying to @louwrentius 🎙

Author's not wrong. I've seen some seriously cringe-inducing "talks" about what blockchain is and is not, and what it can or cannot unlock for you. I also find NFTs to be just...just...confusing.

But mostly I don't care. Do whatever you like as long as you're not hurting anyone. On average people are getting misinformed about some technologies, at worst willingly grifted. But I've seen worse technology trends come (and, by the way, go).

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@bhouston 9 hours

Replying to @louwrentius 🎙

Stephen is mostly likely right that the decentralized nature of Crypto is not really a benefit. That said digital cash and tokens and NFTs do have value and I expect them to get even more popular.

I am reminded of the P2P/decentralized nature of Napster and how it was going to be a revolution.

Napter's P2P infrastructure (and later Gnutelle and Bittorrent) allowed it to operate in a legal gray zone or at least have deniability. But Napster's lasting innovation wasn't P2P, it was showing how popular digital music was when it was being fought by the powers that be (and Bittorrent showed how popular digital films would be.)

BitTorrent is still around, primarily for pirating content. It is no where near as popular as the legal means of accessing and distributing digital music and video though -- Netflix, Apple Music, Spotify, Disney+ have grabbed the main innovation and separated it from the decentralized P2P infrastructure that first enabled it.

I think crypto is likely going in that direction. People want digital cash. People want NFTs. But they do not need this wasteful decentralized infrastructure and the complete anonymity that it is designed around.

That said, I think the criminal needs will keep decentralized crypto around forever, even after it is likely banned in most places, just like BitTorrent continues today.

Crypto servers a great purpose just like Napster/Gnutella and Bitorrent did -- it is forcing us to modernize our traditional banking infrastructure to compete with these wildcat currencies.

Digital cash versions of each major currency will exist, be formally blessed by the powers that be, they will probably have at least semi-centralized infrastructure, KYC and rollback capabilities and near 0 gas fees. KYC and rollback capabilities are key for reducing crime.

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@agentultra 7 hours

Replying to @louwrentius 🎙

I work in fintech and I don't see how a run on Tether will result in everyone getting their money back. The people financing it are hidden behind shell corps in shady countries with loose reporting and have not been playing ball with regulators. It's not reasonable to believe they have the reserves.

The systems of payments we have today are social systems. They're built on a system of obligations, credits, debits, and liabilities. The technology used to facilitate modern systems is merely a reflection of that system.

The entire reason for the crypto ecosystem to exist is to have a financial system free of that regulation and governance.

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@pennaMan 7 hours

Replying to @louwrentius 🎙

Crypto is all about decentralized proof of trust yet somehow this eludes people who should know better. Please show me how you solve decentralized proof of trust (double spend) with postgres.

Indeed, crime did have a need for anonymous proof of trust that crypto solved. Why did crime have a need for that? Because crime lies beyond the realm of the status quo.

Criminals are to the status quo as pioneers and revolutionaries are.

In the "normal world", centralization gives us the situation where the organization in charge of authentication is the same organization that has the monopoly on violence. Indeed within the rules of this story we built crypto seems to be "a solution looking for a problem", as another stereotype argument goes. The problem is all around you.

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@can16358p 8 hours

Replying to @louwrentius 🎙

Not being pegged to a centralized, state-controlled currency is a dealbreaker for me. It's still in infancy and it's true that 99% of the projects are get-rich-quick schemes with no intrinsic value. Though, I think the author lives in a country with a trustworthy government because that's not the case for many people including me. In the last two days my country's currency has shaken much more than crypto and I don't trust a single word my government says. In this case, crypto really shines. In addition, as more services get integrated into crypto ecosystem and as get-rich bubbles wear off, combined with solutions to scalability and speed problems, many will see much more value in crypto.

12 years is nothing when reinventing fundamental workings of economics is at stake. Give it more time.

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@kinnth 8 hours

Replying to @louwrentius 🎙

Decentralisation offers the following value over centralisation:

* Control by a majority, not a minority. (democratic)

* Open ecosystem that visible and able to be analysed by anyone (transparent)

* Immutable (no one makes up assets without everyone knowing about it)

* Fair. Same price for everyone at all times, no chance of a monopoly.

Those don't exist in central systems and so the price you must pay for that is speed, scalability and anonymity (which is both used for good or bad). I don't believe crypto is the answer to everything, but I certainly don't see it as useless.

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@mandmandam 9 hours

Replying to @louwrentius 🎙

Another rant about crypto which ignores Nano, which has been around for 6 years now.

*y*a*w*n*.

There is immediate and obvious utility in being able to send value instantly with no fees, with no dependence on a centralized authority.

Nano just got its own currency ticker - XNO - and avoids every fault this author finds in the rest of the field.

Mr. Diehl went far enough to pick out some flaws, and then generalized them onto every variant of the technology without going that little bit further to actually check if he's right or not. Laziness.

There's so many 'Edisons' out there who have decided that because 9,999 filaments don't work that well, lightbulbs are a dead technology. And it's so tiresome - because there's a feckin LED lighthouse beaming photons across the planet as we speak.

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@timdaub 6 hours

Replying to @louwrentius 🎙

> Smart contracts are, in database terminology, stored procedures that run one of the various incarnations of distributed databases these technologies are built on.

This is a classic misrepresentation of the properties of a smart contract. It's nothing like a procedure and the environment that its executed is different.

A database procedure can be deployed, run and deleted by anyone being a database admin. Anyone else cannot even see the procedures. A procedure can be edited mid-lifecycle too. E.g. we cannot see DB procedures of FB, neither can we interact with them.

A database has mutable state. And every data base makes trust assumptions about the nodes and their operators. You wouldn't invite a malicious actor to run a node in your regular DB cluster.

Anyone can host a blockchain node but not all state can be arbitrarily edited. That may require "work" as in "Proof of Work".

A smart contract can be published by anyone, be run by anyone and it cannot be updated. And it's internal state can be read after any transaction. DB procedures have no internal state that's persisted. They are functional and pure. They update the DB records.

Smart contracts and DB procedures are very different.

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@Zamicol 7 hours

Replying to @louwrentius 🎙

The cryptocurrency world is full of endless, technical publications. Yet what gets posted on Hackernews and upvoted are low quality political panderings from a cryptocurrency competitor.

Compare this post with something from Ethereum: https://vitalik.ca/general/2021/06/18/verkle.html

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@coralreef 9 hours

Replying to @louwrentius 🎙

This entire post seems to avoid or lack the understanding of the basic reasons blockchain were created; that is, to offer a decentralized, permissionless, censorship-resistant network.

This was Satoshi's vision, and those values are a blockchain's express priority over scale and efficiency.

Centralization is great for speed and efficiency, not so great for protection against authoritarian actors (governments or central banks).

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@todd8 9 hours

Replying to @louwrentius 🎙

From the article:

> Any application that could be done on a blockchain could be better done on a centralized database. Except crime.

Governments, world-wide, may end up emulating China, which is planning to outlaw other crypto-currencies while providing its own. The information gathered by a national government monopolizing crypto-currency is simply too appealing to those that would like to deter crime, stop tax-avoidance, or even understand in real-time what is going on in their economies. After China, I believe that other nations are likely to do the same thing and outlaw or heavily regulate crypto.

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@colinrand 7 hours

Replying to @louwrentius 🎙

I appreciate the authors sentiments but I missed perhaps the most important one to me. Crypto has really re-invigorated interest in DIY/Tinkerer/random projects with no real purpose. These may appear pointless externally, but internally to the ones working on them they are incredibly fun, educational, and sure, potentially profitable. When industry / tech is in this chaotic phase, often the major benefit is figuring out what doesn't work, what fails, etc. If things were easy, everyone would do it, but when it's hard to get right, amazing innovation can happen along the way. Don't discount the random meandering towards solutions.

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@IronIvan 9 hours

Replying to @louwrentius 🎙

> Any application that could be done on a blockchain could be better done on a centralized database. Except crime.

After all as we all know: If you've got nothing to hide, you've got nothing to fear.

And look at how inefficient all these permissionless, trustless protocols are! What a waste! Let's just all trust a central authority and think of the savings and the children.

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@outside1234 7 hours

Replying to @louwrentius 🎙

http://shouldiuseablockchain.com/ is my go-to reference personally.

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@h2odragon 9 hours

Replying to @louwrentius 🎙

Dogecoin started out as an explicitly value-free "let's play with this without risk or seriousness" fork of Bitcoin. The speed with which the scams took it over was instructive and I think indicative of everything that's played out since then... In that sense, Dogecoin was a rousing, complete, wonderful success.

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@bob331 8 hours

Replying to @louwrentius 🎙

it’s impossible to persuade crypto fantasists because they are in a cult

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@karaterobot 8 hours

Replying to @louwrentius 🎙

I feel like I have a pretty good idea of Stephen Diehl's opinions on cryptocurrency markets, after reading a lot of his articles posted on HN. I'll read this one too, if there's a new argument in it. Is this one worth reading for someone who is beginning to find them a little samey?

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@ashalhashim 8 hours

Replying to @louwrentius 🎙

“Let me explain why crypto is bad by showing how it doesn’t fit neatly into the definitions of any of the monetary instruments that preceded it”

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@jude- 9 hours

Replying to @louwrentius 🎙

We get it, Steve. You don't like crypto. And it upsets you that other people like things you don't like, so you feel compelled to write the same useless whine over and over to cope.

Get a life

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@notpachet 7 hours

Replying to @louwrentius 🎙

> There is a somewhat coherent proposition that crypto assets are effectively unregistered securities contracts, basically like stock in an empty company that doesn’t do anything except promote the sale of its own stock.

I sometimes think that when anthropologists from the future look back at today, the primary lessons they'll draw from us won't have to do with our technological cleverness, but rather our financial imagination. Greed is at work in the world, and it is a strong force of propulsion in terms of how the world we are living in is changing. Perhaps dramatically more so than technology, in a given period of time.

The willingness to speculate in a manner that is completely unhinged from reality: that is the dark heart of cryptocurrencies. It is rent-seeking behavior taken to its brutally logical conclusion. And it is not unique to crypto. Look at people's behavior in the stock market, or the housing market. It isn't that these assets are actually appreciating that much in the real world, so much as investors are simply trying to find a place to put their money and get a return.

In that sense, the speculative utility that <meme stonks/Vancouver condos/cryptocoins> provide, as a store of financial value, has become orthogonal to reality. In some markets, I'd argue that we're even seeing a weird parasitic effect, where the host is kept alive simply to serve as a form of blue sky contract by the force of our collective willingness to play Russian Roulette speculative games with each other. GameStop is a good example.

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@anonymoushn 9 hours

Replying to @louwrentius 🎙

This particular source is extremely low quality and is motivated by the author's undisclosed competing product. I would like to see higher quality sources on the front page of hacker news one day.

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@Scarblac 9 hours

Replying to @louwrentius 🎙

I wonder how much of the Crypto hype is because the US banking system still lives in the 1980s or thereabouts.

If everybody in the US had access to bank accounts with easy electronic transfers within 5 seconds for no charge, no chargebacks and so on, as people are used to in the EU, would people still be excited about Bitcoin?

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@CTDOCodebases 9 hours

Replying to @louwrentius 🎙

Funny how he fails to mention that Tether regardless of how dodgy it is provides a lifeline to people in countries undergoing massive inflation like Lebanon.

Legal or not a back up option to a failed currency has real utility. This is why I suspect countries will push ahead with CBDCs and seek to export their use for financial and intelligence reasons.

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@EVa5I7bHFq9mnYK 6 hours

Replying to @louwrentius 🎙

That's a lot of smart words, but I just paid $7 in bitcoin to top up my Egyptian sim card (wi fi in the hotels is not existent over there, so you must use mobile internet), using bitrefill and lightning. It took a few seconds to complete, I paid zero fees, I didnt have to divulge any information about myself nor to the vendor, nor to any bank or goverment. No registration, no validation, nothing. Vendor did not have to worry about my transaction being fraudulent or that it might be charged back for any reason.

As to the volatility, I topped up my payment wallet with $100 some time ago, used it to pay for many things, and now it shows a balance equivalent of $800. I welcome such volatility.

To me, this clearly shows the superiority of this form of money over previous forms.

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@betwixthewires 8 hours

Replying to @louwrentius 🎙

They're really hammering away at the narrative these days. Every one of these articles i see reference one another. If this issue is so contentious as they claim every time, why is it that they can only seem to find a handful of people to reference each other? Seems like a group of people that for whatever assortment of reasons (probably their stated ones) don't like cryptocurrency and are crafting and hammering away at a narrative.

I don't disagree with a lot of what's said in the article. But there's a lot that is ignored, and a lot that isn't put into context. Yes, this entire system is designed to put financial interaction outside the purview of regulators. This is 100% true. But that's a selling point, at least to those who see it as a positive. That doesn't equate to "crime" though (although it includes crime as a subset) unless you blanked define all financial activity outside the reach of regulation as "crime", which is circular logic.

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@alcio 8 hours

Replying to @louwrentius 🎙

> Any application that could be done on a blockchain could be better done on a centralized database. Except crime.

In a weird way, this quote is a good explanation of why cryptos exist: they give the possibility of creating systems evading state controls.

Crime is a relative thing: moving money outside of certain countries is prohibited, in others it's owning property for certain category of people.

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@moolcool 8 hours

Replying to @louwrentius 🎙

What about gaming? A huge problem in gaming now is that once games are no longer profitable, the servers go offline and they become unplayable. In-game assets simply disappear, and DRM servers go offline on the whim of the publisher. With the right architecture, crypto could solve both of these problems.

Disclaimer: I don't like DRM or microtransactions, I think both of them make the gaming experience in 2021 pretty terrible.

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@keyme 7 hours

Replying to @louwrentius 🎙

What an obnoxious piece of drivel.

"Any application that could be done on a blockchain could be better done on a centralized database. Except crime."

The HN California tech-bros could be forgiven for not "getting it" 2 years ago. However, when leaving your own damn house became a crime, this lack of understanding is beginning to become infuriating.

The value proposition of cryptocurrencies is not only in shielding you from the whims of bureaucrats that are in charge of monetary policies, but of idiotic changes to all policies.

When my country was in a full insane-mode covid lockdown, no centralized database helped me to get a haircut. That haircut guy took only cash or crypto.

When the next insane demand is inevitably decreed upon you, maybe cash won't do anymore either.

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@worik 1 hour

Replying to @louwrentius 🎙

I loved this article. I am almost in complete agreement.

Reading the comments here is very worrying. So little understanding of simple economic ideas, like what a Ponzi scheme is.

Truly amazed that people think that Bitcoin is comparable to gold. I am not a fan of gold as an investment, they have that in common. But nothing else.

It is a tragedy that so much energy is used, in times like these, for something so useless.

128 TWh in a year. https://www.sciencealert.com/bitcoin-could-soon-consume-0-6-...

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@dominiek 6 hours

Replying to @louwrentius 🎙

"Any application that could be done on a blockchain could be better done on a centralized database. Except crime."

What if the actual crime is committed by those that control our money...

Saifedean Ammous' book "The Bitcoin Standard" gives an excellent history of hard money and shows that any new form of hard money will inevitably replace the lesser form (e.g. from the silver standard to the gold standard).

Crypto is composed of interesting projects and scams. Gambling and speculations are symptoms of a wider problem of debased currency and a lack of hard money.

Bitcoin fixes this...

Talking about Bitcoin in the same vain as Crypto shows a profound lack of understanding of history both past and recent when looking at Bitcoin.

While people trade their little Pokemon NFTs Bitcoin will be doing what Bitcoin has been doing from the beginning: Staying exactly 21 million bitcoin - the scarcest and most accessible form of hard money the world has ever seen. It's a black hole sucking in monetary inflation.

1 Bitcoin = 1 Bitcoin.

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@dvh1990 9 hours

Replying to @louwrentius 🎙

"Any application that could be done on a blockchain could be better done on a centralized database. Except crime."

So you're saying there IS a use case :)

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@krisrm 8 hours

Replying to @louwrentius 🎙

"every economist worth their weight in salt"

Which ones might those be? I think the public's trust in economists has been rightly damaged for a long time.

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@dougSF70 8 hours

Replying to @louwrentius 🎙

The Oracle problem renders the trust component of the blockchain untrustworthy. The storage expense of using a blockchain (because of the validation required) imposes the requirement of using off chain DB for storage. So you end up with the most economically viable use for Blockchain being the validation of high value digital transactions..e.g Crypto. Perhaps this is why crypto prices will continue to rise, since the validation component requires energy ($) to function and the more transactions that take place, the more validation is required - I believe it does not scale linearly even though it happens in parallel.

Since validation fees are paid in crypto, crypto prices must rise as more validation takes place. It is sort of circular.

I could be 100% wrong though.

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@elif 7 hours

Replying to @louwrentius 🎙

The author completely omits any mention of immutability or value storage, instead choosing to characterize crypto as an overengineered scam platform.

Really dubious analysis imo.

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@easrng 6 hours

Replying to @louwrentius 🎙

> Any application that could be done on a blockchain could be better done on a centralized database. Except crime.

Actually, you can have private digital currency without a blockchain that would be perfectly usable for crime. You'd need a server coordinating a scheme like that of https://www.chaum.com/publications/Chaum-blind-signatures.PD..., preferably accessed through Tor for additional privacy.

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@cwkoss 7 hours

Replying to @louwrentius 🎙

This is the second time this week I've seen an article from Diehl on the front page that is critical of cryptocurrency but has next to zero substance. Weird that people regard him as a crypto expert, he doesn't seem to understand the space very well.

- Comparing Bitcoin to doge and shiba is laughable

- Re progcoins, he says "After twelve years of these technologies existing" - Ethereum is only 6 years old...

- Like most other crypto skeptics, this author doesn't understand the value of decentralized value transfer, so his analysis entirely misses the pro's of these technologies. It's like someone trying to understand why candy is popular by only looking at the nutritional information - never tasting it.

I'd bet 1000 SHIBA that one of Diehl's friends tried to convince him to buy in years ago, and now the cognitive dissonance of that rejection costing him hundreds of thousands of dollars in potential gains is forcing him to double down: his ego cannot tolerate crypto success - or else he'd have to admit to himself he was naive and short sided by discounting it years ago.

The majority of coins will eventually fail, and it's even possible all the currently popular ones will be included in that. The road to maturity has been and will continue to be bumpy. But the writing is on the wall that crypto is going to be a major force in global finance for decades to come. Pandora's box is open, anyone who thinks it will entirely flame out and disappear doesn't understand what has happened over the past decade.

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@tanseydavid 9 hours

Replying to @louwrentius 🎙

I stopped at "decentralized woo woo".

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@c7DJTLrn 9 hours

Replying to @louwrentius 🎙

I wish I could have discussions about cryptocurrency as a technology rather than a "get rich quick" scheme. Back in 2017 I was really excited about Ethereum and the promises of scalability not just from Vitalik B. but from other developers too. I still think that cryptocurrency could do good for the world if the issues can be resolved but for now everybody's got their eyes on the price, not the technology's horizon.

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@LocalH 9 hours

Replying to @louwrentius 🎙

"Cryptocurrency", not "Crypto". Title should be updated to correct this.

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@nathias 9 hours

Replying to @louwrentius 🎙

Any application that could be done on a blockchain could be better done on my centralized database. Buy now.

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@chishaku 7 hours

Replying to @louwrentius 🎙

> It’s a scary but essential truth to realise that normal software engineers like us are an integral part of society’s immune system against the enormous moral hazard of technology-hyped asset bubbles metastasizing into systemic risk.

Myopic and uninformed.

Pretend crypto doesn't exist and you still have a market rife with moral hazard and technology-hyped asset bubbles that metastasize into systemic risk to the point of bringing down the real economy in increasingly shorter crash cycles.

Is crypto a cause or a symptom?

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@flignats 9 hours

Replying to @louwrentius 🎙

It's the world's first globally accessible, decentralized, transparent, immutable ledger. Lots of value and future value that is being unlocked.

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@kobieyc 9 hours

Replying to @louwrentius 🎙

Excellent straw-manning 10/10

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@llimos 7 hours

Replying to @louwrentius 🎙

Most people on HN are rational people who look at the world in a rational way. Bitcoin and friends are not operating in a rational market, therefore we don't understand them, and most of us would probably be pretty lousy investors since we would try to make decisions rationally instead of memeing and YOLOing.

But, and this is a key point, that doesn't make us right and them wrong. It's just a different kind of market, one that I am not very good at, but it is for sure possible to make money in it. You just need to be a different kind of person. We can say our way is "better", but who are we to decide that?

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@gfodor 8 hours

Replying to @louwrentius 🎙

For a crypto-skeptic, this is actually a stunning admission:

"Any application that could be done on a blockchain could be better done on a centralized database. Except crime."

If you acknowledge this, then you acknowledge that crypto has a unique value proposition of being able to shield ones financial transactions. From there, you have to pull in a lot of assumptions that the only time this will be valuable is crime, not to mention what seems to be an assumption that all crime is morally determined to be crime.

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@yashg 8 hours

Replying to @louwrentius 🎙

When I understood the blockchain and proof of work, my first reaction was - this is nuts. It's a waste of computing power and electricity all for removing a trust provider. And immediately the next realisation was that making a blockchain private and removing proof of work made it pointless.

Blockchain is a solution for nothing.

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@exdsq 7 hours

Replying to @louwrentius 🎙

This guy always writes such negative posts about crypto while working on his own centralized digital treasury settlement system https://github.com/adjoint-io - the exact thing crypto threatens.

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@chias 9 hours

Replying to @louwrentius 🎙

I think the thing that bothers me most about using "crypto" to mean "cryptocurrency" is when people write articles deriding the "nothingburger of crypto", I feel conflicted.

Part of me wonders how many non-tech people we're conditioning to assume cryptography is worthless in 2021.

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@SubiculumCode 9 hours

Replying to @louwrentius 🎙

I submitted this recently, as a counterpoint to this article: Yes, You May Need a Blockchain (coindesk.com) https://news.ycombinator.com/item?id=29319205

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@Animats 6 hours

Replying to @louwrentius 🎙

What's so striking about all this is the sheer scale. There have been bubbles before, but not trillion dollar ones based on nothing.

It's not just Bitcoin and friends. Rivian, which is just starting out as an electric light truck manufacturer, has a market cap of US$98 billion. First vehicles will ship no sooner than January 2022. This is more market cap than Ford Motor, the #1 seller of light trucks for the last 44 years and with a good electric truck in their lineup.

This can't end well.

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