I've been deep into crypto for years and I was a big stablecoin supporter. I was fascinated by the tech and I still am.
But everything outside the tech itself is just trash, scams, and gambling. I've come to believe that "pure" decentralization is neither practical nor particularly convenient.
The only real use case that makes sense to me is giving people in developing countries access to a stable currency they can actually hold, trade, and invest in, meaning USDT or USDC. Outside of that, as an EU/US citizen I don't see why I'd hold stablecoins instead of fiat. It's actually riskier in every meaningful way, and I already have access to every form of investment I could want.
It's genuinely fascinating to think about a technology that can empower people who otherwise have no access to financial tools. But that comes at the cost of millions of people around the world gambling with money they can't afford to lose, convinced they're investing their way to wealth.
Crypto was initially interesting to me because scarcity based economics is failing us and crypto give us a way to explore alternatives. But so far, nearly everything we've built with it has just been a clone of some scarcity-based thing that already exists outside of crypto.
Since then I've come to the conclusion that it's never worthwhile to buy crypto with fiat. Any scheme which asks that of its users creates too much continuity between the old way and the new way--it allows the illegitimately rich to continue to be illegitimately rich even after switching to the new system. Anything with that property doesn't deserve to be the new system.
What we need is a discontinuity. A system that wants not your money, but your participation, and which doesn't acknowledge the value of your old money. Today's crypto isn't it.
Isn't the whole point of an economy a method of resolving scarcity? Money is a proxy for participation; it keeps me from having to agree to paint the miller's fence in exchange for some flour.
That's the perspective that our current systems are based on. And back when the majority of the problems that people were up against had to do with there being not enough of something to go around--when it took half of us working in the fields just to feed the rest of us--then the system worked relatively well. 9 times out of 10, when somebody got a loan (which is the event that injects dollars into the system) it had something to do with alleviating the not-enough-stuff problems that we faced.
The quickest route to profitability had something to do with solving problems in ways that--by happenstance--let them stay solved. This is relevant since profitability is how banks decide whether to grant a loan, and loans are what cause USD to enter the system. Previously, we mostly had good reason to want people's ventures to succeed.
But nowadays, most loans are for zero-sum ventures that have more to do with capturing a share of some fixed resource (attention/influence mostly), or building something that helps some of us at the expense of others (missiles, datacenters, planned obsolescence, surveillance, etc). It's no longer clear whether we're better off with the success or failure of a randomly chosen business venture. Maybe that venture seeks to harm us.
The quickest route to profitability has changed. Now it's about making things worse for the many while benefiting the few (since it's the few who have all the money). Yet we're still treating dollars as valuable despite the fact that they're issued on the basis of profitability, a property that no longer has much to do with making our lives better.
So I think we need a system that understands consent. When I accept some abstraction from my employer in exchange for my labor I need to be able to look at it and decide whether accpepting it helps people who are helping me, or whether it helps people who want to poison my drinking water for their mining endeavor. Dollars don't carry enough information to enable me to make that decision, and so far neither does crypto.
We don't have to banish scarcity entirely before building monetary systems that are not based on it. Once we figure out the better way, it'll likely be crypto-shaped, except it won't ask you to buy it, it'll just ask you to use it. It'll be a rejection of the old ideas about value.
Thanks for sharing your perspective. It’s reminding me of how I was feeling about crypto in the early days. I begin specifying a project on those lines way back when and the ideas behind it are still interesting. Maybe you’ll enjoy: https://www.wired.com/2014/07/document-coin/
> When I accept some abstraction from my employer in exchange for my labor
That abstraction is simple debt. Your employer is, in exchange for what you've given them, promising to return to you something of value (food, shelter, entertainment, etc.) in the future. Money is the account of the promise made. The alternative is to forgo the debt and trade something of equal value at the time of the transaction. However, any negative externalities associated with you choosing what item of value you want to trade for exists whether you demand it immediately or defer acceptance until some time in the future. Trying to find a new way to practice accounting isn't going to change anything.
Simple debt isn't cutting it anymore. The "Debt to whom, and what outcomes does that person value?" question is important. Ignoring it and continuing to buy and sell simple debt traps people in situations where their economic way forward involves contributing to outcomes that makes their material situation worse. It's time bomb, each generation has diminishing incentives to participate.
> alternative is to forgo the debt and trade something of equal value
"equal value" is only a well defined concept when we have shared interests. But when half of us are trying to go to Mars and the other half is trying to prevent the first half from going to Mars so we can instead dedicate those resources to healthcare... when we're fighting over the steering wheel rather than fighting against a common enemy... then we can't usefully coordinate around a single untyped notion of "value". We're just running in circles negating each other's efforts. Our current economy is mostly waste.
New ways of accounting that don't obfuscate conflicts of interest the way that simple debt does will indeed change things.
> The "Debt to whom, and what outcomes does that person value?" question is important.
It may be, but it is one you, the employer, can easily ask during the interview. If a prospective employee doesn't align with your values, you don't have to hire them, and thus won't have to make them any promises to deliver anything that you don't feel comfortable with. This isn't only theoretical. "Cultural fit" is considered by a large swath of employers to be one of the most important aspects of hiring.
I know the typical HN account loves to over-engineer solutions to mundane things, but you really don't have to invent some new type of accounting for this. All you have to do is talk to the people in your life.
If the debts were spread around evenly, I'd agree with you. But the vast majority of debt is not peer to peer, but instead goes through a bank. If you're going to restrict a bank from using your mortgage to enable loans for endeavors that will hurt you (or selling the debt to somebody who will do this), I think you do need a new kind of accounting.
Accounting predates banks. You do not need to invent some kind of new accounting system to rid yourself of banks.
That said, banks do provide a useful service for many people. However, that service doesn't magically happen. One has to choose the bank they are comfortable employing. Which, again, requires an interview before accepting a bank to work for you. That is where you can make sure the bank you choose to utilize the services of aligns with your "cultural fit".
Talking to the people in your life is all you need here.
It's totally impractical to interview everybody who has ever offered you money for some reason, figure out how they got it, and how they got it, and determine if that set of people is working to undermine your efforts, just so you can decide whether to accept the money. The information burden is just too high, so people simply don't do it. We turn a blind eye to the cases when our work harms our neighbors, they do the same regarding us, and we all end up with less because of it. We could all have more if we automated that computational burden and instead just refused to participate in the negative externalities by refusing money that drives them.
But it requires types of debt which are not exchangable for one another. Whether it's working to take us to Mars or it's working to provide healthcare to our neighbors is something that debt should declare directly, it should not require a duplicate investigation at each transaction.
They got it by you accepting their promise to deliver something of value in the future. If nobody out there is willing to accept their promise of delivering future value, they don't have anything. That's the whole abstraction. It is materialized out of thin air when you agree to accept the promise.
Some new kind of hypothetical accounting system cannot possibly change anything. It will always be a hindsight account of the promise that was made. The only possible change is for you to tackle the promises themselves. Which requires talking to people. That is where the promises are made.
Hey thanks for this discussion. I've gotta run, but I appreciate the willingness to engage with my weird ideas, even if you're unconvinced that it's a problem that "something of value" means something wildly different things depending on who you ask.
All I can say is that I've been trying and trying to find work that actually solves a problem, and each time I become familiar with a business it seems like we're actually causing most of the problems we solve.
The exceptions to this pattern that I've come across don't have enough money to be hiring people.
Something like Amazon is a partnership between the capital class and, to zeroth-order, everybody else, to screw over a small slice of the proletariat (their own employees and retail / warehouse workers) and the bourgeoisie (brick-and-mortar store owners).
It sucks when the capitalist Eye of Sauron focuses on however you make your living as a thing-to-make-more-efficient but when it lands on how someone else makes their living shit gets cheaper.
Used to be, but now it's agree to paint Musk's fence in exchange for nothing, or else you aren't even allowed to exist, because the system has been thoroughly gamed. Usually when a metric becomes too gamed it's imperative that we stop using it as a metric (Goodhart's law) or else very bad things happen.
I live a perfectly fine, productive life not contributing to musk's empire. Are y'all really buying Teslas and blue twitter checks? The fact that he has a bunch of money really has no bearing on me.
The whole society is pandering to the people with the most money, you can't separate yourself from that. For instance more of your customers - no matter what you do - are Musk fans because that's what gives them money and makes them more likely to become a customer.
Somebody sells a tesla and then buys something from you with that money... and now you're contributing to musk's empire. Our money is set up so that you're not in a position to consent to it or even be aware of it.
> Are y'all really buying Teslas and blue twitter checks? The fact that he has a bunch of money really has no bearing on me.
The lives of many people who have never given Elon Musk a dime have been materially worsened by the fact that he has a bunch of money, since that money bought political power and he used it in a way that was very destructive to a lot of people across the globe.
Happy for you that you weren't impacted, but a lot of people were and still will be.
It was about creating a rules based monetary system. It made engineering sense to start with a mimic of a system that was already known to be consistent (gold), but the feeling I got was that it was much more about letting the people choose which rules they wanted to follow, and less about favoring any particular ruleset (i.e. ones that create scarcity).
I don't know what you're talking about. We build society either out of rules or out of threats and favors. Preferring innovation on the rules side has nothing to do with who breathes whose air, unless you want to make a rule about that and enforce it with software--which you probably shouldn't, because it's dumb.
Yeah, that was my favorite one so far. Although I didn't much like the pact that if we're friends we assert that each other's tokens are equal in value. I know that's in the spirit of UBI but if you're building a web of trust then it seems like a missed opportunity to create incentives around being so damn useful to your community that people treat your tokens as more valuable than somebody who is less useful. To make position, and not amount, the desirable thing. To make trustworthiness profitable.
How would that work? I (an important person who is very loved and trusted by thousands of people) agree to give you (a nobody) 0.20 of my tokens for every 1 of your tokens? That smells like financialization, I'd effectively profit 80% on all of your transactions through me.
Well, if I had it fully worked out I'd be telling people to try using my system. But vaguely...
In circles the agreement is that trust creates a 1:1 value ratio. I value the tokens you mint periodically as equal to my own, and this influences the number of tokens I give you in exchange for a loaf of bread or something. If I value the bread at 6 of my own tokens, that's the price I change you: 6.
But maybe we value each other's contributions to society differently, perhaps we consult the graph and end up with a 2:3 ratio where I trust you more than you trust me. This ratio influences prices. That loaf which I value at 6 of my tokens (times two, divided by three) I offer to you at a price of 4.
Or maybe you're working to cause me trouble, damming the river I drink from or somesuch, so the trust graph gives us a 5:1 trust ratio. In this case I'm going to need 30 of your tokens in exchange for this bread because I'm aware that by feeding you, I'm giving you energy that you'll spend harming me.
After exchange, the tokens get wrapped in a layer that indicates me as well. Since the next person to accept it will be benefiting both you and me by doing so (contributing to a system that supports our various activities), they'll have to consider the trust ratio between themselves and both of us in order to determine whether to value it. This creates a risk on my part: maybe I'll accept your token and be unable to find anybody who will subsequently accept it from me because everybody I associate finds your activities problematic. (These dynamics are all implementation details, humans just scan a QR code and see a price that was determined by the weighted trust graph).
You don't encounter tokens with problematically large stacks of wrappers because demurrage counteracts inflation. We're constantly minting new tokens for ourselves, and the value of existing tokens are constantly degrading so nobody has a token that's 100 years old. That is to say, they have a half life, they decay out of existence eventually, so there's an incentive to continue to be trustworthy and useful, rather than just hoarding enough that you can then opt out of being trustworthy for the rest of your life.
> I (an important person who is very loved and trusted by thousands of people)
The ratio we end up will not be a function of how many people trust you, or how many people trust me, it'll only consider cases where I've trusted somebody who trusts you, or where you've trusted somebody that trusts me. We opt-in to the asymmetry by using variable degrees of trust to enable or prevent the activities of our peers. It restores balance to the "vote with your wallet" situation. Currently, the only way to vote with your wallet is to vote yes or to abstain. This lets you vote no.
For a first pass I'm considering using https://github.com/cblgh/appleseed-metric for the trust graph. But I don't intend to start by making apps like the one I've described here--nothing so politically charged as money. I figure I'll get the protocol working with things that are low stakes and easy to get on board with and try my hand at making something money shaped only once it's performing well for other stuff.
I think all or nothing sounds better. There was a top HN story yesterday about the curse of excessive granularity. Not only does it require excessive attention to maintain the right values - and now you're requiring coin selection as well - but can also lead to outcomes being contradictory to your intention.
Circles trust isn't about how much I actually trust you to deliver the product I bought and not harm me - it's about how much I trust you to not be a Sybil clone. But if Musk is harming me then I'll not trust his coins and people will have to find someone else to pay through.
You also have to make sure your intended outcome is a Nash equilibrium. In your system it sounds like I can set up a relay that pays out 1:1 (or 1+fee:1) without wrappers, which will quickly become a requirement, making the system harder to use, capturing a financial fee from normal system users, and unsolving the problem you wanted to solve.
It was inspired by this mural I saw when I visited Chile. There was this whole saga of exploitation by outsiders, terminating with a brown person shoving another brown person's hand into a blender and accepting a credit card from a white person (it's right outside the street art tour place in Valparaíso). It was pretty striking to be there, a white tourist with a credit card in hand, and to see how the locals felt about the way foreign money was impacting their society.
All or nothing means that we have to chose between excluding outsiders entirely, or treating them as equals. A rich outsider shouldn't be able to use a pile of money that the locals don't have a say in and act like a king, but on the other hand there should be a gradual path to gaining the trust of the locals which has to do with whether you're helping or harming them.
I'll have to think about Nash equilibria. As for making the system harder to use... I guess there will always be the problem of displaying different prices to different people based on how trusted there are, but I think it's a small price to pay compared with avoiding the exploitation that rich foreigners visit upon poor nations: exploitation mediated by the fungibility of money. As for the other complexities of use, that's just software implementation details.
My guess is a lot of people had too much expectations for blockchain and crypto.
I remember here on HN 10 years ago everybody wanted to put everything on a blockchain. Some were betting on the collapse of the financial system.
None of those things happened but ethereum created a neutral, stable, secure cheap and transparent programmable financial platform.
Because it is neutral a lot of people ported the bad things happening in the traditional financial system to crypto: the scams, debt, speculation, etc.
And then most people started to hate it.
I guess 20 years ago most porn was hosted on Apache web servers, now it would be nginx. Should we hate nginx because of porn?
Oh hell no. Biometrics on a blockchain are a terrible idea. But web of trust stuff along the same lines as https://github.com/CirclesUBI/whitepaper, figuring out where PGP went wrong and getting it right, yeah.
I'm not really excited about blockchains at all actually. They put you in the wrong sector of the design space that falls out of the CAP theorem. CRDT's and partition tolerance however, I think there's something useful in there.
I got into crypto in 2017 when I came across the phrase "money is a technology". That idea fascinated me. But fast forward several years later, and it's obvious that money might be a technology in the sense that it's a tool, but more importantly, money is a culture.
People have made crazy stories up about "the origin of money" for a long time; Adam Smith makes up a zany story about people agreeing to use chunks of metal to make change for bartering because it's too hard to keep chickens in your wallet when you need to break a sheep[1]...
The notion that people gravitate to metal vs "fractional sheep" is without historical evidence. People in fact, a long time ago, did trade things like IOUs or pieces of broken reeds or sticks[2]. Those sticks acted like IOUs and were often traded around far past the original parties to the contract.
Money is a contract between you, your peer/counterparty, and whatever organization you "trust" to mediate if someone really isn't happy with the outcome of a situation.
I mean, cultures are also a kind of technology, arguably one of the first we developed as Homo Sapiens.
In my view the actual issue has always been that cryptocurrency folks don't understand what purpose money serves, mostly because they're all basically gold bugs. To strain the "money is a technology" metaphor, this is a product-market-fit issue -- like trying to build a cloud orchestration framework that only works on DIY Belwulf clusters or a web framework that only looks nice on teletype.
You get in on the speculative promise of making yourself wealthy. It's sold to you by the people at the top, and the message is amplified by the grifters and the pick mes in their orbit.
It's never been a convenient exchange of money. If they'd focused on this, maybe the argument would have worked. Instead, it's wacky and has the worst UX of any banking apparatus in the world. Including giant US banks stuck in 2005. This sucks because this is literally the value being sold, and it doesn't deliver on it at all.
By the time quantum chips can attack crypto's underlying hardness (2029?), most of the coins won't have the engineering talent and support left to migrate to more secure cryptography. We'll start seeing shit coins popped left and right, which will cause mass panic. That will cause sell offs, even if the big name brands manage to secure themselves temporarily.
Post quantum cryptography is not fundamentally that hard, the only issues are the signatures are bigger (so the chain is less efficient), and migration of existing chains (biggest problem).
Quantum computers might harm BTC or some other chains if the devs can’t get their house in order soon enough, but there’s no reason to think it fundamentally alters whether cryptocurrency is mathematically viable
Or if you read Sapiens you'll know money is a story we tell each other. You can't literally do much with a coin or bank note or numbers on a screen but as long as we all believe it has value, it does. It becomes part of the culture, as you say.
Crypto also has to tell a story about why it's valuable. There was a lot of anti government rhetoric and fear mongering (from libertarians) but the public never really believed the story was true. It was a lot of FOMO.
NFTs failed completely to sell their story but crypto is still hanging on among its supporters. AI is telling a similar story about the value of tokens which is being well received
Fiat currency isn't just a matter of belief or stories. If you interact with the US financial system in any significant way then you're likely to end up owing some income taxes, and those can only be paid in US dollars. If you don't pay then eventually law enforcement officers will seize your assets (real estate, cattle, gold, cryptocurrency, whatever) by force and auction them off to settle your tax debt. And if you try to stop them then they'll shoot you. Overall this is a good and stable system. The cryptocurrency clowns never seem to address the sovereign taxation issue.
While that is true, the overarching point is that it fundamentally still is, just a story.
You're just describing real world consequences, precisely because humans/societies believe in that story and enforce it.
By that logic, most everything other than a club to the head is "just stories". Hume points out in a Treatise on Human Nature that most of how we interact with the world is through a coherent hallucination provided by sense organs that tell very narrow stories, but when stitched together form a cohesive whole. You're almost doing the equivalent of saying that gravity is "just a theory".
> Fiat currency isn't just a matter of belief or stories
... Then how do we, as a society, determine how much a dollar is worth?! We do use force to enforce the stories we tell about fiat. But 'believe this story about how much a dollar will buy you and how much you owe, or else we will send thugs to your house' isn't disproving the point at all.
"but as long as we all believe it has value, it does".
Would one argue that an airplane is a _story_ ? If no one believed in the technology and lost faith in all pilots no one would fly. But that doesn't change the reality of the technology and competence of the pilots.
I get the sentiment, but I am not sure _story_ is the right word.
Well no, an airplane is a tangible thing that can fly, and as long as the safety culture of the people responsible for flying airplanes is strong enough, so crashes are very rare, people will fly with it.
Currency OTOH is basically a (forgery-proof) piece of paper with a number written on it, or even just a number in a database on some (hopefully well-protected) server. So it can only be used to buy stuff as long as we all agree that it's worth something. Of course, it helps if a government and/or a central bank is behind it, but even without a functioning government, a currency can limp on for decades, such as in Somalia, where the last banknotes were printed in 1991, but people still used them as the lowest "rung" of a three-tier system consisting of the Somali shilling, the US dollar and mobile phone payments, until recently when businesses sort of agreed to not accept them anymore (https://www.theguardian.com/world/2026/may/11/poorest-somali...).
> but crypto is still hanging on among its supporters
From what I last heard about crypto miners, the price of mining is not enough to justify price of rig + electricity, so they are quietly switching to
AI.
You can sell scams -- LLMs may be dubious at many tasks, but they're probably good enough to use to write personalized email or texts convincing random people to send you money.
> There was a lot of anti government rhetoric and fear mongering (from libertarians) but the public never really believed the story was true.
The public never believed it because it runs squarely into the basic fundamentals that underpin the global financial system.
The finance industry learned long ago that currencies have to be stable and predictable in order to be trusted, and therefore NOT financial instruments to speculate heavily on. There's been this reality distortion field that crypto can be both a currency and speculative asset, but that hasn't borne out. If your digital dollar can gain/lose 5% of its value in a day, how do you trust it to transact with?
Crypto has been speed-running into many lessons we learned decades ago from the "Free Banking" era before the Fed, back when states ran their own banks, currencies, etc. Government got involved in banking management as a way to improve the stability and security of the financial system since things like fraud were rampant.
Honestly as much as people complain the US Federal Reserve really just proved their enormous value and thoroughly vindicated fiat currency. The financial crisis of 2007-8 should have been a new Depression and it wasn't. Instead we've seen uninterrupted growth for close to 20 years. Markets have really internalized that the US economy is indestructible and the Fed will always protect us from disaster. Will it last forever? Of course not. But like Keynes said, "in the long run, we're all dead".
Euros, dollars, pounds, francs, and yen are all more stable and easier to use than cryptocurrencies.
It gets even easier once you toss in Visa, Mastercard, Discover, Amex, various debit card and regional networks, and ubiquitous banking services. Checks and online ACH payments are free or nearly free. Payment card platforms are cheap in consideration the value you get for them.
Meanwhile actually spending crypto is quite expensive - worse than Visa’s transaction fees, and far less consumer and merchant protections.
Banks racked up huge losses on subprime mortgages, get bailed out to save customer deposits which the banks continue to profit from, most bank execs walk away scot-free, and that's a vindication of the system? They literally gambled with customer funds, lost it all by enriching incompetent sellers of bad MBS, and got it replaced by the government. With the money supply being inflated from the replacement, the only people who benefitted were the bad actors who still have a share of the now diluted supply of customer funds.
The fundamental structural problems from 2007-8 are still here. The system has been running with paper over the cracks in the foundation for almost 20 years.
Every system ever has been a patchwork. Dodd-Frank and it's orderly liquidation rules are a genuine benefit. We had a commercial bank collapse a few years ago and there was no contagion.
I've played with crypto enough to be amused, like you I like some of the tech - especially the Hedera eco-system. Dabbling in crypto helped me help the wife start a plant store we had for a couple of years. It's always been a hobby. I think things like decentralized IDs (DID) - while not directly crypto related, often land in tech discussions of such - and the like could likely be useful for some of the AI related identity work going on at the identity level.
Some nice loss harvesting in the past will help with some other financial moves down the road. I'm definitely checking in now and then, but mostly see it as background noise.
When people in a developing country cannot hold foreign currency it is a result of a deliberate decision by their government. That creates a number of issues. They may well be breaking the law holding stable coins. It means practical difficulties in buying stable coins (they need someone who will sell stablecoins in their currency).
> (they need someone who will sell stablecoins in their currency).
It's pretty hard to really lock people out of stable coins really. You really just need someone to sell you some type of cryptocurrency that can be eventually exchanged for stablecoins. You can even do "peer to peer" trades if the government really cracks down on holding crypto.
I agree with the sentiment of this article but atleast some parts of the world with poor currencies like Latam have seen some benefit from stbales.
Right! It's not that stable coins are decentralized, it's that the centralized holder is not in your jurisdiction and so your jurisdiction can't deface their money!
The US has no reason not to pay its debts. Its debts AFAIK are USD denominated. How often has a country defaulted on debt in its own currency? I can think of one example and I thought it was a stupid thing to do at the time (it was forced by creditors, presumably as a punishment) and it was not a complete default, but a haircut.
I live in less developed countries so it is actually useful for me but I see it the same way as you wrote here.
Low-life businessmen ruined the technology outside of some spaces where there is strong tech leadership. They did too much damage to reputation of the whole industry
I absolutely believe this, it attracts developers that can see the idealistic potential. It is worthwhile to do your part for an ideal future.
The fact that you your vision is undermined by a determined group of profiteers doesn’t diminish the value of what you can accomplish toward an ideal future.
I don’t think I’ve ever worked with anyone in engineering who I would consider degenerate aside from the occasional crypto supporter. Even 30% seems like a scary high percentage of degenerate engineers.
Agriculture. Plumbing. The printing press. Electricity. Vaccines. Fiat money itself, which is a technology that is better than the technology of barter, which is better than each person having to grow or make every material thing they need.
I think it would be a reasonable definition of "social problem" that it requires two people to have it, and that they must have it in relation to each other, which is to say, some sort of social interaction or communication must be involved as well.
Sanitation is a problem for one person as well, as is health. Social problems arise specifically with the interaction of two people. You can't have a scam without two people, for instance.
Definitions that collapse the entire space under discussion into one category are useless. If sanitation is a "social problem" then everything is a social problem, and the reason why that is useless is just that a definition that does not distinguish has no utility. In mathematical terms, to say that something conforms to that definition yields zero bits of information. "Public health" is its own category. In the real world no two categories can ever be fully separated from each other but just because plausible scenarios can be spun out in which sanitation becomes involved in a social problem doesn't mean that on the whole it is much better understood and talked about as a separate category.
Crypto has social problems. If one person sits in a basement and "does crypto" by themselves who cares? They can declare they own as many basement-coin as they like. It takes a second person to have a problem.
The original post said plumbing, not sanitation in general. Plumbing mostly solves a problem that arises when you have large groups of people. An individual or a small tribe can keep the waste and drinking waters separate by walking downstream a bit.
>If sanitation is a "social problem" then everything is a social problem
Social = society, keep that in your head.
The vast majority of problems you are going to face in your life are social problems because you live in a vast interconnected society with millions/billions of other individuals.
And it is important to remember that almost all problems are social problems, we get a quite a few of the libertarian types on HN that think "I'll just ignore other people and now I've solved every problem in the world". It's why this group of people thinks this way, it makes the problem way easier if you ignore reality.
Money, and the assorted scams around it, regardless of what type of money it is, is a social problem by definition.
> And it is important to remember that almost all problems are social problems, we get a quite a few of the libertarian types on HN that think "I'll just ignore other people and now I've solved every problem in the world". It's why this group of people thinks this way, it makes the problem way easier if you ignore reality.
You see this a lot from people who have been lucky enough to live in places where problems get addressed somewhat automatically. When you spend enough time in places where that isn't true, you quickly realize how indoor plumbing - or almost anything, really - becomes a social problem.
Sanitation: If your neighbour has unmanaged sewage, it is certainly not a problem that is limited to them.
Health: If your neighbour has a contagious disease, that is going to be an issue for society as well.
Are we going to pretend that COVID as a problem doesn't fit your chosen definition perfectly: "two people to have it, and that they must have it in relation to each other, which is to say, some sort of social interaction or communication must be involved as well."
Sanitation and health are social problems because if they are not handled they have an extreme effect on society in general. Hell, for plumbing we ONLY care about it as a social problem. If you go live somewhere far enough away from people, we don't care if you shit in a bucket. If you live in a city, we absolutely care about the social effects of not having sufficient plumbing.
If my neighbour has a broken TV, that's a problem that will never affect society. If my neighbour has a contagious disease, or even a non-contagious condition, there are a LOT of ways that affects society.
Same with a neighbour with plumbing that isn't up to code. There's a reason we send government agents in to verify plumbing installations, but we don't give two shits about your TV setup.
I suspect that anyone that says that plumbing or health is not a social problem is living in a place where those things are handled well enough as a social problem that you have never seen what happens when they aren't handled.
I agree with you on the uselessness of definitions that don't distinguish anything, and I think your conceptualisation of a social problem as being something that requires multiple people to interact (like a scam) is useful, admits a very clean boundary, and deserves a name. I would call such a problem a purely social problem. But I think there is a broader concept of "social problem" that makes sense too, even though it lacks such sharp edges.
I think it's reasonable to say that a problem is a social problem to the degree that its severity as experienced by one person depends on other people's behaviour.
If I accidentally drop a rock on my own foot, this seems to be obviously not a social problem. But if I am more likely to be carrying a rock in the first place, or less likely to be wearing protective shoes, because of how society is organised, then to that extent I claim that it is a social problem. This is not an abstract example: Over time, changes in society's attitudes to dangerous kinds of work have directly, and indirectly through health and safety legislation, led to massive reductions in workplace harm since the Industrial Revolution.
Under this rubric, all it takes for a problem to be social is for it to be possible to imagine that society being organised differently would lead to a different level of suffering. Does this lead to nearly all problems being classified as social problems? Yes -- but that is not a problem in itself, that is just an accurate picture of reality! It is still useful -- indeed much more useful -- to place problems on a spectrum of social-ness; nothing "collapses" unless we are determined to make a black-and-white distinction.
You're putting words in my mouth. "Public health" deals with social problems regarding health, but it's a subset of "health" which also includes problems that are not social in nature.
There are absolutely social issues around vaccines — how do we fund their development? how do we distribute them? how do we convince people to use them? — but as a technology I would say they solve a problem that is mostly independent of human relationships.*
* Obviously, you could say that vaccines actually do solve a social problem because pathogens are often passed between humans, but I think then the definition of "social problems" becomes so broad as to be meaningless.
"how do we stop dying from pathogens" is like, the textbook public health problem. it's pretty much the question which the entire concept of public health spawned from.
so, if you specifically wanted to talk about the technology of vaccines or whatever instead of general pathogen prevention, you should just say that instead. i cant read your mind.
How do we maintain large urban communities is a squarely social problems, and parts of it are amenable to technical solutions such as wastewater management, supply chains, large scale agriculture, etc.
All problems are social problems in that sense, but that's not what I meant. And if fiat money (as in, a type of social contract) is a technology, then anything is a technology.
I think the point that is missed is all of these solved real problems that needed solving. I feel over the last decade we have exhausted the obvious benefits of the Internet revolution and more often than not we were seeing clever technology being developed, that wouldn't solve any problems. Then long and painful search for applications of that technology would ensue. Cases in point: crypto, llms.
I'm not sure I agree on your definition of legitimate...
If we want to say that any value generating - including crime - is inbounds, then LLMs are FANTASTIC scam machines. There are incredible uses for LLMs in a lot of stealing money spaces.
From a stablecoin perspective holding USDC or USDT is almost like having a bank account with a bank who, for the most part, allows you to maintain your privacy as an individual. They don't need a name, address, phone number, etc. They also run on infrastructure that exists beyond any single jurisdiction and spans countries and continents. This means that bank account can be used anywhere that has internet and people willing to transact. No government can keep you within their confines by holding your funds hostage nor can political leaders (or others with positions of power) use those controls to silence public outcry or civil disobedience.
Exactly. Cryptocurrency is useful as as a backup system against failing/weak institutions. Just that. Like insurance, it was not there to make anyone's lives better but simply to become a safeguard to avoid complete collapse.
You're in Crimea right now. You want some gasoline. You have some magic numbers in your magic rock. It needs you to cast a spell to transmit those magic numbers to someone else. I guess it probably also needs ... some electricity and some network access and some time to make those magic numbers update in the gas station's magic number.
In what way is this actually going to help you in a total collapse? Let's stand around over my iphone and cold wallet and spacex terminal while we wait for things to beep the right number of beeps?
In the off-chance you find yourself in this situation, what's to stop the party with the gasoline from just pointing a gun at you or your corgi and asking you to add some zeros to the number of magic beans you're zapping into their magic number?
Now, perhaps you as an international agent of mystery, can use some shiny rocks or magic pieces of paper to make your escape, and you can then, once safely back in a stable society, use your magic numbers and spells to transfer "wealth" to some organization closer to your new physical location (let's say belize?) -- in which case, to avoid a bunch of tedious laws and such, perhaps that magic trick will work in the way you suggest.
But, when things go haywire and there's just Hobb's all against all, I'm not sure a magic cold wallet of certificates is going to do much.
If it was just a backup against failing/weak institutions it would be relavively benign, but the problem is that it incentivises machiavellian types to undermine society and nation states for their own personal profit - see e.g. The Sovereign Individual[0].
Combined with effective accelerationism[1] you can see why we could be heading towards somewhere a whole lot worse than The Bad Place.
It doesn't even do that. If there's complete collapse, there won't be a reliable network to transact over, and not reliable electricity to run the network and do the processing.
What are you thinking of when you say "complete collapse"? Zimbabwe's currency collapsed yet they still had access to electricity and a networks. It sounds like you're envisioning an apocalypse.
However, I think there's an argument that the existence of that backup, or at least its marketing, might of itself encourage people to make the institutions fail so they can profit from it.
That's a weak argument. If the institutions can collapse because a few powerful people can work against it, then the institution has already failed in the first place.
Trump and the general rise of Populism is not the cause of the fall of Western democracies, it is a consequence.
You're going to have to show your work on that one. Western democracies are suffering not because they are failing, but because they have been chipped away at for decades by fanatical right wing billionaires intent on eliminating taxes and securing their place in a perpetual oligarchy.
> Exactly. Cryptocurrency is useful as as a backup system against failing/weak institutions. Just that. Like insurance, it was not there to make anyone's lives better but simply to become a safeguard to avoid complete collapse.
Meh, it's arbitrage against slow moving financial regulations.
There are times when financial regulations are "bad" in a way that this trait is desireable - i.e. your failing institutions use case - but in many cases these regulations are, actually, there for a reason.
And now in practice crypto transactions for "normal" people are performed by bank-like institutions who log every transaction anyway, so this characteristic is really only valuable to the people deeply involved in the crypto world who are using it mainly to do "normal" crimes.
My only take away with crypto is, think of that one movie "In Time" but instead of the whole time = currency concept and the arm clock, what if crypto could be applied to a physical piece of e-paper like thing, where it says what its worth, and its worth what it says, you can transfer it on a whim from the paper to your phone (to a wallet) and back and forth.
If anyone figured that out, fully seamlessly, fault tolerant, that alone imho would be worth investing time and attention into.
Basically make the crypto real and physical, something fluidly tangible to where everyone can hold it and understand it.
No one can hack your wallet if all your "crypto" is not in it. You can spin up new wallet on a whim.
The only real way I can think is something like how monero works, where whoever owns a coin can "decrypt" said coin (or that's my limited understanding of how monero works).
That's the idea---to my mind---that's worthwhile for crypto to work toward. Something that has all the traits of cash but that can be used over the internet.
As an outsider not paying too much attention, how do you beat the ledger problem? Crypto only works if there is a ledger. I don't want a ledger of every transaction I made. Seems like an insurmountable fundamental privacy issue.
Framing the ledger as the problem seems strange. It's more accurately the solution. The problem being how you transfer value through the internet in a trusted manner.
Re: privacy though, there's many solutions. Single tailored chains for privacy, mixers, encrypted tokens, permissioned chains, etc.
In my experience, privacy, while important, is not something users actually care about enough to demand a solution for. Most web3 users today just want to degen and gamble, and they're okay with KYC to do so.
Ethereum based research projects are addressing this.
There is a currently active and usable project called Railgun which allows for hidden balances and transactions. Aztec network is launching soon which is a fully private L2 chain. It has taken a really long time but it seems the next few years will bring real privacy.
I highly recommend the recently published The Almighty Dollar: 500 Years of the World's Most Powerful Money by Brendan Greeley. It's an accessible look at how individuals, governments, markets, and value all intertwine to create a stable and widely used currency.
> The only real use case that makes sense to me is giving people in developing countries access to a stable currency they can actually hold, trade, and invest in, meaning USDT or USDC. Outside of that, as an EU/US citizen I don't see why I'd hold stablecoins instead of fiat
The logical conclusion of this train of thought (which I agree with) is that people who heavily invested in crypto may significantly benefit from weakening strong currencies and institutions. Make of that what you will.
I'm not into it but I'm fascinated by the cryptographic aspect and the legal aspect of it all.
> Outside of that, as an EU/US citizen I don't see why I'd hold stablecoins instead of fiat.
Especially as an EU citizen: in the EU it is illegal, by law, to have stablecoin yield. So for example the HN unicorn Coinbase can give 3.5% yield annualized (or whatever the current yield is), automatically, to anyone in the US that owns USDC. But in the EU the very same Coinbase is forbidden, by law, from giving the same yield on the exact same USDC.
Now I'm not saying the yield on EUR on a EUR bank account is exciting: what I'm saying is holding a currency losing to insane inflation and which doesn't give anything back is wild.
And it's only for stablecoins: for example as an EU citizen on my brokerage account, where I have real USDs, they automatically yield when they're idling.
So it's not that you cannot get yield on currencies in the EU: it's the way they categorized stablecoins.
Now as I understand it there are ways to get yield on stablecoins in "smart contracts" but that's another can of worms for IIUC atm there have been scams upon scams upon hacks upon thefts upon neverending shenanigans.
> as an EU citizen on my brokerage account, where I have real USDs, they automatically yield when they're idling.
"money market fund". If they're yielding, they're holding bonds. Normally this distinction doesn't matter, but we're deep into financial plumbing here.
You spin up agents and want them to paid without opening a bank account... or spin-up hundreds of agents... or your country isn't very well integrated with western banking rails. I think there is more to consider.
The amount of money you can load or receive into a debit card is limited without doing enough KYC overhead you could have gotten a bank account with the same effort.
If you try automating bots to do KYC for debit cards what you'll be doing is basically looking like a money launderer and get all your accounts shut down.
If you're fine with the usual 0.20 - 0.30 USD of processing fees, you definitely can. Cards work well for many things; micropayments are not one of them.
> I believe with x402 and USDC you can pay as low as $0.000001 per HTTP request with no fees.
On-chain transactions are still not free. x402 isn't settled in batches or rolled up anywhere AFAIK, so large volumes of tiny payments are still not cost-effective. Facilitators such as Coinbase only subsidize transactions up to a point: https://docs.cdp.coinbase.com/x402/core-concepts/facilitator
I use crypto for exchange between friends (US + EU) and myself (SE Asia).
Our options are IBAN (slow!), WesternUnion (fees, denials, hassles) or crypto (10min, cheap). We chose crypto - because it’s the practical path from their bank to mine. CashApp and Coinbase interface with my actual bank accounts, on my end.
If you don’t do international banking, then much of the utility is diminished — so I’m not surprised by your perspective. But once you try to move money between continents, even with ID and documentation, you’ll understand that Coinbase is a godsend.
This actually applies to the US as well. Anytime you need to send $1k+ to a stranger the process is a pain in the ass.
> ACH, most bank does not allow send to stranger, and it takes 1~3 days for settlement among those which allow.
> Wire, expensive ~$30 per transaction.
> Paypal/Venmo/CashApp, Schrödinger's fraud trigger you never know it's gonna work or not. Plus they report to IRS so more paperwork during tax season.
> A lot of banks report every transaction of your checking account to credit bureaus.
So stable coin is my preferred way, and luckily among my circle it is widely accepted. Any amount is instant with a few cents fee at most.
Very similar use case but even for smaller amounts. I try to be as free software as possible so USDC is my go to alternative to Venmo/Apple Pay. I would use GNU Taler if it worked with U.S. banks.
You can make the fees rather than pay them if you make the market. There are decentralized exchanges where this can be done ~trivially for even low amounts. The fees are for those who want instant gratification.
Yes — there’s fees converting from/to fiat and when sending the crypto.
You’ll generally have the conversion slippage and transaction fee regardless - so the difference is the second conversion.
In practice, that isn’t too expensive and worth it for the speed; though that may change if you’re sending larger or smaller amounts than I am (in $1k-10k range).
Edit:
Replying by edit due to rate limits — but subcontracting and personal loans, eg, until a client pays.
Being a consultant is hard; being a consultant with no support network is harder.
I use Wise often to move money between USD, EUR, and AUD, and it plugs right into my US credit union and brokerage accounts. International transfers settle in under a minute to Australian and European bank accounts in my experience.
Wise, like any other fintech is fun until it randomly closes your account and bans you. No one can ban you / freeze your assets with Crypto, that's a good selling point imo.
Only if you stay in cryptoland. As soon as you hit someplace with fiat rails, in a jurisdiction that requires adherence to regulatory requirements, your account is just as regulated.
Wise, like any other fintech is fun until it randomly closes your account and bans you. No one can ban you from Crypto, that's a good selling point imo.
When you send USD to an AUD account via Wise, no money actually travels between the US and Australia. Wise maintains massive pools of local currency in bank accounts all over the world. When you deposit USD, it goes into Wise’s US bank account. Wise's software detects the deposit and instantly triggers an internal payout from Wise's Australian bank account to the recipient's AUD account. Because Wise is using local banking networks on both ends (like FedNow or RTP in the US, SEPA Instant in Europe, and NPP/Osko in Australia), the transfer can settle in seconds. It’s essentially a matching engine, not an international wire.
Credit risk and identity dictate the speed of the funding step. If you stripped KYC out of the equation entirely, the bottleneck wouldn't just be speed — the legacy banking system would refuse to route the transaction at all.
It is important to distinguish that you are fundamentally involved in a credit network, pulling funds not pushing funds, that just gives the illusion of speed. For verified users, the sub-minute speed is a mix of local real-time banking rails and Wise extending short-term trust that the incoming funds won't bounce. For an unverified or high-risk user, Wise forces a holding period until the money physically clears, dragging the process back down to standard banking speeds.
Neither does money "travel between the US and Australia" for a regular old SWIFT and correspondent banking based international bank transfer. When you send money internationally, your bank also "taps into pools of local currency" of their various correspondent bank(s). All of this could also happen instantly if they wanted it to; SWIFT is a real-time messaging network.
Wise's innovation was to provide their service "over the top", i.e. unbundle wire transfers from your bank's default offering. This has driven down both speed and pricing, in the same way that dial-through (e.g. calling card based) long distance carriers created massive competition and drove prices down in long distance calling, while under the hood it was all still just regular phone calls.
When you send USD to an AUD account by any mechanism no money actually travels between the US and Australia. Usually USD is transferred from one US bank to another, and AUD is transferred from one Australian bank to another.
They're not available everywhere, and the neo-banks in general are tightening their processes to a point where they're becoming difficult to use. I've had multiple situations now where Revolut denied things like a tap payment at a restaurant in NYC because it was an "unknown recipient". Of course they don't notify you of it, leading to an awkward 5 mins with the waiter while I rummage through the app to figure out why I can't use my own money this time. Fast and convenient it ain't
I suspect parent is using "a service like Wise" even though they believe they're using Crypto. That's because for an end to end transaction to complete in under 10 minutes it has to be performed by an exchange (not actually settled on chain). There are many cases like this where the "crypto" part is just theater. Money is being moved the tradition way by altering records in a non-distributed database.
Depends on the chain. Some networks are quite fast.
But it could also be theater, yeah. A friend of mine buys USDT on a P2P exchange and immediately sells it (so, sends money to a stranger’s bank account and then gets paid by another stranger). It could just as well be some e-wallet thing like WebMoney or whatever, but the fact that you can move USDT to your own wallet instead of immediately selling it makes it a bit more reassuring I guess.
Cryptocurrencies have a great and really boring application. You have to think "who needs a reliable ledger distributed among many entities?"
The answer is institutional banks the likes of JPMorgan. They have a few cryptocurrencies, you need to be another large bank to use them. Big banks send each other large sums of money constantly back and forth. In no sense do they send each other "real" money, it's just accounting... a ledger.
"Cryptocurrencies" are better thought of as mathematically proven accounting software than money. Plenty of organizations need to be able to keep track of money is between a collection of mostly-trusted peers. With cryptocurrencies they can ditch a lot of the transaction and accounting software.
But a regular database can do that with PKI. Crypto isn't just a reliable ledger -- it's a reliable ledger between an arbitrary number of mutually distrusting parties. Which doesn't really describe banks in a regulated, functioning economy.
What's your definition of a "regular" database? If you need a distributed, well-sequenced, auditable trail of cryptographically signed operations representing the transfer of value, that quite literally can be fit to match the definition of a blockchain.
People who haven't done it probably underestimate the incredible amount of fiddly nonsense is involved in actually writing accounting software to handle a ledger.
Banks and brokerages very often use software written 40 years ago because it's so much trouble to get correct.
Not that I don't agree, but PKI relies on a trusted authority which can be compromised. If you're running a trustless system, basically any party can be compromised but the blast radius is limited to just the compromised infrastructure and money, not the entire system.
No, a regular database can't do that "with PKI", you have to write ledger software on top of it and you have to have one party operating the software.
cryptocurrencies are the ledger software, API, and data store layer -- and you do need trust between peers because the JPMorgan will take actions to reverse transactions if there are problems that need fixing.
It's not magical, but it is convenient for the actual ledger actions to be mathematically proven instead of the result of accounting rules in code.
> In no sense do they send each other "real" money, it's just accounting... a ledger.
"Real money" these days is exactly that, i.e. accounting entries on a ledger, and has been for the better part of the past century or so.
> Plenty of organizations need to be able to keep track of money is between a collection of mostly-trusted peers. With cryptocurrencies they can ditch a lot of the transaction and accounting software.
What is blockchain technology if not even more complex accounting software? It has its uses, but a network of mostly trusted peers is probably not one of them.
The fascinating thing for me to watch in real time is Crypto Bros discovering in real time exactly why the financial system works the way it does. It didn't happen by accident. It's 5000+ years of incremental changes. Reversible transactions? Feature, not a bug. Expandable money supply? Feature, not a bug. Fractional reserve lending that essentially creates money? Feature, not a bug.
I remember saying this about Google Wave: it was a solution in search of a problem. Cyrpto specifically and blockchain in general is absolutely a solution desperately in search of a problem. And I honestly think not enough people were honest about their motivations. They saw Bitcoin go through the roof and were eager to be on the next rocketship, which never happened (well, there's Ethereum but it kinda happened at the same time although it started later).
It's been a sea of shitcoins and rug pulls ever since. Anyone rmemeber NFTs? Just another scam on top of a scam to sell more crypto.
Sometimes there's an advantage to an outsider's perspective on a problem space. It's the essence of disruption. But way more often than not, it's just snake oil salesman looking for a quick buck. And trying to disrupt the financial system without understanding it has shown itself to be a dismal failure, kinda like the graveyard of "Google killer" search engines in the 2000s and early 2010s.
Hate to break it to you, but anything can legally be taken away from you by the justice system. And fighting the government can put you in prison, too.
Usually LARPers are conscious that they don't have magic or any sword skills. I'm pretty sure the person who you respond too really think what he wrote.
Yet the government went out its way to ban bearer shares, bearer bonds, numbered anonymous bank accounts, large denomination currency, anonymous companies, and all the other methods of anonymous banking.
Seems they were having trouble "taking it away by the justice system."
For the same reason government across the world have pressured or banned exchangers of monero.
GP added the "by the justice system" where OP only said "can be taken away". Both digital and fiat currency can be taken away from you through courts, legislation, trickery, or coercion.
Crypto is surrounded by vast amounts of misinformation, misdirection, or misunderstanding. So you get these myths and generalization propagated through lack of education. "I heard crypto is completely anonymous", "I heard crypto can't be taken away from you". Then someone gets tricked out of their crypto, or uses BTC to commit some crime and gets a quick reality check.
If you toss a bag of cash in a hole buried under a grave in Timbuktu, or toss a bitcoin seed phrase in there. Cover it up, leave Timbuktu back to your western country. Then vow to die before giving up the location (you can claim torture or whatever works, but many people in history have decided to be tortured to death without giving up the information). You can be essentially 100% assured it will never be taken. Possible with both fiat and crypto, though you'll be digging a bigger hole to bury an upward amount of dollars, yet crypto is infinitely scalable with the same size hole.
From a black and white viewpoint the possibilities are the same but the practicality is a bit different (then realize with crypto the hole might only exist in your mind). Maybe the government has control over your body but there is some victory in not letting them have your assets even if they take your life and without having to destroy the underlying value.
Personally I think a cleaner distinction is bearer assets vs titled assets. Both can be taken but bearer assets can be made impractically difficult to seize, especially against the masses at once, whereas titled assets (like bank accounts and deeds) can be taken by the government trivially (ex: in US, IRS can freeze without even a warrant) and at mass scale quickly.
If you're being detained for the rest of your life while your money languishes in a hole in Timbuktu, it has been taken from you. Money is only valuable because it has utility. If you can't use it, it's not yours.
Then you've already yielded the difference in practicality. Executing or detaining a person for life is less practical for the government to do in western countries (and even most shitholes, as ungovernable militia back regions would resist such violence) than seizing your titled or banked assets.
The mere fact you've delayed the use of money doesn't mean the value is gone. I can't do dick with my money until I've at least logged into amazon or driven to the local walmart, yet it's value remains, of course the longer I have to wait to spend it the worse it is. The time value of money means its less valuable to me if I'm locked up for decades before I can get it, but even in jail indefinitely I could secretly reveal it to a friend who could share the money to get some nice ramen packets or cigarettes.
> You can be essentially 100% assured it will never be taken.
If we take the creative approach, then according to the equivalence of inertial reference frames in the principle of relativity, taking you away from the money is exactly the same as taking the money away from you. Taking the money from you don't imply someone else must have it, just that you don't. Someone could take your HW crypto wallet even if they can't access the money, happens a lot with wallets confiscated by the government.
But ok, the original goalposts were set at the difference between stablecoins and fiat with regards to how easily they can be taken away from you. There is no difference for all practical purposes in any non-hyperbolic situation.
>If we take the creative approach, then according to the equivalence of inertial reference frames in the principle of relativity, taking you away from the money is exactly the same as taking the money away from you. Taking the money from you don't imply someone else must have it, just that you don't. Someone could take your HW crypto wallet even if they can't access the money, happens a lot with wallets confiscated by the government.
It's not the same. That's why governments and the FATF at great cost and effort spent decades snuffing out anonymous bank accounts and bearer assets, they didn't do it for the lolz. If you take the person away from the money then any surviving persons can escape and reclaim the money. The person in jail can utter the code/location to a comrade, maybe even before they go to jail. In a western country, the person might even be released from contempt after a time (decades+ contempt sentences are so rare they make headlines) and if criminally charged they will often be out on bond where they can utter the location/codes to others. It's a completely different animal than the government seizing the actual asset and putting it in its vault guarded by armies of police or military as non-human seizure.
>There is no difference for all practical purposes
I used that because it was charitable to the fiat argument because you could put both the fiat and crypto into the hidden hole in a way that would make seizing fiat money as difficult as seizing the crypto. If you don't like that, you can simply memorize a seed phrase in your head, it will accomplish essentially the same thing in a far more practical and more commonly practiced manner. If you insist on the realistic case it's far more charitable to crypto than fiat but I stretched it to be kind to your argument -- clearly a mistake since you only took it as an opportunity for hostility.
Why do you think stablecoins cannot be taken away? There are already many cases where eg Tether got a court summons and handed over the contents of certain wallets to the local authorities.
The original stablecoin, DAI, used since 2017 by a lot of people living in countries ravaged by horrible inflation cannot be taken away.
It can just be a smart contract with overcollaterised crypto backing it. And the idea is kind of genius.
All the USDT and USDC which appeared later on a just "proxy" for "real" dollar hold by Tether or Circle. There is nothing permissionless or decentralized about them.
So "stablecoin" can mean very different things in practice.
DAI (now called USDS) is largely backed by assets well within reach of US financial regulators these days, no? Even a few years ago, it was mostly backed by USDT and USDC, which both can be frozen by their respective issuer.
I don't think any of the non-custodial stablecoins had a very good track record even just in the medium term. Overcollateralized crypto-backed stablecoins are exposed to the market value risk of their backing assets; algorithmic stablecoins have had a tendency to death spiral.
So DAI is a distinct system from USDS. The relationship is the creator of DAI is the same as USDS and I believe his new organisation maintains the legacy DAI contract and system.
If I remember correctly, the DAI model was beautiful:
- Instead of getting your DAI from an exchange, you could deploy your own instance of a vault, lock your ETH as collateral in it and mint DAI.
- So it was not a unique vault for every DAI but you could choose your collateral assets from an authorized list for your own vault.
I am not sure if in the case of a collapse of USDC and USDT you would have been the only one able to close your own vault and get back your good collateral assets...
Those "decentralised" stablecoins are complex and feel like they had to start from a blank page and create USDS to stay relevant in a more competitive and regulated crypto world. For example USDS has the mechanism to block it for specific holders (like USDC and USDT) but it hasn't been activated as far as I know.
This is why when there is a hack ETH, BTC and DAI are used because they are the "better" money...
In the end I agree, if you can back a decentralized stablecoin with a centralized stablecoin, how good is that system really?
The best stablecoin is the one you deploy a vault for, back it with over-collaterized (anywhere between 3 and 10x) uncensorable cypto (like ETH) and are the only one who can close the vault unless it get liquidated.
That's a beautiful model only on paper. In practice it didn't quite work out, DAI has several times broken its peg (often upwards, but that's still a problem), and they switched to backing it with more and more traditional stablecoins for stability. This was all before the rebrand to USDS.
> Instead of getting your DAI from an exchange, you could deploy your own instance of a vault, lock your ETH as collateral in it and mint DAI.
Most people that might want to use stablecoins don't have any suitable collateral lying around, so they're dependent on being able to buy or sell it at par. If that peg breaks, the utility of the stablecoin decreases.
- Bitcoin was and is a massive, historic accomplishment in creating digital scarcity for the first time and the long term effects are still playing out.
- Virtually all of the "crypto" or Bitcoin 2.0 schemes in the 15 years since have been scams. Essentially a way for a tech founder to mint tokens out of thin air, and then try to convince others to treat them as money so he can get a huge (fiat-denominated) exit. Stablecoins are basically the only crypto innovation of note that have achieved PMF.
Though, there’s a part of me thinking that the basic idea of creating artificial scarcity for profit is hard to separate from scamminess. It’s giving De Beers.
> The […] tried to achieve artificial scarcity for profit. All scammers?
Yeah, I don’t really see a difference between scamming and certain types of rent seeking. So many things could fit in the blank there, not just the entertainment industry.
If:
- you’re not creating value
- you’re exploiting the value someone else has created
- you’re engaging in anticompetitive, anticonsumer behavior
- etc.
You’re rent seeking and the only reason we’re don’t use the word “scammer” is because the concentration of wealth of the western world is built on rent seeking behavior.
I do think there’s a difference between charging a price and creating artificial scarcity.
This isn’t to say that the entertainment industry hasn’t pulled some awful shenanigans. But they’re generally willing to sell to as many people as are willing to pay the price they set. For the most part they haven’t tried to place hard limits on how many total people are allowed to watch a movie and control it with some sort of limited edition resellable token. That was an innovation of the NFT folks.
What are you talking about - the entertainment industry is the most famous scam industry ever, giving the most famous artists just enough money to keep them dependent and pocketing 90% of it themselves.
You are forgetting Ethereum which is the defacto main standard and driver in the "crypto industry". Most of those chains are in fact EVM based (so outside of Bitcoin, XRP or Solana).
The people in and around the Ethereum Foundation are solving very interesting problems but nobody talk about it on HN. For example I believe they are at the forefront of the use zero-knowledge proofs.
Just dig into [0].
Is the Ethereum Foundation and broader project dedicated to pumping the cryptocurrency ETH? obviously not and they are not by far the top holder of it.
The fact that the crypto is not providing real returns is actually one of the main criticism of the project.
Ethereum promised smart contracts where "code is law", but rewrote the rules of their system when a bug was found in the first popular smart contract, the DAO. That's when I lost all interest in it.
I think it’s okay. Crypto devs can’t make a hard fork each time they want to revert something, and even if they do, people decide how much it’s worth to them (by staying on the old chain, like ETC in this case).
People’s opinion is the ultimate law. If you find a loophole in a contract that gives you everybody’s money, people will just take it back.
What is the main success for an Ethereum project that solves something that can't be solved without crypto or in a hugely more efficient/better way? I'm a crypto skeptic and I've never been introduced where crypto actually solves a problem.
Read the GP comment again. I don't know if Ethereum has, is or will ever get to whatever grandiose goal they have. But the one thing that I love has done is provide intelligent people with funds to research things like ZKSNARKs and similar cryptographic constructs.
It's like war: We don't like war, we don't like people being killed, but man, the amount of technology progress made during war is good.
So, even if you hate crypto; the fact that it is enabling research in cryptographic theory (even if for stupid goals) is good.
The first thing is false or worded poorly. Before Bitcoin became globally popular, there were many examples of digital scarcity driving significant transaction volume: Early online games with tradeable game objects, gimmicks like Million Dollar Homepage, etc.
Valve hired economist and future politician Yanis Varoufakis in 2012, when Bitcoin was well below $1000, to study "in-game economies" (i.e. digital scarcity) because it was such a big deal in their existing online games.
Cryptocurrency is very much a double edged sword, on one hand it enables people to transact monetary value bypassing for-profit operators such as western union and paypal as well as hinders corrupt government institutions from confiscating or otherwise devaluing what you own. Of course this also allows people with harmful intentions to do the same, bypass centralized systems that keep fraud in check, mitigate theft and whatnot.
But all I know is that the only reason why some of my friends are able to work remotely from their country is crypto currency as that is the only way they're able to get paid without 30% to 40% being lost in fees as well as being stored in a currency that might lose a majority of its value overnight. They work real, productive swe jobs and earn enough to support not only themselves, but everyone around them as well making the place they live in a tiny bit better.
> it enables people to transact monetary value bypassing for-profit operators such as western union and paypal
You are not even getting rid of that, you are just replacing them with a different set of middlemen in the crypto ecosystem who are demanding substantially higher fees than, say, a Wise does.
It's a very weird comment as people who actually use crypto (not flipping or holding) are those who without other viable choices. They're not replacing something. Those transactions would simply not happen without crypto.
Notice that the parent comment didn't use the word replacing.
Yep, they can open a wise account to send money, but they cannot receive money using WISE, they have to open a business account to receive money and they cannot open one in their countries.
Wise demands a massive fee through bid-offer spread, they're more expensive than many regular retail banks for FX conversion. They're basically running a deceptive advertising campaign due to customers not knowing about bid offer spread.
Wise is even worse than "zero-fee" stock trading platforms like Robin hood who do payment for order flow. At least PFOF is more competitive and regulated and you're only getting a few basis points stolen from you instead of like 80 basis points.
From my own comparisons, when converting, say, $1000 USD with Wise the spread+fee is about half of any of the banks that I have accounts with. Where Wise takes a huge cut is if you convert $10 at a time.
There are pretty big markets in these countries because of crypto and even then it never reaches the native currency a lot of the market uses either us dollar or euro. Businesses are glad to accept dollars and euros for most bigger purchases especially p2p marketplaces. The myth that you have to off-ramp crypto is no longer true.
That depends though. I recently bought a car in south America and they were willing to take USDT through Bianance Pay. As a US person I don't have access to that so ended up having to wire transfer. I don't know why they wouldn't accept a Bitcoin deposit which they could have easily converted to tether but I suspect it's just a momentum and learning curve thing.
And they also make their place they live and the rest of the planet a tiny bit worse due to the energy consumption of bitcoin, if they support bitcoin in any form even with lightning.
A question though: How do they exchange their crypto into local fiat?
> they also make their place they live and the rest of the planet a tiny bit worse due to the energy consumption
Energy consumption isn't the problem. It's how the energy is generated that is relevant to planetary health, and even then, whose to say the tradeoff isn't worth it. Crypto mining is estimated to take up 3% at most which means 97% is spent on other things. What makes this other 97% more worthy of this energy than crypto mining? The fact you don't see it as valuable?
Also many mining operations take advantage of stranded energy, so energy that would go to waste if not used for on-site mining.
But switching from Bitcoin to something based on proof of work is always going to use less energy. Bitcoin was innovative when it was invented, but now it’s antique, inefficient tech that’s still being used because apparently fame overwhelms all technological considerations.
> Can they not manage to open a dollar-backed account somewhere?
If you want to do financial crimes and fraud, you can't (or at least, shouldn't) really do this.
Unspoken by the parent poster is that in practice these people are usually using crypto to break the law in some way, which is why it's valuable to them.
Sounds more like social security avoidance, or general taxation avoidance.
Which country will take 30% cut from incoming foreign transaction? The highest combined fees I could find are for Sub-Saharan Africa and those are below 10%, supporting tax/social evasion claim.
Could be completely legal but when folks don't provide details its often safe to assume the worse scenario when it comes to money, taxation and screwing the government.
What they are often talking about there is countries where the official exchange rate is very different from a real world exchange rate: This happened in Argentina quite often. That led to special black market stores where people would give you local currency for dollars at better rates, and often also had some crypto support. You are then going past the legal market either way.
Possibly? Yes. But for every Argentina, there's 10 other countries where you'd loose (far more than) 40% to social security, taxes, and middleman that will handle all the paperwork for for you, particularly if we are talking about "real, productive swe jobs [that] earn enough to support not only themselves, but everyone around them as well making the place they live in a tiny bit better."
I basically have one such job, living in a stable but bottom of the table EU economy, and 40% is exactly the ballpark.
Crypto has utterly failed as a currency. In that regard it's been dead for over a decade. If btc or eth were currency they'd be considered dead by deflationary spiral which is more or less what every economist predicted from the start. Some people got rich by investing but getting rich off of currency speculation is generally awful for people who rely on that currency to live. Crypto has been a success the same way The Room was a successful movie.
>bypassing for-profit operators such as western union and paypal as well as hinders corrupt government institutions from confiscating or otherwise devaluing what you own
There are transaction fees so you're still paying someone. And the it's not government taking what you own, it's scammers!
Agree re. prediction markets and predatory marketing but disagree so hard with this
> The private interest is genuine, a global market's appetite for a frictionless way to hold dollars, captured by the saver who holds the token and the issuer who books the reserves. The cost is paid by everyone outside that transaction. What looks rational for the individual Nigerian saver is corrosive for Nigeria.
The way this is framed by the author is something like "poor $COUNTRY central bank has its citizens best interests at heart but evil stablecoins are tying the poor central bank's hands". The reality could not be farther from truth. In countries mentioned in the article like Argentina, Turkey or Nigeria the governments are incredibly corrupt and they use monetary policy and capital controls to make loads of cheap financing available to the ultra rich while inflating their debts away. The net effect is that in these countries the combination of inflation and currency debasement is used as a direct wealth siphon from the middle/upper middle class to the ultra rich (the poor have no savings and therefore are less affected). As a result the middle and upper middle classes of these countries entirely evaporated in the last 10-15 years.
Stablecoins are not the issue here, the governments are.
> The private interest is genuine, [...] rational for the individual Nigerian saver
You expand upon that rationale. It is individually rational precisely because of corruption, incompetence, external sanctions and many other situations across the world.
This choice is corrosive for Nigeria regardless of whether the Nigerian government is benevolent or malevolent because American monetary policy is ignorant of what would be beneficial for Nigeria and the more people that make that choice the more the future of their society is tied to American monetary policy. It is an incompetent policy by construction. Now you have two problems: corruption, and an inability to effect monetary policy.
You might think, well if and when we solve the corruption problem we can transfer the stable coin back to effect a monetary policy... triggering the run that will drop the peg because the private entities backing the coin aren't regulated like a bank. Although comically, maybe the American taxpayer will then bail out the entity and the Nigerians will get their money!
I wholeheartedly agree with your comment. Stablecoins are not the problem, they are a symptom. I'm from Venezuela, the country that keeps leading in inflation. Our options are holding a currency that loses half its value in months, buying dollars in the "black market" which is illegal or using stablecoins.
I hate these type of articles because they often come from people that live in a normal country and don't know the struggle to live in a corrupt shithole where you don't have financial freedom nor security
Having worked in crypto analytics briefly, normal people have no clue how much fraud and scams are happening in crypto at the exchange level.
FTX collapsed and was caught but more conservative crypto exchanges continue to use customer funds, trade against their own customers, use insider information, etc.
Even a supposedly "legitimate" exchange like Coinbase is allowing unregistered securities to trade on its platform.
Actually, this industry routinely runs what you'd call "hero marketing," and what makes it especially dangerous for young people is that they're being sold success stories by actors playing people who don't exist, fictional characters who supposedly got rich through crypto.
1.A tiny handful of success stories are pushed to the front.
2.The vast majority who lost money are made invisible.
3.It manufactures the expectation that this time, you could be the one.
4.The price movement itself becomes the reward stimulus.
5.The platform, the exchange, the issuer, and the early investors all hold an advantage in fees or liquidity.
The problem is that this is identical to gambling. But it's dressed up as "finance." The industry obscures the fact that crypto functions as gambling by making people think of it as a new kind of financial asset.
Of course, crypto is technology. It's true that there are technological components, blockchains, smart contracts, and the like. But just because something contains technology doesn't mean the mass marketing around it qualifies as technology investment. Anti-counterfeiting technology is also technology. That doesn't make putting money into circulating counterfeit bills an "investment in currency security technology." By the same logic, the fact that crypto contains technological elements is being used to justify the marketing structure built on top of it, and that, precisely, is the deception.
And for all the talk of decentralization, the reality that USDT and similar tokens end up tethered to a single dominant exchange, heavily coupled to nation states, essentially proves that true decentralization is impossible in practice. This is only natural. Decentralization makes trading inconvenient, so people gravitate toward a single centralized exchange. And at that point, what exactly is the difference between that exchange and a government?
Yes, and: it's not completely exclusive to crypto. The UK FCA had to ban "binary options", a financial instrument using traditional money, due to the high volume of scams. https://www.fca.org.uk/consumers/binary-options-scams
While true about that 'hero' marketing, you can claim the same about literally any marketing campaign, or things like American Dream (TM).
How many teenagers looked with starry eyes into US military recruiting PR campaigns, then get send to Iraq / Afghanistan, and instead of glory and cool adventures that were promised they saw death of peers and civilians on massive scale, they became invaders for at best questionable causes, experienced huge human suffering and destruction... which at the end didn't achieve anything positive at all, neither for US nor for locals, massively in contrary. Heroes look very differently in hindsight.
It's gambling, and it's gambling in dodgy unregulated casinos.
"This guy won big!" is absolutely a part of the marketing that pulls in the other suckers. It's not a counter-example, it's part of the scheme.
I know people who really enjoy a night out losing a 3-digit sum of money in a casino. Somehow they get sufficient reward from that to make the expense worthwhile for them.
The difference is, that unlike the Crypto enthusiasts, they don't afterwards try to convince me at length that gambling can and should replace money transfers, foreign exchange, banks in general, pension funds, the governmental exchequer etc. That would be cultish lunacy.
>Meet Mike. Mike is a college freshman who is exposed to crypto through social media. He downloads Coinbase, buys ten dollars of CumRocket because his friend group is in on it, watches the price move, and feels for the first time the dopamine rush of gambling on non-economic random walks. By his sophomore year he is onto harder drugs: 0DTE options on triple-leveraged single-stock ETFs he does not understand, traded on a gamified brokerage built to look like a video game. By twenty-two he has a Kalshi account, because betting on the outcome of a presidential primary or a reality television show winner has been reframed as participation in financial markets. By twenty-four he has hit rock bottom in the sportsbook, firing off ten-leg parlays on Tibetan ping-pong and third-division water polo at two in the morning because the games he has actually heard of no longer move fast enough to feel like anything. Mike believes he is investing. Mike is gambling. Mike is on the express train to a gambling addiction, and he is meaningfully poorer at every stop along the way.
tbh that reads a bit like the war on drugs propaganda we got in school back then. You don't want to try the devil's lettuce cause in 2 years you will be a homeless heroin addict in San Francisco, or worse!
This is a "vice" thing. Vices are things which match this pattern like alcohol or drugs:
- many people don't indulge at all
- many people indulge occasionally to no real harm
- some people indulge in a way that makes a short term recoverable mess
- a few people get addicted and are unable to stop. May or may not also be harmed at this point, but this tends to lead to cumulative harm
- a few people really mess up tragically
The people in the first few groups can argue "why should this be banned, it's not harming me" with some validity. But there's also people for whom the vice overrides their self-preservation and they get into a bad financial and/or health position, and can only be saved by abstention. They may require help to abstain, such as the UK "legitimate" gambling industry's "self-ban" mechanism.
One thing that does vary is whether "it's not harming me" works out. Booze in particular has massive social consequences, drunk people harm non-drinkers not just themselves. I've never worried that degenerate gamblers leaving a slot machine parlour at 2am will attack me - but outside the bars that's definitely possible which is why they're required to hire security and have police contact
People with big gambling problems do cause massive social consequences. I know of lost family homes and separation that has massive impacts on the kids. Embezzlement occurred at the accounting firm I use due to an accountant's addiction to gambling.
Maybe, surely mostly white collar crime though because of the numbers involved?
Nobody trusts junkies with $100 so it makes sense that shoplifting or burglary can get them the money they need, but a lot of people who have a gambling problem are six figures down, stealing a neighbour's PS5 is a drop in the bucket.
I think this description is deceptive because it assumes bucket sizes ("many," "some," "a few"). Those bucket sizes work for alcohol and some recreational drugs. But they're tragically wrong for others--very very few people partake of heroin "occasionally with no real harm." You're almost certainly heading towards the last two buckets.
Actually there's been studies that show the majority of heroin users self limit their use to, yes, no real harm. The idea of the heroin user that's immediately thrown into an addiction where they start pawning Grandma's TV is propaganda.
True, but if you start counting codeine as an opiate the bucket gets a lot larger. And includes the Purdue Pharma scandal. Lots of people use opiates under medical supervision, with varying degrees of help and harm.
yeah - this is a flawed example, post-Purdue opioid epidemic. Brief tidbits include: real pharm science showed that pain killing effects of opioids are not as effective as some existing, non-opioid medications; sales agents were paid in commissions and bonuses for sales objectives; laws were changed at a Federal level just before the epidemic; the top of the sales pyramid financially benefited in the billions of dollars.
Those pills are actually similar to heroin, yet all of that happened legally in real life, with profits flowing through legitimate financial institutions on a very large scale.
Propaganda always works best when it's true, but selective. People that ended up homeless heroin addicts 2 years after smoking cannabis exist, the propaganda just neglected to mention that they are a minority.
Just like the failure of the war on drugs, trying to ban crypto and arresting anyone that owns it would almost certainly be a dismal failure.
In the US, “unintentional poisoning deaths numbered 75,761 in 2023”
> About 100,000 die annually from drugs in the US alone.
A single substance vs all drugs including prescription, over the counter, and hard drugs while including suicide etc is hardly the support you think it is.
Further actually using the correct numbers and then trying to justify US drug policy based on hard drug overdoses fails when you look at hard drug overdoses in other countries. US numbers are high not because it’s an hard problem, but because our policy is bad.
Well it's not wrong, the solution isn't abstinence though, it's proper education, help for those who struggle with it, and making it legal and regulating it.
Just because the methods used by the war on drugs failed doesn’t mean that drugs are somehow good for you. It just means that the methods were ineffective.
Not just ineffective, but counterproductive. Kids saw through the propaganda and that made many of them discount all warnings about drugs. That’s why we shouldn’t abide well intentioned propaganda.
That's because DARE wasn't propaganda. It was a program that never meant to teach kids anything. It wasn't even meant to try
The point of DARE was to be a cover for getting cops into classrooms talking to kids after the LAPD "Public Disorder Intelligence Division" KGB-esque organization was brought to light and dissolved. Daryl Gates, the head of that program, was the one who approached some academics as a cover. It was immediately discovered that kids who went through the program were more likely to do drugs, but Gates didn't care. Because it wasn't about keeping kids away from drugs.
The entire point of the program was to turn kids into informants on their parent's gang activity. Kids were regularly coerced into narcing.
The war on drugs, due to its targeting of specific socioeconomic and racial groups, is probably not the best analogy here.
While I do get your point about the FUD it generated, a better parallel might be the rise (and eventual fall) of the tobacco industry. There was a lot of fraud and deception in the 20th century about the health effects of smoking. There were ads touting that more doctors preferred brand X. The idea was to correlate something genuinely dangerous and lethal with good health.
Crypto and betting markets, to the author’s point, are repeating this pattern again today in terms of personal finances.
Yeah like why is Mike thinking he is investing if he is betting on a literal sportsbook? That is delusion and has nothing to do with crypto. I am not pro crypto but the logic here doesn't make a lot of sense.
You can say buying crypto is like gambling sure but it literally is not. It's investing in an extremely risky asset that can go to 0. But it is very different than placing a bit on Kalshi or a sportsbook.
I actually have bought CumRocket before but I also bought a lot of crypto and sold it at a profit. I did not use Kalshi later or sportbooks to gamble. I moved to invest in stocks later in life but bought boring etfs and index funds. Trading bitcoin actually taught me risk management and stocks seem much easier to handle in terms of strategy.
Sure I could've turned into a degenrate gambler but that's literally not crypto's fault
> why is Mike thinking he is investing if he is betting on a literal sportsbook?
But he's not, that's a big issue. If you download DraftKings, it's obvious you are gambling. If you download Robin Hood, and buy shares of Apple, it's obvious you are investing. If you then open Robin Hood and trade oil futures? 0 DTE options? What about when the same app shows you US commodities markets where they are binary options on if the US FIFA team make it to the round of 16?
Honestly I blame the stock market goons for normalizing calling "betting on the stock market" investing. The stock market isn't investing it's gambling. Same for the bond market and most asset markets.
Buying a bond from the issuer is investing. Buying an IPO is investing. Buying a rental property is investing. Investment implies possible productive result from the action. When you buy shares or bonds already on the market this just exits the previous holder, it does nothing productive.
Buying a rental property is just exiting the previous holder too.
I would define it differently. If you are putting money in something with the hope that the price goes up, that's speculating. If you put money in something with the hope that it generates income then that's investing.
Thought experiment: suppose company C does a small IPO. I'm rich and buy all their offering.
Scenario 1: I hold all the stock for decades until I die. Under your terminology, I am the sole "investor". Fine.
Scenario 2: 1 millisecond after my purchase I sell everything I bought in the IPO to thousands of market participants. Under your terminology they are not "investors". I can't be an investor either, since I hold no more of the stock. Does the company no longer have investors?
I've been sharing author's view for quite a while now, namely that there must exist a market of goods to give a currency real value.
But I must contradict the author, because there is a market of goods, and bitcoin is indirectly involved in it. Namely the dark web market of drugs.
People love drugs, and they use a lot of them, drugs turnover a huge amount of value. And right now people are buying bitcoin, because it's often safe to buy, and exchanging it for monero, that they then use to buy drugs.
I'm very much interested in this market, and how it affects crypto.
In the UK, you have to do KYC checks, and any crypto you buy will be visible to HMRC (taxman). If you dispose of it for monero, this is a taxable event, and they can tell your crypto has moved. You may not get pinged immediately, but HMRC can and do come after people retrospectively.
Ive been saying this for a while. Cryptocurrencies are an index tracker for the underground economy.
They're not without value and theyre not all speculation but what value they do have is almost entirely about facilitating transactions which at least one state considers illegal.
I used to think that this would mean that they'd be outright banned eventually but it seems that the "index tracker for the underground economy" proved to be too profitable an investment for western oligarchs and the chance to undermine rival countries' capital controls proved too alluring for the imperialists in government.
I call them ransom futures. But given how many of the ransom situations that are started with "give us N amount of crypto X!" I suspect being resolved entirely in conventional money, through some subcontractor chain of decreasingly white-hattish "security consultancies" that somehow make the problem go away (by knowing someone who will make the problem go away for money), your take is probably the more accurate one.
Crypto has been the bad place for almost 10 years. It lost it's shot at being mainstream when Steam stopped accepting Bitcoin payments due to price instability.
I do agree that there's a huge amount of fraud and scams, and obviously that's only got worse since the President of the US started being part of that ecosystem.
But at the same time there is also finally real finance happening on-chain too. Backpack launched a SpaceX token at IPO that can be moved between on-chain and your brokerage. I think Coinbase announced their on-chain equity offering will have the same capability. Just yesterday Bailie Gifford launched a tokenised fund where the actual register of record is on-chain. I still think crypto has significant potential as financial rails, and that does seem to be being explored by real financial players now too.
Is it possible that these companies simply fork the existing protocols and use the technology without buying into the existing "crypto world"?
Yes it won't be quite so decentralised, but say a number of major banks all spin up a node for say a JPM asset trading blockchain, it becomes semi-decentralised, so they have some advantage of a using a more secure shared ledger, but they also retain more control and thus probably more acceptance within banking, as big players can keep a walled-garden of sorts.
Isn’t this related to financial nihilism where normal people can’t invest or earn enough to grow money for basic life costs like housing and college with standard investments or jobs. They need a moonshot, hence gambling has become normalized. It isn’t even about the White House or crypto per se, it’s a desperate embrace of risk to catch up.
It's the same with everything speculative, including polymarket, spaceX , tesla etc. Where previous generations inflated physical goods values (and real estate), the new ones are inflating digital air.
Note that this post includes a major spoiler for the show The Good Place. The show is fantastic, so I'd suggest not reading unless you've already finished season 1, or have decided it's not for you.
I only started watching it after I got spoiled, and didn’t mind it. Before I knew about the premise I thought the show looked boring. Didn’t pick it up based on the excerpt on Netflix.
The show doesn’t really rely on not knowing the twist. And even saying there’s a spoiler for season 1 will probably clue most people onto what the twist is
anyway
> Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something.
> Please don't pick the most provocative thing in an article or post to complain about in the thread. Find something interesting to respond to instead.
Well, I wasn't intending to violate any guidelines, and I don't believe I've dismissed the article besides. I was just trying to save some people from potential frustration, as there was no warning provided upfront.
edit: Ah, I see. You left this comment after having your last response flagged.
This guy has been preaching against crypto for years, to the point of leaving the Haskell ecosystem just because the language was being used by Cardano. At some point you have to wonder what's going on with him...
I think the problem of crypto for mainstream usage was that it had no real purchasing power on its own. Every time you want to buy a good with crypto you have to pay the current market value of the coin in the local currency. There is usually no way to buy something for a fixed bitcoin value because at the end everyone want to exchange it for "real" money.
Without this it's always just a something to speculate on and shift "real" money with.
Wow, such a great point. I think a lot of early Doge users were all about "1 doge = 1 doge" and leaving out any thought of fiat. A lot of early btc users were like "why is this worth so much, you can't even buy anything with it."
Also, proof-of-work has inherent but not intrinsic value. Gold and silver have utility, beauty and scarcity. Imagine if a coin could guarantee tokens in terms of locking in future AI compute for yourself (future proof-of-work.) Perhaps micropayments could skip the whole "what's this going to be worth in the real world" type thinking too.
So bitcoin has value like a spare tire does. Most of the time it'll just add fuel costs and reduce car performance, but when you need it and you don't have it you'll wish you did. So the value is really somewhere in between its boom-bust price cycle that was predicted early on. I mean, it's just an insurance policy in case something goes wrong with fiat.
On that note, it should really be buy-hold-forget and use only when you absolutely must. Just like insurance. Anything else and you're setting yourself up for disappointment or a windfall that may never happen.
Also, by integrating real-world assets into the blockchain via tokenization, crypto-currency loses some of this purity. It's a different use case and viewpoint and some may even say it is antithetical to the underlying purity. Yet, by making crypto more stable in terms of usage patterns, and generally more usable as a whole, its real-world value should in theory become more apparent. More government adoption and acceptance would also help.
You may not easily be able to walk across a border with a bag of cash or gold coins, but you can with a piece of paper or memorized URL. So what's that worth to someone? Far better than nothing at all.
I started keeping my eyes open when the wrong season was given for the Bad Place spoiler (I see this was since corrected, and maybe the flow there was improved as well?). In the first sections the obvious tells were edited out (but the thinking still feels like AI), by its ends you have "The business was never aggregation, or saving, or hedging. The business is sucker farming: manufacturing a product whose counterparty is a retail customer who does not understand that he is the one being farmed. It could have played by the existing rules. It has decisively chosen not to.", and from there the frequency of LLMisms, uh, increases not linearly, but exponentially.
> A shadow dollar system, newly blessed by federal statute, is quietly migrating the savings of the global poor onto the balance sheets of a handful of opaque private companies.
I'm out of the loop on this one. Is he talking about some crypto thing?
I assume he is referring to the uptick in stablecoin adoption. USD Stable coins are US dollar-backed cryptocurrency tokens that are intended to always hold a value of $1 USD.
Stablecoins are not backed by a central bank. Instead their source of value comes from a private company that holds actual US dollars or USD-equivalent reserves (like treasury bills, etc).
Each $1 of stable coin is supposed to be backed by $1 of dollar or short term equivalent. So the issuer is making money by collecting interest on it.
3-4% of billions (USDC alone is $80 billion) would itself be billions of dollars of annual interest. Easily covering the operating cost of these companies.
However, they don’t keep it all. Nobody is going to let you hold their cash in size without getting a slice of the interest. All the big players (like an exchange holding USDC of its patrons) cut deals with the stable coin issuers for a revenue split of that interest.
Well if you pay 0 on deposits and then loan money out even just to treasuries there is money to be made. Get enough volume and it is big. Next step is riskier investments and not being fully backed... After all it is just IOU you minted yourself...
Is that a tongue in cheek reference to my inadvertently weird capitalization of wildcat as WildCat — no idea why I did that, maybe a throwback to my ThunderCats fandom of my youth.
Maybe lack of capital is a factor, but doesn’t that only come into play if redemptions are large? If it acts as a currency in circulation, there can be very little actual capital backing it (like how fractional reserves work for regular banks, IIRC).
>Is that a tongue in cheek reference to my inadvertently weird capitalization of wildcat as WildCat — no idea why I did that, maybe a throwback to my ThunderCats fandom of my youth.
No, but that's hilarious. Good catch!
I don't think "wildcat banking" would be known as that if the banks hadn't been poorly capitalized (as in, they didn't have the money). If the banks had actually worked out, we'd just be calling it "banking".
Today, stablecoins have a hilariously simple way to print money: just buy treasuries, money market funds, or whatever. We're not necessarily going to see them collapsing due to poor capitalization.
> Stablecoins are not backed by a central bank. Instead their source of value comes from a private company that holds actual US dollars or USD-equivalent reserves (like treasury bills, etc).
Yes but the problem is there are already a lot of US dollars and the pandora box was opened since the end of WW2 at least.
Is the US dollar you hold in a bank outside of the US the same as the one in the US? no...
Are they all insured and backed by the Federal Reserve? absolutely not.
In a sense if you are abroad the USDC you get from Circle on a blockchain are much closer to a "real" dollar than most of us can get their hand on.
When you go outside of the nice countries, local money becomes worthless. Nobody wants it, they'd much rather have dollars instead.
Stablecoins for the first time offer a reasonable way for the global poor to store value in dollars, or in the form of any relatively stable currency.
Obviously this comes with all kinds of issues, but it's still better than the original situation where "savings" simply didn't exist except in the form of physical dollars or gold bought at a significant premium.
While this has a very reasonable point about access to dollars, it's also funny to contrast it against the breathless propaganda from crypto advocates that the dollar itself is going to be the victim of hyperinflation Real Soon Now.
The global poor already had ways to store value in dollars. They could simply exchange whatever meager savings they had into... real dollars! And they have been doing that for decades. I don't know whether anyone in the west really believes in this bullshit of cryptocurrencies that give the global poor options.
This is simply not true. In South Africa, one of the largest African economies, you cannot hold foreign currency unless you are traveling and then you have to sell it back within 30 days of returning to the country. You can open a foreign currency account with a minimum of eg R1500 which is half the monthly minimum wage. Then there are the exchange fees to talk about. You are oversimplifying.
Crypto is not as reliably anonymous as cash. Anything with a distributed ledger is pseudonymous so if one transaction can on your wallet can be linked to you, so can all other transactions, including historical ones, to that wallet.
I suggest you go outside sometimes, you'll see that the real world looks rather different than whatever crypto-obsessed bubble you live in.
I really don't think I need to explain the obvious difference between physical US dollar notes and USDT.
I'll point out that in most of the world a $100 note is only worth $100 if it's in basically mint condition, the value falls rapidly as condition degrades.
What? I have never come across that. No problem with notes in many currencies with folds a creases, even small tears.. In my experience bank notes last for ever anyway. I have various notes from countries I have travelled to decades ago in good condition.
According to that article it has nothing to do with condition, but with the lack of anti-counterfeiting protection on older notes.
I have lived in, and briefly worked in a bank in, in a country where people do use USD, GBP etc. notes as a store of value, sometimes in large amounts (you hear about that when they get burgled!).
Cambodia official currency is USD (1000 riel = meant to be 0.25c, goes up to 50000 riel) prices are advertised in $ in general with sometimes 1$ = 4200/4300/4500...
Anyway key point is your USD better be mint and at least 2018 or they will refuse it... Same at currency exchanges in most of south east Asia that have their own currency.
In recent years, since a lot of central banks have been putting gold and other assets instead of US dollars on their balance sheet, the dollar need new outlets and this is what those stablecoins through Circle and Tether are: easy access to dollars for anybody with a computer and internet connection, skipping banks and other financial institutions.
Trump is a pro crypto president in the sense that he is making it official and a lot of actors in finance are fighting it because it is killing their own lucrative scam.
The whole Trump memecoin and World Liberty Financial is shady but really a side story.
The bottom line is if you hold USD a lot of "legacy" actors are making money on your back. With stablecoins Tether, Circle & co join the party.
This. I think crypto is going to have more commercial/industrial applications than retail/consumer applications. Stablecoins allow you to make transfers instantly beyond bank hours. There is real value there.
> "A platform that the federal regulatory apparatus has agreed to treat as adjacent to a derivatives market listed, ran, settled, and paid out a binary contract on the eschatological return of the Christian messiah."
You might be surprised what legitimate insurance companies have issued policies against in the past - it has always been the case that insurance and gambling are more closely adjacent than you might think.
“One British insurance company came to the rescue of three Scottish sisters … concerned about the cost of raising the Son of God should one of them be selected to give birth to the Messiah.”
Of course the big difference is insuring yourself against the personal risk of loss in the event of a specific outcome is not seen as quite the same as merely speculating on its occurrence. Insurance is just betting against what you want to happen happening.
> At no point in this pipeline does Mike's capital touch productive enterprise.
This is an interesting economic/philosophical angle. What is the logical conclusion of this? What happens as a higher fraction of people deploy their capital in zero-sum games? Is "deployment" even the right framing? A bet doesn't necessarily "tie up" capital in the same way as a real investment (you could place your bet moments before it's settled). Buying crypto does tie up capital, sort of, although in theory you could invest crypto-denominated assets into something productive.
My capital is in real estate and (mostly US tech) company equity. Is society actually better off because I put my capital there instead of letting it sit in a bank account or crypto wallet?
> A market, she says, is a price discovery mechanism for goods and services whose value comes from outside the market itself. The price of wheat reflects something about the world. The price of a share in a public company reflects expectations about real cash flows. The price of an interest rate future reflects collective views about real monetary conditions. In every case the market is a measuring instrument for an underlying reality, and the participants take positions on that reality.
> The price of Bitcoin measures only the price of Bitcoin.
It is really striking how technologists keep disregarding any aspect of ethics, philosophy, proper usage, etc. and just focus entirely on the technology itself. Cryptocurrency, AI, social media, on and on.
I used to think it was merely an innocent ignorance, just a soft subject that technologists weren’t familiar with. But anymore it seems like actively hostile to me, a kind of blind belief in the idea that technological problems will just be magically solved by adding more technology.
What would drive a love of technology over ones peers in the formative years? And when society further obstructs the path to working with one's interests by further exposure to the peer group and its passions, why would the society become beloved by the individual? People demonstrably cannot be put on the path of caring for others without being showed that they are seen and cared about themselves, and no intro to philosophy, or ethincs for graduates course, has ever focused on that aspect.
Not to say that all who love technology are outcasts, but hoping for reaching the ones behaving problematically by talking about the academic sport of philosophy or related disciplines doesn't seem effective if the goal is more pro-social behaviour.
Technological nihilism, in a way. The displacement of the philosophical foundations of science and western civilization in the last hundred plus years is still becoming manifest. We've been coasting on the fumes for a long time!
This article is about how crypto is so much worse than that. A stock is a hedge on the realities like expected revenue of a corporation. Crypto doesn't have enough reality underpinning it, it's almost always pure gambling, often exactly the negative sum gambling of a casino (the house always wins).
At this point, cryptocurrency is just a distributed cult. I genuinely feel bad for my handful of friends who remain under the influence of these gambling chip protocols. Somehow they still can't manage to read the room when awkwardly bringing up cryptocurrency at social gatherings and casual conversation.
Thankfully, the rampant fraud and scams have made it obvious to most people, with LLM hype now drowning out the siren song that captivates people vulnerable to FOMO of the week.
> The public's trust in markets is finite. Every dollar lost on a self-referential game labeled a market consumes a small piece of that finite trust, and the consumption over fifteen years has been considerable
Yes, and not just in crypto. People have started to view a high-trust society like a rainforest: a natural resource that has lots of life-sustaining positive externalities, but you can just burn it down to make a quick buck instead. This has been bad since the GFC, and accelerated by the modern rightwing influence sphere.
There's a very real tendency to people to go "I don't trust mainstream source <X> for <slightly valid reason in one case>", and then immediately jump to totally trusting some random youtube or tiktok conspiracy theorist.
> People have started to view a high-trust society like a rainforest: a natural resource that has lots of life-sustaining positive externalities, but you can just burn it down to make a quick buck instead.
I've never read this analogy before but it really works for me. Thanks!
I don't think so as smart contracts have huge issues unsolved.
It also doesn't solve a problem we haven already solved; If i buy something, companies are quite aware how this default contract works and what are up and downside of doing business with someone.
In smart contracts you remove the trust these people build and now come up with another mechanism. The latest i'm aware of is blocking capital from both sides until transaction is done. This binds a lot more capital on both sides which might be a huge problem for a small company vs. a big one, it could alos kill one party if the other party never accepts any resolution.
A current LLM with a credit card an already just buy something and everything in the background works as it has for a long time.
Yeah just to clarify, I meant there are probably a lot of issues in existing smart contracts that can be discovered with Mythos style LLMs. And given how many exist and are fairly blindly trusted (who ever reads the audit reports) this could be a pretty epic meltdown spiral that gets triggers.
I stopped reading at "The policy correlate of the vocabulary theft is equally clean." Please write your own blog posts; if I wanted to listen to Claude ponder about the crypto market I would have prompted it myself.
I read "that is not worth reporting on anymore because it's barely the craziest thing this week" and just immediately thought that this is all just part of the plan to flood the zone. So much corruption, crimes, lies, insanity is coming out of this admin, it's impossible to keep track of, the depravity of it all is still unrealized as we just go numb to it all.
> Each one, taken alone, would have been a bleak, dystopian fever dream ripped from the pages of a William Gibson cyberpunk novel.
Gibson isn't really that kind of dystopian. And the Good Place reference makes no sense. The article reads like those old Time Magazine pieces by some baby boomer breathlessly trying to scare other old people.
We definitely live in depressing times where all decency has long been lost.
Just yesterday the US president has Tweeted the he "loves bombing the shit out of Iran".
The language is disgusting, what's happening is disgusting, from prediction markets and their disgusting shills/cultists trying to sell you that price discovery has positive social impact, politicians and administrations blatantly involved in scams and corruption, the US threatening its allies, civil liberties and privacy more and more dying around the world, the US kidnapping foreign leaders and half the world clapping and pretending it's not happening.
Every day there's more animosity, nationalism, protectionism, people blaming globalism ignoring the huge benefits and prosperity it brought, computer algorithms (AI) quickly eroding the only positive and creative edge humans really had.
It's just sad to see the state of the affairs and the increasingly selfish direction the world is taking.
> Each one, taken alone, would have been a bleak, dystopian fever dream ripped from the pages of a William Gibson cyberpunk novel.
Or rather, a totally outrageous parody of a William Gibson cyberpunk novel. If this wasn't real, I probably couldn't stop laughing about it. But unfortunately, it is...
The weird thing about it to me is that it lumbers on. There was that time I’d dread going to parties because that crypto guy was there. That time Bloomberg got its best writer to write a whole issue of Businessweek about it a week before the SBF fraud broke. Then there was that weird time between when crypro brown jumped on the AI bandwagon before Ezra Klein did.
And now the crypto bros are still talking… to each other. Still looking at the price of Bitcoin obsessively. And the rest of us hardly ever hear about it.
> A defender will say that gold is no different, a price that refers only to itself, and that we do not call gold a fraud; but gold carries a floor of industrial demand and a monetary role thousands of years old, and Bitcoin has neither.
I'm always interested to see how anti-crypto people try to differentiate gold from crypto, and so far I've never seen anything convincing. Gold's industrial utility as a good electrical conductor could not have begun before electricity was discovered, but it was valued just as highly for millennia before that. The "monetary role thousands of years old" claim has no force at all, because it does not even attempt to explain what it is about gold that caused it to acquire this role -- and identifying some relevant property of gold that crypto lacks is a prerequisite of any argument that attempts to differentiate the two.
It’s always been bad. Crypto people have always been scum. Institutions only caved after being convinced it was the next commodity wave, and they wanted to be prepared.
Don’t even get me started on all the tax fraud they committed. They all got away with it, and continue to.
Really wish we could go back to saying "cryptocurrency", it is incredibly depressing that the world has decided that "cryptocurrency" is more relevant than "cryptography"...
100% @dang can we edit these sort of titles for clarity?
Cryptography came first and has millions of practical applications, and will only become more frequent fodder for discussion as quantum computing advances. If any discipline deserves claim to "crypto" it's -graphy.
(I'd also accept cryptozoology as the one true 'crypto')
Surprised to see him writing about this again. He spent years completely consumed by his hate for crypto, tweeting around the clock, before suddenly rage-quitting social media. I assumed he had permanently unplugged for his own peace of mind.
The irony is his background as a former "blockchain" startup founder, right during that mid-2010s era when people who missed the early Bitcoin boat desperately tried to make "enterprise blockchain" happen. It reads like a severe case of cognitive dissonance reduction. Having spent years trying to make the wrong iteration of the tech happen while missing the actual wave, he embarked on an endless crusade to manifest a collapse just to retroactively validate his own poor decisions.
I think we have a clear idea on what sort of crypto is useful (stablecoins) and which ones are not (memecoins, Bitcoin).
As we have seen with Stripe [0], Shopify [1], PayPal [2] and many others have all figured out its utility is in stablecoins like USDC, which you can send them worldwide, same day, 24/7 in seconds close to $0 with no room for speculation and pay for things and soon agents will do the same. [3]
We get that the author is still upset about Cardano ruining his own crypto startup (Adjoint Inc.) in 2017, but I think we are way past the "crypto is scam" chantings and the companies that I mentioned would agree.
Only virtual fiat is useful everything is garbage.
The stable coins in question are absolut idiotic. You can't just have billions and trillions of dollars/euros/fiat in some bank and not do anything with it while everyone else is using your stable coins.
It motivates these companes to invest the fiat they have to hold, which adds risk which wasn't there before.
Just make it a real digital fiat from central banks.
But than what did you win? Instead of having your banking ssystem in place with certifications, bank licenses etc. you have nothing to replace it with just bare digital fiat.
Smart contracts don't work.
Now what? a new whole parallel ecosystem? For what?
I've been deep into crypto for years and I was a big stablecoin supporter. I was fascinated by the tech and I still am. But everything outside the tech itself is just trash, scams, and gambling. I've come to believe that "pure" decentralization is neither practical nor particularly convenient. The only real use case that makes sense to me is giving people in developing countries access to a stable currency they can actually hold, trade, and invest in, meaning USDT or USDC. Outside of that, as an EU/US citizen I don't see why I'd hold stablecoins instead of fiat. It's actually riskier in every meaningful way, and I already have access to every form of investment I could want. It's genuinely fascinating to think about a technology that can empower people who otherwise have no access to financial tools. But that comes at the cost of millions of people around the world gambling with money they can't afford to lose, convinced they're investing their way to wealth.
Crypto was initially interesting to me because scarcity based economics is failing us and crypto give us a way to explore alternatives. But so far, nearly everything we've built with it has just been a clone of some scarcity-based thing that already exists outside of crypto.
Since then I've come to the conclusion that it's never worthwhile to buy crypto with fiat. Any scheme which asks that of its users creates too much continuity between the old way and the new way--it allows the illegitimately rich to continue to be illegitimately rich even after switching to the new system. Anything with that property doesn't deserve to be the new system.
What we need is a discontinuity. A system that wants not your money, but your participation, and which doesn't acknowledge the value of your old money. Today's crypto isn't it.
Isn't the whole point of an economy a method of resolving scarcity? Money is a proxy for participation; it keeps me from having to agree to paint the miller's fence in exchange for some flour.
That's the perspective that our current systems are based on. And back when the majority of the problems that people were up against had to do with there being not enough of something to go around--when it took half of us working in the fields just to feed the rest of us--then the system worked relatively well. 9 times out of 10, when somebody got a loan (which is the event that injects dollars into the system) it had something to do with alleviating the not-enough-stuff problems that we faced.
The quickest route to profitability had something to do with solving problems in ways that--by happenstance--let them stay solved. This is relevant since profitability is how banks decide whether to grant a loan, and loans are what cause USD to enter the system. Previously, we mostly had good reason to want people's ventures to succeed.
But nowadays, most loans are for zero-sum ventures that have more to do with capturing a share of some fixed resource (attention/influence mostly), or building something that helps some of us at the expense of others (missiles, datacenters, planned obsolescence, surveillance, etc). It's no longer clear whether we're better off with the success or failure of a randomly chosen business venture. Maybe that venture seeks to harm us.
The quickest route to profitability has changed. Now it's about making things worse for the many while benefiting the few (since it's the few who have all the money). Yet we're still treating dollars as valuable despite the fact that they're issued on the basis of profitability, a property that no longer has much to do with making our lives better.
So I think we need a system that understands consent. When I accept some abstraction from my employer in exchange for my labor I need to be able to look at it and decide whether accpepting it helps people who are helping me, or whether it helps people who want to poison my drinking water for their mining endeavor. Dollars don't carry enough information to enable me to make that decision, and so far neither does crypto.
We don't have to banish scarcity entirely before building monetary systems that are not based on it. Once we figure out the better way, it'll likely be crypto-shaped, except it won't ask you to buy it, it'll just ask you to use it. It'll be a rejection of the old ideas about value.
Thanks for sharing your perspective. It’s reminding me of how I was feeling about crypto in the early days. I begin specifying a project on those lines way back when and the ideas behind it are still interesting. Maybe you’ll enjoy: https://www.wired.com/2014/07/document-coin/
> When I accept some abstraction from my employer in exchange for my labor
That abstraction is simple debt. Your employer is, in exchange for what you've given them, promising to return to you something of value (food, shelter, entertainment, etc.) in the future. Money is the account of the promise made. The alternative is to forgo the debt and trade something of equal value at the time of the transaction. However, any negative externalities associated with you choosing what item of value you want to trade for exists whether you demand it immediately or defer acceptance until some time in the future. Trying to find a new way to practice accounting isn't going to change anything.
Simple debt isn't cutting it anymore. The "Debt to whom, and what outcomes does that person value?" question is important. Ignoring it and continuing to buy and sell simple debt traps people in situations where their economic way forward involves contributing to outcomes that makes their material situation worse. It's time bomb, each generation has diminishing incentives to participate.
> alternative is to forgo the debt and trade something of equal value
"equal value" is only a well defined concept when we have shared interests. But when half of us are trying to go to Mars and the other half is trying to prevent the first half from going to Mars so we can instead dedicate those resources to healthcare... when we're fighting over the steering wheel rather than fighting against a common enemy... then we can't usefully coordinate around a single untyped notion of "value". We're just running in circles negating each other's efforts. Our current economy is mostly waste.
New ways of accounting that don't obfuscate conflicts of interest the way that simple debt does will indeed change things.
> The "Debt to whom, and what outcomes does that person value?" question is important.
It may be, but it is one you, the employer, can easily ask during the interview. If a prospective employee doesn't align with your values, you don't have to hire them, and thus won't have to make them any promises to deliver anything that you don't feel comfortable with. This isn't only theoretical. "Cultural fit" is considered by a large swath of employers to be one of the most important aspects of hiring.
I know the typical HN account loves to over-engineer solutions to mundane things, but you really don't have to invent some new type of accounting for this. All you have to do is talk to the people in your life.
If the debts were spread around evenly, I'd agree with you. But the vast majority of debt is not peer to peer, but instead goes through a bank. If you're going to restrict a bank from using your mortgage to enable loans for endeavors that will hurt you (or selling the debt to somebody who will do this), I think you do need a new kind of accounting.
Accounting predates banks. You do not need to invent some kind of new accounting system to rid yourself of banks.
That said, banks do provide a useful service for many people. However, that service doesn't magically happen. One has to choose the bank they are comfortable employing. Which, again, requires an interview before accepting a bank to work for you. That is where you can make sure the bank you choose to utilize the services of aligns with your "cultural fit".
Talking to the people in your life is all you need here.
It's totally impractical to interview everybody who has ever offered you money for some reason, figure out how they got it, and how they got it, and determine if that set of people is working to undermine your efforts, just so you can decide whether to accept the money. The information burden is just too high, so people simply don't do it. We turn a blind eye to the cases when our work harms our neighbors, they do the same regarding us, and we all end up with less because of it. We could all have more if we automated that computational burden and instead just refused to participate in the negative externalities by refusing money that drives them.
But it requires types of debt which are not exchangable for one another. Whether it's working to take us to Mars or it's working to provide healthcare to our neighbors is something that debt should declare directly, it should not require a duplicate investigation at each transaction.
> figure out how they got it
They got it by you accepting their promise to deliver something of value in the future. If nobody out there is willing to accept their promise of delivering future value, they don't have anything. That's the whole abstraction. It is materialized out of thin air when you agree to accept the promise.
Some new kind of hypothetical accounting system cannot possibly change anything. It will always be a hindsight account of the promise that was made. The only possible change is for you to tackle the promises themselves. Which requires talking to people. That is where the promises are made.
Hey thanks for this discussion. I've gotta run, but I appreciate the willingness to engage with my weird ideas, even if you're unconvinced that it's a problem that "something of value" means something wildly different things depending on who you ask.
>But nowadays, most loans are for zero-sum ventures...
That's an enormous claim and I really doubt it.
All I can say is that I've been trying and trying to find work that actually solves a problem, and each time I become familiar with a business it seems like we're actually causing most of the problems we solve.
The exceptions to this pattern that I've come across don't have enough money to be hiring people.
Maybe I've just been unlucky.
I don't really agree with your framing.
Something like Amazon is a partnership between the capital class and, to zeroth-order, everybody else, to screw over a small slice of the proletariat (their own employees and retail / warehouse workers) and the bourgeoisie (brick-and-mortar store owners).
It sucks when the capitalist Eye of Sauron focuses on however you make your living as a thing-to-make-more-efficient but when it lands on how someone else makes their living shit gets cheaper.
Used to be, but now it's agree to paint Musk's fence in exchange for nothing, or else you aren't even allowed to exist, because the system has been thoroughly gamed. Usually when a metric becomes too gamed it's imperative that we stop using it as a metric (Goodhart's law) or else very bad things happen.
I live a perfectly fine, productive life not contributing to musk's empire. Are y'all really buying Teslas and blue twitter checks? The fact that he has a bunch of money really has no bearing on me.
The whole society is pandering to the people with the most money, you can't separate yourself from that. For instance more of your customers - no matter what you do - are Musk fans because that's what gives them money and makes them more likely to become a customer.
Somebody sells a tesla and then buys something from you with that money... and now you're contributing to musk's empire. Our money is set up so that you're not in a position to consent to it or even be aware of it.
Sounds like I sold something and therefore made money! glad to hear my business is doing well.
Sure, but at what cost? Maybe you made $10, by doing so did you enable musk to do $9 of harm to you, or was it $11?
You're not accounting for all of the government contracts that US taxpayers fund.
> Are y'all really buying Teslas and blue twitter checks? The fact that he has a bunch of money really has no bearing on me.
The lives of many people who have never given Elon Musk a dime have been materially worsened by the fact that he has a bunch of money, since that money bought political power and he used it in a way that was very destructive to a lot of people across the globe.
Happy for you that you weren't impacted, but a lot of people were and still will be.
> scarcity based economics is failing us and crypto give us a way to explore alternatives
The entire field of crypto was an attempt to create scarcity where none existed, by turning scarce electricity into special numbers.
It was about creating a rules based monetary system. It made engineering sense to start with a mimic of a system that was already known to be consistent (gold), but the feeling I got was that it was much more about letting the people choose which rules they wanted to follow, and less about favoring any particular ruleset (i.e. ones that create scarcity).
By that logic, Musk breaths air which probably eventually mixes with the air you breath, thus there is no escaping him.
Come on dude
I don't know what you're talking about. We build society either out of rules or out of threats and favors. Preferring innovation on the rules side has nothing to do with who breathes whose air, unless you want to make a rule about that and enforce it with software--which you probably shouldn't, because it's dumb.
My comment got attached to the wrong thread…nvrmnd
https://github.com/CirclesUBI/whitepaper/blob/master/README.... seemed interesting because it uses a different model that's not interchangeable with any current system. It died in 2024 however.
Yeah, that was my favorite one so far. Although I didn't much like the pact that if we're friends we assert that each other's tokens are equal in value. I know that's in the spirit of UBI but if you're building a web of trust then it seems like a missed opportunity to create incentives around being so damn useful to your community that people treat your tokens as more valuable than somebody who is less useful. To make position, and not amount, the desirable thing. To make trustworthiness profitable.
How would that work? I (an important person who is very loved and trusted by thousands of people) agree to give you (a nobody) 0.20 of my tokens for every 1 of your tokens? That smells like financialization, I'd effectively profit 80% on all of your transactions through me.
Well, if I had it fully worked out I'd be telling people to try using my system. But vaguely...
In circles the agreement is that trust creates a 1:1 value ratio. I value the tokens you mint periodically as equal to my own, and this influences the number of tokens I give you in exchange for a loaf of bread or something. If I value the bread at 6 of my own tokens, that's the price I change you: 6.
But maybe we value each other's contributions to society differently, perhaps we consult the graph and end up with a 2:3 ratio where I trust you more than you trust me. This ratio influences prices. That loaf which I value at 6 of my tokens (times two, divided by three) I offer to you at a price of 4.
Or maybe you're working to cause me trouble, damming the river I drink from or somesuch, so the trust graph gives us a 5:1 trust ratio. In this case I'm going to need 30 of your tokens in exchange for this bread because I'm aware that by feeding you, I'm giving you energy that you'll spend harming me.
After exchange, the tokens get wrapped in a layer that indicates me as well. Since the next person to accept it will be benefiting both you and me by doing so (contributing to a system that supports our various activities), they'll have to consider the trust ratio between themselves and both of us in order to determine whether to value it. This creates a risk on my part: maybe I'll accept your token and be unable to find anybody who will subsequently accept it from me because everybody I associate finds your activities problematic. (These dynamics are all implementation details, humans just scan a QR code and see a price that was determined by the weighted trust graph).
You don't encounter tokens with problematically large stacks of wrappers because demurrage counteracts inflation. We're constantly minting new tokens for ourselves, and the value of existing tokens are constantly degrading so nobody has a token that's 100 years old. That is to say, they have a half life, they decay out of existence eventually, so there's an incentive to continue to be trustworthy and useful, rather than just hoarding enough that you can then opt out of being trustworthy for the rest of your life.
> I (an important person who is very loved and trusted by thousands of people)
The ratio we end up will not be a function of how many people trust you, or how many people trust me, it'll only consider cases where I've trusted somebody who trusts you, or where you've trusted somebody that trusts me. We opt-in to the asymmetry by using variable degrees of trust to enable or prevent the activities of our peers. It restores balance to the "vote with your wallet" situation. Currently, the only way to vote with your wallet is to vote yes or to abstain. This lets you vote no.
For a first pass I'm considering using https://github.com/cblgh/appleseed-metric for the trust graph. But I don't intend to start by making apps like the one I've described here--nothing so politically charged as money. I figure I'll get the protocol working with things that are low stakes and easy to get on board with and try my hand at making something money shaped only once it's performing well for other stuff.
I think all or nothing sounds better. There was a top HN story yesterday about the curse of excessive granularity. Not only does it require excessive attention to maintain the right values - and now you're requiring coin selection as well - but can also lead to outcomes being contradictory to your intention.
Circles trust isn't about how much I actually trust you to deliver the product I bought and not harm me - it's about how much I trust you to not be a Sybil clone. But if Musk is harming me then I'll not trust his coins and people will have to find someone else to pay through.
You also have to make sure your intended outcome is a Nash equilibrium. In your system it sounds like I can set up a relay that pays out 1:1 (or 1+fee:1) without wrappers, which will quickly become a requirement, making the system harder to use, capturing a financial fee from normal system users, and unsolving the problem you wanted to solve.
It was inspired by this mural I saw when I visited Chile. There was this whole saga of exploitation by outsiders, terminating with a brown person shoving another brown person's hand into a blender and accepting a credit card from a white person (it's right outside the street art tour place in Valparaíso). It was pretty striking to be there, a white tourist with a credit card in hand, and to see how the locals felt about the way foreign money was impacting their society.
All or nothing means that we have to chose between excluding outsiders entirely, or treating them as equals. A rich outsider shouldn't be able to use a pile of money that the locals don't have a say in and act like a king, but on the other hand there should be a gradual path to gaining the trust of the locals which has to do with whether you're helping or harming them.
I'll have to think about Nash equilibria. As for making the system harder to use... I guess there will always be the problem of displaying different prices to different people based on how trusted there are, but I think it's a small price to pay compared with avoiding the exploitation that rich foreigners visit upon poor nations: exploitation mediated by the fungibility of money. As for the other complexities of use, that's just software implementation details.
My guess is a lot of people had too much expectations for blockchain and crypto.
I remember here on HN 10 years ago everybody wanted to put everything on a blockchain. Some were betting on the collapse of the financial system.
None of those things happened but ethereum created a neutral, stable, secure cheap and transparent programmable financial platform.
Because it is neutral a lot of people ported the bad things happening in the traditional financial system to crypto: the scams, debt, speculation, etc.
And then most people started to hate it.
I guess 20 years ago most porn was hosted on Apache web servers, now it would be nginx. Should we hate nginx because of porn?
So, Eyeball Coin?
Oh hell no. Biometrics on a blockchain are a terrible idea. But web of trust stuff along the same lines as https://github.com/CirclesUBI/whitepaper, figuring out where PGP went wrong and getting it right, yeah.
I'm not really excited about blockchains at all actually. They put you in the wrong sector of the design space that falls out of the CAP theorem. CRDT's and partition tolerance however, I think there's something useful in there.
I got into crypto in 2017 when I came across the phrase "money is a technology". That idea fascinated me. But fast forward several years later, and it's obvious that money might be a technology in the sense that it's a tool, but more importantly, money is a culture.
People have made crazy stories up about "the origin of money" for a long time; Adam Smith makes up a zany story about people agreeing to use chunks of metal to make change for bartering because it's too hard to keep chickens in your wallet when you need to break a sheep[1]...
The notion that people gravitate to metal vs "fractional sheep" is without historical evidence. People in fact, a long time ago, did trade things like IOUs or pieces of broken reeds or sticks[2]. Those sticks acted like IOUs and were often traded around far past the original parties to the contract.
Money is a contract between you, your peer/counterparty, and whatever organization you "trust" to mediate if someone really isn't happy with the outcome of a situation.
Money is, indeed, culture.
[1] https://www.adamsmithworks.org/documents/chapter-iv-of-the-o... [2] https://en.wikipedia.org/wiki/Tally_stick
I mean, cultures are also a kind of technology, arguably one of the first we developed as Homo Sapiens.
In my view the actual issue has always been that cryptocurrency folks don't understand what purpose money serves, mostly because they're all basically gold bugs. To strain the "money is a technology" metaphor, this is a product-market-fit issue -- like trying to build a cloud orchestration framework that only works on DIY Belwulf clusters or a web framework that only looks nice on teletype.
Crypto exists to make early crypto holders money.
You get in on the speculative promise of making yourself wealthy. It's sold to you by the people at the top, and the message is amplified by the grifters and the pick mes in their orbit.
It's never been a convenient exchange of money. If they'd focused on this, maybe the argument would have worked. Instead, it's wacky and has the worst UX of any banking apparatus in the world. Including giant US banks stuck in 2005. This sucks because this is literally the value being sold, and it doesn't deliver on it at all.
By the time quantum chips can attack crypto's underlying hardness (2029?), most of the coins won't have the engineering talent and support left to migrate to more secure cryptography. We'll start seeing shit coins popped left and right, which will cause mass panic. That will cause sell offs, even if the big name brands manage to secure themselves temporarily.
Post quantum cryptography is not fundamentally that hard, the only issues are the signatures are bigger (so the chain is less efficient), and migration of existing chains (biggest problem).
Quantum computers might harm BTC or some other chains if the devs can’t get their house in order soon enough, but there’s no reason to think it fundamentally alters whether cryptocurrency is mathematically viable
Migration for certain prominent projects is already underway, e.g Ethereum.
How are you going to mass migrate all of the cold, dark wallets?
It's not going to happen.
Probably half the value in Ethereum and Bitcoin will be popped this way.
Or if you read Sapiens you'll know money is a story we tell each other. You can't literally do much with a coin or bank note or numbers on a screen but as long as we all believe it has value, it does. It becomes part of the culture, as you say.
Crypto also has to tell a story about why it's valuable. There was a lot of anti government rhetoric and fear mongering (from libertarians) but the public never really believed the story was true. It was a lot of FOMO.
NFTs failed completely to sell their story but crypto is still hanging on among its supporters. AI is telling a similar story about the value of tokens which is being well received
Fiat currency isn't just a matter of belief or stories. If you interact with the US financial system in any significant way then you're likely to end up owing some income taxes, and those can only be paid in US dollars. If you don't pay then eventually law enforcement officers will seize your assets (real estate, cattle, gold, cryptocurrency, whatever) by force and auction them off to settle your tax debt. And if you try to stop them then they'll shoot you. Overall this is a good and stable system. The cryptocurrency clowns never seem to address the sovereign taxation issue.
While that is true, the overarching point is that it fundamentally still is, just a story. You're just describing real world consequences, precisely because humans/societies believe in that story and enforce it.
By that logic, most everything other than a club to the head is "just stories". Hume points out in a Treatise on Human Nature that most of how we interact with the world is through a coherent hallucination provided by sense organs that tell very narrow stories, but when stitched together form a cohesive whole. You're almost doing the equivalent of saying that gravity is "just a theory".
Society is a story, not a chemical reaction. People like the story of money because the stories that had gold coins or barter sucked a lot worse.
So what you're saying is that you can pay your taxes in dollars, real estate, cattle, gold, cryptocurrency or whatever.
> Fiat currency isn't just a matter of belief or stories
... Then how do we, as a society, determine how much a dollar is worth?! We do use force to enforce the stories we tell about fiat. But 'believe this story about how much a dollar will buy you and how much you owe, or else we will send thugs to your house' isn't disproving the point at all.
"but as long as we all believe it has value, it does".
Would one argue that an airplane is a _story_ ? If no one believed in the technology and lost faith in all pilots no one would fly. But that doesn't change the reality of the technology and competence of the pilots.
I get the sentiment, but I am not sure _story_ is the right word.
Well no, an airplane is a tangible thing that can fly, and as long as the safety culture of the people responsible for flying airplanes is strong enough, so crashes are very rare, people will fly with it.
Currency OTOH is basically a (forgery-proof) piece of paper with a number written on it, or even just a number in a database on some (hopefully well-protected) server. So it can only be used to buy stuff as long as we all agree that it's worth something. Of course, it helps if a government and/or a central bank is behind it, but even without a functioning government, a currency can limp on for decades, such as in Somalia, where the last banknotes were printed in 1991, but people still used them as the lowest "rung" of a three-tier system consisting of the Somali shilling, the US dollar and mobile phone payments, until recently when businesses sort of agreed to not accept them anymore (https://www.theguardian.com/world/2026/may/11/poorest-somali...).
> but crypto is still hanging on among its supporters
From what I last heard about crypto miners, the price of mining is not enough to justify price of rig + electricity, so they are quietly switching to AI.
Wonder how long the second scam will last.
AI can’t exactly be turned into money the way crypto shenanigans can.
You can sell inference, but it has to actually be real.
You can sell scams -- LLMs may be dubious at many tasks, but they're probably good enough to use to write personalized email or texts convincing random people to send you money.
> There was a lot of anti government rhetoric and fear mongering (from libertarians) but the public never really believed the story was true.
The public never believed it because it runs squarely into the basic fundamentals that underpin the global financial system.
The finance industry learned long ago that currencies have to be stable and predictable in order to be trusted, and therefore NOT financial instruments to speculate heavily on. There's been this reality distortion field that crypto can be both a currency and speculative asset, but that hasn't borne out. If your digital dollar can gain/lose 5% of its value in a day, how do you trust it to transact with?
Crypto has been speed-running into many lessons we learned decades ago from the "Free Banking" era before the Fed, back when states ran their own banks, currencies, etc. Government got involved in banking management as a way to improve the stability and security of the financial system since things like fraud were rampant.
Honestly as much as people complain the US Federal Reserve really just proved their enormous value and thoroughly vindicated fiat currency. The financial crisis of 2007-8 should have been a new Depression and it wasn't. Instead we've seen uninterrupted growth for close to 20 years. Markets have really internalized that the US economy is indestructible and the Fed will always protect us from disaster. Will it last forever? Of course not. But like Keynes said, "in the long run, we're all dead".
Euros, dollars, pounds, francs, and yen are all more stable and easier to use than cryptocurrencies.
It gets even easier once you toss in Visa, Mastercard, Discover, Amex, various debit card and regional networks, and ubiquitous banking services. Checks and online ACH payments are free or nearly free. Payment card platforms are cheap in consideration the value you get for them.
Meanwhile actually spending crypto is quite expensive - worse than Visa’s transaction fees, and far less consumer and merchant protections.
The key difference is that they all require identity to use and can be traced back to a person.
That is by design and is a good thing to everyone except cartels and communist governments.
What about people wanting to buy abortion pills?
Banks racked up huge losses on subprime mortgages, get bailed out to save customer deposits which the banks continue to profit from, most bank execs walk away scot-free, and that's a vindication of the system? They literally gambled with customer funds, lost it all by enriching incompetent sellers of bad MBS, and got it replaced by the government. With the money supply being inflated from the replacement, the only people who benefitted were the bad actors who still have a share of the now diluted supply of customer funds.
The fundamental structural problems from 2007-8 are still here. The system has been running with paper over the cracks in the foundation for almost 20 years.
Every system ever has been a patchwork. Dodd-Frank and it's orderly liquidation rules are a genuine benefit. We had a commercial bank collapse a few years ago and there was no contagion.
Most of the market is now in shadow banks. What happens when they collapse?
I've played with crypto enough to be amused, like you I like some of the tech - especially the Hedera eco-system. Dabbling in crypto helped me help the wife start a plant store we had for a couple of years. It's always been a hobby. I think things like decentralized IDs (DID) - while not directly crypto related, often land in tech discussions of such - and the like could likely be useful for some of the AI related identity work going on at the identity level.
Some nice loss harvesting in the past will help with some other financial moves down the road. I'm definitely checking in now and then, but mostly see it as background noise.
When people in a developing country cannot hold foreign currency it is a result of a deliberate decision by their government. That creates a number of issues. They may well be breaking the law holding stable coins. It means practical difficulties in buying stable coins (they need someone who will sell stablecoins in their currency).
> (they need someone who will sell stablecoins in their currency).
It's pretty hard to really lock people out of stable coins really. You really just need someone to sell you some type of cryptocurrency that can be eventually exchanged for stablecoins. You can even do "peer to peer" trades if the government really cracks down on holding crypto.
I agree with the sentiment of this article but atleast some parts of the world with poor currencies like Latam have seen some benefit from stbales.
Right! It's not that stable coins are decentralized, it's that the centralized holder is not in your jurisdiction and so your jurisdiction can't deface their money!
The only bad thing with USD based stable coin is you have to trust that the USA will keep paying its debts longer than you hold the stable coin.
The US has no reason not to pay its debts. Its debts AFAIK are USD denominated. How often has a country defaulted on debt in its own currency? I can think of one example and I thought it was a stupid thing to do at the time (it was forced by creditors, presumably as a punishment) and it was not a complete default, but a haircut.
That sounds like a good bet.
The fact that governments might not be able to stop people from using stablecoins affects the laws, though.
The governments cannot stop people holding physical notes either, and they still have the laws.
I live in less developed countries so it is actually useful for me but I see it the same way as you wrote here.
Low-life businessmen ruined the technology outside of some spaces where there is strong tech leadership. They did too much damage to reputation of the whole industry
They did the same butchering to LLM/AI tech.
Silicon Valley was a place of engineering invention, and then the money-people saw, "Oh, there's riches to be made here!"...
They explicitly built cryptocurrency as a way to hoard more wealth. It was the "engineers" not just the money people.
I worked at blockchain companies for 4 years and this is not true.
The ratio of degenerate engineers is maybe 30% but business people is 80%.
People I have worked with were much better compared to other companies I worked in like aviation or consulting
All it takes is for the engineer in charge to be degenerate and the others willing to go along with it, that's how you get a Meta, etc
Same here. I’ve met a lot of smart, passionate people in the space that are very respectable.
I absolutely believe this, it attracts developers that can see the idealistic potential. It is worthwhile to do your part for an ideal future.
The fact that you your vision is undermined by a determined group of profiteers doesn’t diminish the value of what you can accomplish toward an ideal future.
I don’t think I’ve ever worked with anyone in engineering who I would consider degenerate aside from the occasional crypto supporter. Even 30% seems like a scary high percentage of degenerate engineers.
Silicon Valley came up as a result of the military industrial complex in the Cold War.
Money was always the point.
>the only real use case that makes sense to me is giving people in developing countries...
The markets hasnt accepted that. In gaza the cost of using crypto for foreign exchange far exceeded the cost of using cash, or prederably a US bill.
People just simply trust paper bills in developing areas
Technological solutions to social problems only tend to work when the problems are of the type "I wish it were easier to rid people of their money".
There are plenty of technological solutions to social problems. This is a tired trope.
Agriculture. Plumbing. The printing press. Electricity. Vaccines. Fiat money itself, which is a technology that is better than the technology of barter, which is better than each person having to grow or make every material thing they need.
"How do we remove feces from our living spaces" and "how do we stop dying from pathogens" are not social problems.
Those are perhaps the biggest social problems that humanity has ever faced.
Toilet technology helped with the social aspects. There's a fascinating museum in India about the history of toilets.
I can’t think of many better examples of social problems than sanitation and public health.
I think it would be a reasonable definition of "social problem" that it requires two people to have it, and that they must have it in relation to each other, which is to say, some sort of social interaction or communication must be involved as well.
Sanitation is a problem for one person as well, as is health. Social problems arise specifically with the interaction of two people. You can't have a scam without two people, for instance.
Definitions that collapse the entire space under discussion into one category are useless. If sanitation is a "social problem" then everything is a social problem, and the reason why that is useless is just that a definition that does not distinguish has no utility. In mathematical terms, to say that something conforms to that definition yields zero bits of information. "Public health" is its own category. In the real world no two categories can ever be fully separated from each other but just because plausible scenarios can be spun out in which sanitation becomes involved in a social problem doesn't mean that on the whole it is much better understood and talked about as a separate category.
Crypto has social problems. If one person sits in a basement and "does crypto" by themselves who cares? They can declare they own as many basement-coin as they like. It takes a second person to have a problem.
The original post said plumbing, not sanitation in general. Plumbing mostly solves a problem that arises when you have large groups of people. An individual or a small tribe can keep the waste and drinking waters separate by walking downstream a bit.
>If sanitation is a "social problem" then everything is a social problem
Social = society, keep that in your head.
The vast majority of problems you are going to face in your life are social problems because you live in a vast interconnected society with millions/billions of other individuals.
And it is important to remember that almost all problems are social problems, we get a quite a few of the libertarian types on HN that think "I'll just ignore other people and now I've solved every problem in the world". It's why this group of people thinks this way, it makes the problem way easier if you ignore reality.
Money, and the assorted scams around it, regardless of what type of money it is, is a social problem by definition.
> And it is important to remember that almost all problems are social problems, we get a quite a few of the libertarian types on HN that think "I'll just ignore other people and now I've solved every problem in the world". It's why this group of people thinks this way, it makes the problem way easier if you ignore reality.
You see this a lot from people who have been lucky enough to live in places where problems get addressed somewhat automatically. When you spend enough time in places where that isn't true, you quickly realize how indoor plumbing - or almost anything, really - becomes a social problem.
Sanitation: If your neighbour has unmanaged sewage, it is certainly not a problem that is limited to them.
Health: If your neighbour has a contagious disease, that is going to be an issue for society as well.
Are we going to pretend that COVID as a problem doesn't fit your chosen definition perfectly: "two people to have it, and that they must have it in relation to each other, which is to say, some sort of social interaction or communication must be involved as well."
Sanitation and health are social problems because if they are not handled they have an extreme effect on society in general. Hell, for plumbing we ONLY care about it as a social problem. If you go live somewhere far enough away from people, we don't care if you shit in a bucket. If you live in a city, we absolutely care about the social effects of not having sufficient plumbing.
If my neighbour has a broken TV, that's a problem that will never affect society. If my neighbour has a contagious disease, or even a non-contagious condition, there are a LOT of ways that affects society.
Same with a neighbour with plumbing that isn't up to code. There's a reason we send government agents in to verify plumbing installations, but we don't give two shits about your TV setup.
I suspect that anyone that says that plumbing or health is not a social problem is living in a place where those things are handled well enough as a social problem that you have never seen what happens when they aren't handled.
I agree with you on the uselessness of definitions that don't distinguish anything, and I think your conceptualisation of a social problem as being something that requires multiple people to interact (like a scam) is useful, admits a very clean boundary, and deserves a name. I would call such a problem a purely social problem. But I think there is a broader concept of "social problem" that makes sense too, even though it lacks such sharp edges.
I think it's reasonable to say that a problem is a social problem to the degree that its severity as experienced by one person depends on other people's behaviour.
If I accidentally drop a rock on my own foot, this seems to be obviously not a social problem. But if I am more likely to be carrying a rock in the first place, or less likely to be wearing protective shoes, because of how society is organised, then to that extent I claim that it is a social problem. This is not an abstract example: Over time, changes in society's attitudes to dangerous kinds of work have directly, and indirectly through health and safety legislation, led to massive reductions in workplace harm since the Industrial Revolution.
Under this rubric, all it takes for a problem to be social is for it to be possible to imagine that society being organised differently would lead to a different level of suffering. Does this lead to nearly all problems being classified as social problems? Yes -- but that is not a problem in itself, that is just an accurate picture of reality! It is still useful -- indeed much more useful -- to place problems on a spectrum of social-ness; nothing "collapses" unless we are determined to make a black-and-white distinction.
In that case, what are examples of non-social problems you can think of?
A broken TV.
If my neighbour has a "removing raw sewage from living spaces" problem, it is very much a concern for me.
If my neighbour can't watch TV, I don't care.
Even a broken TV can be a social problem in some circumstances.
TV breaks because entropy doesn't like you = personal problem.
TV breaks because manufacture designed it to fail 3 months after warranty = social problem.
if you do not consider public health a social issue, what do you consider to be one?
You're putting words in my mouth. "Public health" deals with social problems regarding health, but it's a subset of "health" which also includes problems that are not social in nature.
There are absolutely social issues around vaccines — how do we fund their development? how do we distribute them? how do we convince people to use them? — but as a technology I would say they solve a problem that is mostly independent of human relationships.*
* Obviously, you could say that vaccines actually do solve a social problem because pathogens are often passed between humans, but I think then the definition of "social problems" becomes so broad as to be meaningless.
>You're putting words in my mouth.
"how do we stop dying from pathogens" is like, the textbook public health problem. it's pretty much the question which the entire concept of public health spawned from.
so, if you specifically wanted to talk about the technology of vaccines or whatever instead of general pathogen prevention, you should just say that instead. i cant read your mind.
Maybe read a couple ancestor comments up to figure out the context of what I'm responding to?
How do we maintain large urban communities is a squarely social problems, and parts of it are amenable to technical solutions such as wastewater management, supply chains, large scale agriculture, etc.
All problems are social problems in that sense, but that's not what I meant. And if fiat money (as in, a type of social contract) is a technology, then anything is a technology.
What did you mean? I can't really understand your first comment, and this one doesn't explain it any further.
I think the point that is missed is all of these solved real problems that needed solving. I feel over the last decade we have exhausted the obvious benefits of the Internet revolution and more often than not we were seeing clever technology being developed, that wouldn't solve any problems. Then long and painful search for applications of that technology would ensue. Cases in point: crypto, llms.
You’re comparing crypto and LLMs?
Yes. In fact, crypto is ahead, because it does have a legitimate use case. Two, actually - money laundering and sanctions evasion.
I'm not sure I agree on your definition of legitimate...
If we want to say that any value generating - including crime - is inbounds, then LLMs are FANTASTIC scam machines. There are incredible uses for LLMs in a lot of stealing money spaces.
I'll admit I was being a bit provocative with wording there ;)
From a stablecoin perspective holding USDC or USDT is almost like having a bank account with a bank who, for the most part, allows you to maintain your privacy as an individual. They don't need a name, address, phone number, etc. They also run on infrastructure that exists beyond any single jurisdiction and spans countries and continents. This means that bank account can be used anywhere that has internet and people willing to transact. No government can keep you within their confines by holding your funds hostage nor can political leaders (or others with positions of power) use those controls to silence public outcry or civil disobedience.
> It's actually riskier in every meaningful way
That statement is only true to you, not everyone.
Exactly. Cryptocurrency is useful as as a backup system against failing/weak institutions. Just that. Like insurance, it was not there to make anyone's lives better but simply to become a safeguard to avoid complete collapse.
Let's talk;
You're in Crimea right now. You want some gasoline. You have some magic numbers in your magic rock. It needs you to cast a spell to transmit those magic numbers to someone else. I guess it probably also needs ... some electricity and some network access and some time to make those magic numbers update in the gas station's magic number.
In what way is this actually going to help you in a total collapse? Let's stand around over my iphone and cold wallet and spacex terminal while we wait for things to beep the right number of beeps?
In the off-chance you find yourself in this situation, what's to stop the party with the gasoline from just pointing a gun at you or your corgi and asking you to add some zeros to the number of magic beans you're zapping into their magic number?
Now, perhaps you as an international agent of mystery, can use some shiny rocks or magic pieces of paper to make your escape, and you can then, once safely back in a stable society, use your magic numbers and spells to transfer "wealth" to some organization closer to your new physical location (let's say belize?) -- in which case, to avoid a bunch of tedious laws and such, perhaps that magic trick will work in the way you suggest.
But, when things go haywire and there's just Hobb's all against all, I'm not sure a magic cold wallet of certificates is going to do much.
If it was just a backup against failing/weak institutions it would be relavively benign, but the problem is that it incentivises machiavellian types to undermine society and nation states for their own personal profit - see e.g. The Sovereign Individual[0].
Combined with effective accelerationism[1] you can see why we could be heading towards somewhere a whole lot worse than The Bad Place.
[0] https://en.wikipedia.org/wiki/The_Sovereign_Individual
[1] https://en.wikipedia.org/wiki/Effective_accelerationism
Proponents of weak and failing institutions would make this exact claim about any sort of backup or alternative.
Two things can be true at the same time.
It doesn't even do that. If there's complete collapse, there won't be a reliable network to transact over, and not reliable electricity to run the network and do the processing.
What are you thinking of when you say "complete collapse"? Zimbabwe's currency collapsed yet they still had access to electricity and a networks. It sounds like you're envisioning an apocalypse.
It's not even useful for that, it's controlled by those same institutions now.
> Just that. Like insurance, it was not there to make anyone's lives better
This is revisionism. That is not at all how it started.
However, I think there's an argument that the existence of that backup, or at least its marketing, might of itself encourage people to make the institutions fail so they can profit from it.
That's a weak argument. If the institutions can collapse because a few powerful people can work against it, then the institution has already failed in the first place.
Trump and the general rise of Populism is not the cause of the fall of Western democracies, it is a consequence.
You don't seem to grasp that the answer isn't "oh well, Western democracies were just going to fail I guess"
The answer to what?
The answer to institutional collapse, the topic of the post to which I replied.
You're going to have to show your work on that one. Western democracies are suffering not because they are failing, but because they have been chipped away at for decades by fanatical right wing billionaires intent on eliminating taxes and securing their place in a perpetual oligarchy.
> Exactly. Cryptocurrency is useful as as a backup system against failing/weak institutions. Just that. Like insurance, it was not there to make anyone's lives better but simply to become a safeguard to avoid complete collapse.
Meh, it's arbitrage against slow moving financial regulations.
There are times when financial regulations are "bad" in a way that this trait is desireable - i.e. your failing institutions use case - but in many cases these regulations are, actually, there for a reason.
And now in practice crypto transactions for "normal" people are performed by bank-like institutions who log every transaction anyway, so this characteristic is really only valuable to the people deeply involved in the crypto world who are using it mainly to do "normal" crimes.
Except it requires institutions in order to work.
Yes, but the institutions don't need to be performing their function particularly well.
> neither practical nor particularly convenient
My only take away with crypto is, think of that one movie "In Time" but instead of the whole time = currency concept and the arm clock, what if crypto could be applied to a physical piece of e-paper like thing, where it says what its worth, and its worth what it says, you can transfer it on a whim from the paper to your phone (to a wallet) and back and forth.
If anyone figured that out, fully seamlessly, fault tolerant, that alone imho would be worth investing time and attention into.
Basically make the crypto real and physical, something fluidly tangible to where everyone can hold it and understand it.
No one can hack your wallet if all your "crypto" is not in it. You can spin up new wallet on a whim.
The only real way I can think is something like how monero works, where whoever owns a coin can "decrypt" said coin (or that's my limited understanding of how monero works).
There have been a number of Bitcoin physical bearer instruments. Take a look at Opendime/Satscard, for example.
I think you just described cash.
That's the idea---to my mind---that's worthwhile for crypto to work toward. Something that has all the traits of cash but that can be used over the internet.
This. Something that elevates cash, can be cash, and go back to digital.
As an outsider not paying too much attention, how do you beat the ledger problem? Crypto only works if there is a ledger. I don't want a ledger of every transaction I made. Seems like an insurmountable fundamental privacy issue.
Framing the ledger as the problem seems strange. It's more accurately the solution. The problem being how you transfer value through the internet in a trusted manner.
Re: privacy though, there's many solutions. Single tailored chains for privacy, mixers, encrypted tokens, permissioned chains, etc.
In my experience, privacy, while important, is not something users actually care about enough to demand a solution for. Most web3 users today just want to degen and gamble, and they're okay with KYC to do so.
Ethereum based research projects are addressing this. There is a currently active and usable project called Railgun which allows for hidden balances and transactions. Aztec network is launching soon which is a fully private L2 chain. It has taken a really long time but it seems the next few years will bring real privacy.
Monero solved it
There are plenty of solutions to this problem. See eg the Zerocash paper and the Zcash chain, both decade+ old now
Remittances is the other interesting one and why libra/diem was even on the table.
I was trying to send some money to my parents the other day and it’s still slow and expensive.
I highly recommend the recently published The Almighty Dollar: 500 Years of the World's Most Powerful Money by Brendan Greeley. It's an accessible look at how individuals, governments, markets, and value all intertwine to create a stable and widely used currency.
> The only real use case that makes sense to me is giving people in developing countries access to a stable currency they can actually hold, trade, and invest in, meaning USDT or USDC. Outside of that, as an EU/US citizen I don't see why I'd hold stablecoins instead of fiat
The logical conclusion of this train of thought (which I agree with) is that people who heavily invested in crypto may significantly benefit from weakening strong currencies and institutions. Make of that what you will.
I'm not into it but I'm fascinated by the cryptographic aspect and the legal aspect of it all.
> Outside of that, as an EU/US citizen I don't see why I'd hold stablecoins instead of fiat.
Especially as an EU citizen: in the EU it is illegal, by law, to have stablecoin yield. So for example the HN unicorn Coinbase can give 3.5% yield annualized (or whatever the current yield is), automatically, to anyone in the US that owns USDC. But in the EU the very same Coinbase is forbidden, by law, from giving the same yield on the exact same USDC.
Now I'm not saying the yield on EUR on a EUR bank account is exciting: what I'm saying is holding a currency losing to insane inflation and which doesn't give anything back is wild.
And it's only for stablecoins: for example as an EU citizen on my brokerage account, where I have real USDs, they automatically yield when they're idling.
So it's not that you cannot get yield on currencies in the EU: it's the way they categorized stablecoins.
Now as I understand it there are ways to get yield on stablecoins in "smart contracts" but that's another can of worms for IIUC atm there have been scams upon scams upon hacks upon thefts upon neverending shenanigans.
So yup: stablecoins as an EU citizen, not good.
> as an EU citizen on my brokerage account, where I have real USDs, they automatically yield when they're idling.
"money market fund". If they're yielding, they're holding bonds. Normally this distinction doesn't matter, but we're deep into financial plumbing here.
An emerging use-case is a bank account for AI agents. I read that Coinbase 'Base' Ethereum layer2 is popular for AI banking.
Or you could just give your agents a debit card number loaded with only as much money as you specify.
You spin up agents and want them to paid without opening a bank account... or spin-up hundreds of agents... or your country isn't very well integrated with western banking rails. I think there is more to consider.
You don’t need to open a bank account to get a prepaid debit card.
Which reloadable debit cards have no KYC requirements?
This is highly country dependent. Anonymous prepaid cards aren't as widely available as you might think, and often they have very high user-paid fees.
The amount of money you can load or receive into a debit card is limited without doing enough KYC overhead you could have gotten a bank account with the same effort.
If you try automating bots to do KYC for debit cards what you'll be doing is basically looking like a money launderer and get all your accounts shut down.
If you're fine with the usual 0.20 - 0.30 USD of processing fees, you definitely can. Cards work well for many things; micropayments are not one of them.
I believe with x402 and USDC you can pay as low as $0.000001 per HTTP request with no fees.
The existing "credit card" infrastructure is not designed to compete with that.
Now some actors like Paypal could have come up with an HTTP 402 standard and implementation 25 years ago but they never did. I am not sure why.
> I believe with x402 and USDC you can pay as low as $0.000001 per HTTP request with no fees.
On-chain transactions are still not free. x402 isn't settled in batches or rolled up anywhere AFAIK, so large volumes of tiny payments are still not cost-effective. Facilitators such as Coinbase only subsidize transactions up to a point: https://docs.cdp.coinbase.com/x402/core-concepts/facilitator
There are ways around this, but with tradeoffs.
I recently set up an agent with a Base wallet and made a few x402 API calls. Pretty convenient!
I use crypto for exchange between friends (US + EU) and myself (SE Asia).
Our options are IBAN (slow!), WesternUnion (fees, denials, hassles) or crypto (10min, cheap). We chose crypto - because it’s the practical path from their bank to mine. CashApp and Coinbase interface with my actual bank accounts, on my end.
If you don’t do international banking, then much of the utility is diminished — so I’m not surprised by your perspective. But once you try to move money between continents, even with ID and documentation, you’ll understand that Coinbase is a godsend.
This actually applies to the US as well. Anytime you need to send $1k+ to a stranger the process is a pain in the ass.
> ACH, most bank does not allow send to stranger, and it takes 1~3 days for settlement among those which allow.
> Wire, expensive ~$30 per transaction.
> Paypal/Venmo/CashApp, Schrödinger's fraud trigger you never know it's gonna work or not. Plus they report to IRS so more paperwork during tax season.
> A lot of banks report every transaction of your checking account to credit bureaus.
So stable coin is my preferred way, and luckily among my circle it is widely accepted. Any amount is instant with a few cents fee at most.
Very similar use case but even for smaller amounts. I try to be as free software as possible so USDC is my go to alternative to Venmo/Apple Pay. I would use GNU Taler if it worked with U.S. banks.
Aren’t there fees to convert fiat from/to crypto on both ends?
You can make the fees rather than pay them if you make the market. There are decentralized exchanges where this can be done ~trivially for even low amounts. The fees are for those who want instant gratification.
Yes — there’s fees converting from/to fiat and when sending the crypto.
You’ll generally have the conversion slippage and transaction fee regardless - so the difference is the second conversion.
In practice, that isn’t too expensive and worth it for the speed; though that may change if you’re sending larger or smaller amounts than I am (in $1k-10k range).
Edit:
Replying by edit due to rate limits — but subcontracting and personal loans, eg, until a client pays.
Being a consultant is hard; being a consultant with no support network is harder.
I’m curious - under what circumstances are you exchanging $1k-$10k with friends internationally?
They send me packages with contents I distribute to my friends and neighbors.
I use Wise often to move money between USD, EUR, and AUD, and it plugs right into my US credit union and brokerage accounts. International transfers settle in under a minute to Australian and European bank accounts in my experience.
Wise, like any other fintech is fun until it randomly closes your account and bans you. No one can ban you / freeze your assets with Crypto, that's a good selling point imo.
Only if you stay in cryptoland. As soon as you hit someplace with fiat rails, in a jurisdiction that requires adherence to regulatory requirements, your account is just as regulated.
Crypto has its own failure modes: https://www.web3isgoinggreat.com/
(day job is in US financial services, have consulted on implementing aml/kyc/sanctions support for where crypto rails meet traditional finance infra)
Wise, like any other fintech is fun until it randomly closes your account and bans you. No one can ban you from Crypto, that's a good selling point imo.
When you send USD to an AUD account via Wise, no money actually travels between the US and Australia. Wise maintains massive pools of local currency in bank accounts all over the world. When you deposit USD, it goes into Wise’s US bank account. Wise's software detects the deposit and instantly triggers an internal payout from Wise's Australian bank account to the recipient's AUD account. Because Wise is using local banking networks on both ends (like FedNow or RTP in the US, SEPA Instant in Europe, and NPP/Osko in Australia), the transfer can settle in seconds. It’s essentially a matching engine, not an international wire.
Credit risk and identity dictate the speed of the funding step. If you stripped KYC out of the equation entirely, the bottleneck wouldn't just be speed — the legacy banking system would refuse to route the transaction at all.
It is important to distinguish that you are fundamentally involved in a credit network, pulling funds not pushing funds, that just gives the illusion of speed. For verified users, the sub-minute speed is a mix of local real-time banking rails and Wise extending short-term trust that the incoming funds won't bounce. For an unverified or high-risk user, Wise forces a holding period until the money physically clears, dragging the process back down to standard banking speeds.
Neither does money "travel between the US and Australia" for a regular old SWIFT and correspondent banking based international bank transfer. When you send money internationally, your bank also "taps into pools of local currency" of their various correspondent bank(s). All of this could also happen instantly if they wanted it to; SWIFT is a real-time messaging network.
Wise's innovation was to provide their service "over the top", i.e. unbundle wire transfers from your bank's default offering. This has driven down both speed and pricing, in the same way that dial-through (e.g. calling card based) long distance carriers created massive competition and drove prices down in long distance calling, while under the hood it was all still just regular phone calls.
When you send USD to an AUD account by any mechanism no money actually travels between the US and Australia. Usually USD is transferred from one US bank to another, and AUD is transferred from one Australian bank to another.
Or a service like Wise which is cheap and takes a few minutes most of the time.
Never had much of a need for other services when transferring across the globe.
They're not available everywhere, and the neo-banks in general are tightening their processes to a point where they're becoming difficult to use. I've had multiple situations now where Revolut denied things like a tap payment at a restaurant in NYC because it was an "unknown recipient". Of course they don't notify you of it, leading to an awkward 5 mins with the waiter while I rummage through the app to figure out why I can't use my own money this time. Fast and convenient it ain't
I suspect parent is using "a service like Wise" even though they believe they're using Crypto. That's because for an end to end transaction to complete in under 10 minutes it has to be performed by an exchange (not actually settled on chain). There are many cases like this where the "crypto" part is just theater. Money is being moved the tradition way by altering records in a non-distributed database.
Depends on the chain. Some networks are quite fast.
But it could also be theater, yeah. A friend of mine buys USDT on a P2P exchange and immediately sells it (so, sends money to a stranger’s bank account and then gets paid by another stranger). It could just as well be some e-wallet thing like WebMoney or whatever, but the fact that you can move USDT to your own wallet instead of immediately selling it makes it a bit more reassuring I guess.
>The only real use case that makes sense to me...
Cryptocurrencies have a great and really boring application. You have to think "who needs a reliable ledger distributed among many entities?"
The answer is institutional banks the likes of JPMorgan. They have a few cryptocurrencies, you need to be another large bank to use them. Big banks send each other large sums of money constantly back and forth. In no sense do they send each other "real" money, it's just accounting... a ledger.
"Cryptocurrencies" are better thought of as mathematically proven accounting software than money. Plenty of organizations need to be able to keep track of money is between a collection of mostly-trusted peers. With cryptocurrencies they can ditch a lot of the transaction and accounting software.
But a regular database can do that with PKI. Crypto isn't just a reliable ledger -- it's a reliable ledger between an arbitrary number of mutually distrusting parties. Which doesn't really describe banks in a regulated, functioning economy.
What's your definition of a "regular" database? If you need a distributed, well-sequenced, auditable trail of cryptographically signed operations representing the transfer of value, that quite literally can be fit to match the definition of a blockchain.
People who haven't done it probably underestimate the incredible amount of fiddly nonsense is involved in actually writing accounting software to handle a ledger.
Banks and brokerages very often use software written 40 years ago because it's so much trouble to get correct.
Not that I don't agree, but PKI relies on a trusted authority which can be compromised. If you're running a trustless system, basically any party can be compromised but the blast radius is limited to just the compromised infrastructure and money, not the entire system.
No, a regular database can't do that "with PKI", you have to write ledger software on top of it and you have to have one party operating the software.
cryptocurrencies are the ledger software, API, and data store layer -- and you do need trust between peers because the JPMorgan will take actions to reverse transactions if there are problems that need fixing.
It's not magical, but it is convenient for the actual ledger actions to be mathematically proven instead of the result of accounting rules in code.
> In no sense do they send each other "real" money, it's just accounting... a ledger.
"Real money" these days is exactly that, i.e. accounting entries on a ledger, and has been for the better part of the past century or so.
> Plenty of organizations need to be able to keep track of money is between a collection of mostly-trusted peers. With cryptocurrencies they can ditch a lot of the transaction and accounting software.
What is blockchain technology if not even more complex accounting software? It has its uses, but a network of mostly trusted peers is probably not one of them.
The fascinating thing for me to watch in real time is Crypto Bros discovering in real time exactly why the financial system works the way it does. It didn't happen by accident. It's 5000+ years of incremental changes. Reversible transactions? Feature, not a bug. Expandable money supply? Feature, not a bug. Fractional reserve lending that essentially creates money? Feature, not a bug.
I remember saying this about Google Wave: it was a solution in search of a problem. Cyrpto specifically and blockchain in general is absolutely a solution desperately in search of a problem. And I honestly think not enough people were honest about their motivations. They saw Bitcoin go through the roof and were eager to be on the next rocketship, which never happened (well, there's Ethereum but it kinda happened at the same time although it started later).
It's been a sea of shitcoins and rug pulls ever since. Anyone rmemeber NFTs? Just another scam on top of a scam to sell more crypto.
Sometimes there's an advantage to an outsider's perspective on a problem space. It's the essence of disruption. But way more often than not, it's just snake oil salesman looking for a quick buck. And trying to disrupt the financial system without understanding it has shown itself to be a dismal failure, kinda like the graveyard of "Google killer" search engines in the 2000s and early 2010s.
>Outside of that, as an EU/US citizen I don't see why I'd hold stablecoins instead of fiat.
because fiat can be taken away from you.
Hate to break it to you, but anything can legally be taken away from you by the justice system. And fighting the government can put you in prison, too.
It's just LARPing.
> It's just LARPing.
Usually LARPers are conscious that they don't have magic or any sword skills. I'm pretty sure the person who you respond too really think what he wrote.
Yet the government went out its way to ban bearer shares, bearer bonds, numbered anonymous bank accounts, large denomination currency, anonymous companies, and all the other methods of anonymous banking.
Seems they were having trouble "taking it away by the justice system."
For the same reason government across the world have pressured or banned exchangers of monero.
GP added the "by the justice system" where OP only said "can be taken away". Both digital and fiat currency can be taken away from you through courts, legislation, trickery, or coercion.
Crypto is surrounded by vast amounts of misinformation, misdirection, or misunderstanding. So you get these myths and generalization propagated through lack of education. "I heard crypto is completely anonymous", "I heard crypto can't be taken away from you". Then someone gets tricked out of their crypto, or uses BTC to commit some crime and gets a quick reality check.
If you toss a bag of cash in a hole buried under a grave in Timbuktu, or toss a bitcoin seed phrase in there. Cover it up, leave Timbuktu back to your western country. Then vow to die before giving up the location (you can claim torture or whatever works, but many people in history have decided to be tortured to death without giving up the information). You can be essentially 100% assured it will never be taken. Possible with both fiat and crypto, though you'll be digging a bigger hole to bury an upward amount of dollars, yet crypto is infinitely scalable with the same size hole.
From a black and white viewpoint the possibilities are the same but the practicality is a bit different (then realize with crypto the hole might only exist in your mind). Maybe the government has control over your body but there is some victory in not letting them have your assets even if they take your life and without having to destroy the underlying value.
Personally I think a cleaner distinction is bearer assets vs titled assets. Both can be taken but bearer assets can be made impractically difficult to seize, especially against the masses at once, whereas titled assets (like bank accounts and deeds) can be taken by the government trivially (ex: in US, IRS can freeze without even a warrant) and at mass scale quickly.
If you're being detained for the rest of your life while your money languishes in a hole in Timbuktu, it has been taken from you. Money is only valuable because it has utility. If you can't use it, it's not yours.
Then you've already yielded the difference in practicality. Executing or detaining a person for life is less practical for the government to do in western countries (and even most shitholes, as ungovernable militia back regions would resist such violence) than seizing your titled or banked assets.
The mere fact you've delayed the use of money doesn't mean the value is gone. I can't do dick with my money until I've at least logged into amazon or driven to the local walmart, yet it's value remains, of course the longer I have to wait to spend it the worse it is. The time value of money means its less valuable to me if I'm locked up for decades before I can get it, but even in jail indefinitely I could secretly reveal it to a friend who could share the money to get some nice ramen packets or cigarettes.
> You can be essentially 100% assured it will never be taken.
If we take the creative approach, then according to the equivalence of inertial reference frames in the principle of relativity, taking you away from the money is exactly the same as taking the money away from you. Taking the money from you don't imply someone else must have it, just that you don't. Someone could take your HW crypto wallet even if they can't access the money, happens a lot with wallets confiscated by the government.
But ok, the original goalposts were set at the difference between stablecoins and fiat with regards to how easily they can be taken away from you. There is no difference for all practical purposes in any non-hyperbolic situation.
>If we take the creative approach, then according to the equivalence of inertial reference frames in the principle of relativity, taking you away from the money is exactly the same as taking the money away from you. Taking the money from you don't imply someone else must have it, just that you don't. Someone could take your HW crypto wallet even if they can't access the money, happens a lot with wallets confiscated by the government.
It's not the same. That's why governments and the FATF at great cost and effort spent decades snuffing out anonymous bank accounts and bearer assets, they didn't do it for the lolz. If you take the person away from the money then any surviving persons can escape and reclaim the money. The person in jail can utter the code/location to a comrade, maybe even before they go to jail. In a western country, the person might even be released from contempt after a time (decades+ contempt sentences are so rare they make headlines) and if criminally charged they will often be out on bond where they can utter the location/codes to others. It's a completely different animal than the government seizing the actual asset and putting it in its vault guarded by armies of police or military as non-human seizure.
>There is no difference for all practical purposes
Only if you ignore the practical differences.
> Only if you ignore the practical differences.
You'd think that it would be easier to just name a few but here we are discussing burying a bitcoin seed under a grave in Timbuktu.
I used that because it was charitable to the fiat argument because you could put both the fiat and crypto into the hidden hole in a way that would make seizing fiat money as difficult as seizing the crypto. If you don't like that, you can simply memorize a seed phrase in your head, it will accomplish essentially the same thing in a far more practical and more commonly practiced manner. If you insist on the realistic case it's far more charitable to crypto than fiat but I stretched it to be kind to your argument -- clearly a mistake since you only took it as an opportunity for hostility.
Why do you think stablecoins cannot be taken away? There are already many cases where eg Tether got a court summons and handed over the contents of certain wallets to the local authorities.
The original stablecoin, DAI, used since 2017 by a lot of people living in countries ravaged by horrible inflation cannot be taken away.
It can just be a smart contract with overcollaterised crypto backing it. And the idea is kind of genius.
All the USDT and USDC which appeared later on a just "proxy" for "real" dollar hold by Tether or Circle. There is nothing permissionless or decentralized about them.
So "stablecoin" can mean very different things in practice.
DAI (now called USDS) is largely backed by assets well within reach of US financial regulators these days, no? Even a few years ago, it was mostly backed by USDT and USDC, which both can be frozen by their respective issuer.
I don't think any of the non-custodial stablecoins had a very good track record even just in the medium term. Overcollateralized crypto-backed stablecoins are exposed to the market value risk of their backing assets; algorithmic stablecoins have had a tendency to death spiral.
Yes.
So DAI is a distinct system from USDS. The relationship is the creator of DAI is the same as USDS and I believe his new organisation maintains the legacy DAI contract and system.
If I remember correctly, the DAI model was beautiful:
- Instead of getting your DAI from an exchange, you could deploy your own instance of a vault, lock your ETH as collateral in it and mint DAI.
- So it was not a unique vault for every DAI but you could choose your collateral assets from an authorized list for your own vault.
I am not sure if in the case of a collapse of USDC and USDT you would have been the only one able to close your own vault and get back your good collateral assets...
Those "decentralised" stablecoins are complex and feel like they had to start from a blank page and create USDS to stay relevant in a more competitive and regulated crypto world. For example USDS has the mechanism to block it for specific holders (like USDC and USDT) but it hasn't been activated as far as I know.
This is why when there is a hack ETH, BTC and DAI are used because they are the "better" money...
In the end I agree, if you can back a decentralized stablecoin with a centralized stablecoin, how good is that system really?
The best stablecoin is the one you deploy a vault for, back it with over-collaterized (anywhere between 3 and 10x) uncensorable cypto (like ETH) and are the only one who can close the vault unless it get liquidated.
That's a beautiful model only on paper. In practice it didn't quite work out, DAI has several times broken its peg (often upwards, but that's still a problem), and they switched to backing it with more and more traditional stablecoins for stability. This was all before the rebrand to USDS.
> Instead of getting your DAI from an exchange, you could deploy your own instance of a vault, lock your ETH as collateral in it and mint DAI.
Most people that might want to use stablecoins don't have any suitable collateral lying around, so they're dependent on being able to buy or sell it at par. If that peg breaks, the utility of the stablecoin decreases.
Two things can be true at the same time:
- Bitcoin was and is a massive, historic accomplishment in creating digital scarcity for the first time and the long term effects are still playing out.
- Virtually all of the "crypto" or Bitcoin 2.0 schemes in the 15 years since have been scams. Essentially a way for a tech founder to mint tokens out of thin air, and then try to convince others to treat them as money so he can get a huge (fiat-denominated) exit. Stablecoins are basically the only crypto innovation of note that have achieved PMF.
Don't confuse the former for the latter!
Though, there’s a part of me thinking that the basic idea of creating artificial scarcity for profit is hard to separate from scamminess. It’s giving De Beers.
The entertainment industry tried for decades to achieve artificial scarcity for profit. All scammers?
> The […] tried to achieve artificial scarcity for profit. All scammers?
Yeah, I don’t really see a difference between scamming and certain types of rent seeking. So many things could fit in the blank there, not just the entertainment industry.
If:
You’re rent seeking and the only reason we’re don’t use the word “scammer” is because the concentration of wealth of the western world is built on rent seeking behavior.I do think there’s a difference between charging a price and creating artificial scarcity.
This isn’t to say that the entertainment industry hasn’t pulled some awful shenanigans. But they’re generally willing to sell to as many people as are willing to pay the price they set. For the most part they haven’t tried to place hard limits on how many total people are allowed to watch a movie and control it with some sort of limited edition resellable token. That was an innovation of the NFT folks.
All the ones trying to do that, yes.
Yes. Far worse than crypto, because they manufacture scarcity of access to human culture.
What are you talking about - the entertainment industry is the most famous scam industry ever, giving the most famous artists just enough money to keep them dependent and pocketing 90% of it themselves.
Ah yes, independent computer game producers adding copy protection were scammers.
Do those represent more than a negligible share of the entertainment industry?
> creating digital scarcity
yay?
>massive, historic accomplishment in creating digital scarcity
accomplishment? like, something big and good?
Why is artificially creating digital scarcity, something that isn't actually difficult, an achievement?
Scarcity is not a virtue.
You are forgetting Ethereum which is the defacto main standard and driver in the "crypto industry". Most of those chains are in fact EVM based (so outside of Bitcoin, XRP or Solana).
The people in and around the Ethereum Foundation are solving very interesting problems but nobody talk about it on HN. For example I believe they are at the forefront of the use zero-knowledge proofs.
Just dig into [0].
Is the Ethereum Foundation and broader project dedicated to pumping the cryptocurrency ETH? obviously not and they are not by far the top holder of it.
The fact that the crypto is not providing real returns is actually one of the main criticism of the project.
- [0] https://ethereum-magicians.org/
Ethereum promised smart contracts where "code is law", but rewrote the rules of their system when a bug was found in the first popular smart contract, the DAO. That's when I lost all interest in it.
I think it’s okay. Crypto devs can’t make a hard fork each time they want to revert something, and even if they do, people decide how much it’s worth to them (by staying on the old chain, like ETC in this case).
People’s opinion is the ultimate law. If you find a loophole in a contract that gives you everybody’s money, people will just take it back.
Cool. Do you still use computers, or?
What is the main success for an Ethereum project that solves something that can't be solved without crypto or in a hugely more efficient/better way? I'm a crypto skeptic and I've never been introduced where crypto actually solves a problem.
Read the GP comment again. I don't know if Ethereum has, is or will ever get to whatever grandiose goal they have. But the one thing that I love has done is provide intelligent people with funds to research things like ZKSNARKs and similar cryptographic constructs.
It's like war: We don't like war, we don't like people being killed, but man, the amount of technology progress made during war is good.
So, even if you hate crypto; the fact that it is enabling research in cryptographic theory (even if for stupid goals) is good.
The first thing is false or worded poorly. Before Bitcoin became globally popular, there were many examples of digital scarcity driving significant transaction volume: Early online games with tradeable game objects, gimmicks like Million Dollar Homepage, etc.
Valve hired economist and future politician Yanis Varoufakis in 2012, when Bitcoin was well below $1000, to study "in-game economies" (i.e. digital scarcity) because it was such a big deal in their existing online games.
of course you would include bitcoin in the latter, too, right? Right?
Cryptocurrency is very much a double edged sword, on one hand it enables people to transact monetary value bypassing for-profit operators such as western union and paypal as well as hinders corrupt government institutions from confiscating or otherwise devaluing what you own. Of course this also allows people with harmful intentions to do the same, bypass centralized systems that keep fraud in check, mitigate theft and whatnot.
But all I know is that the only reason why some of my friends are able to work remotely from their country is crypto currency as that is the only way they're able to get paid without 30% to 40% being lost in fees as well as being stored in a currency that might lose a majority of its value overnight. They work real, productive swe jobs and earn enough to support not only themselves, but everyone around them as well making the place they live in a tiny bit better.
> it enables people to transact monetary value bypassing for-profit operators such as western union and paypal
You are not even getting rid of that, you are just replacing them with a different set of middlemen in the crypto ecosystem who are demanding substantially higher fees than, say, a Wise does.
It's a very weird comment as people who actually use crypto (not flipping or holding) are those who without other viable choices. They're not replacing something. Those transactions would simply not happen without crypto.
Notice that the parent comment didn't use the word replacing.
This. Wise is good as long as you can open an account there. For many people this is not a viable option.
Yep, they can open a wise account to send money, but they cannot receive money using WISE, they have to open a business account to receive money and they cannot open one in their countries.
Wise demands a massive fee through bid-offer spread, they're more expensive than many regular retail banks for FX conversion. They're basically running a deceptive advertising campaign due to customers not knowing about bid offer spread.
Wise is even worse than "zero-fee" stock trading platforms like Robin hood who do payment for order flow. At least PFOF is more competitive and regulated and you're only getting a few basis points stolen from you instead of like 80 basis points.
From my own comparisons, when converting, say, $1000 USD with Wise the spread+fee is about half of any of the banks that I have accounts with. Where Wise takes a huge cut is if you convert $10 at a time.
Wise fees are sometimes big, but I find them fairly transparent about it.
CashApp doesn’t seem any different than Wise; I routinely use both — including CashApp for crypto.
Who are these middlemen? The miners?
At the other end when you need to convert your crypto to real currency.
You're entirely wrong about that. A bitcoin transaction costs me pennies a wire transfer costs me $40.
Most real financial transactions need to start and end in fiat though, and that's where the costs are
There are pretty big markets in these countries because of crypto and even then it never reaches the native currency a lot of the market uses either us dollar or euro. Businesses are glad to accept dollars and euros for most bigger purchases especially p2p marketplaces. The myth that you have to off-ramp crypto is no longer true.
That depends though. I recently bought a car in south America and they were willing to take USDT through Bianance Pay. As a US person I don't have access to that so ended up having to wire transfer. I don't know why they wouldn't accept a Bitcoin deposit which they could have easily converted to tether but I suspect it's just a momentum and learning curve thing.
And they also make their place they live and the rest of the planet a tiny bit worse due to the energy consumption of bitcoin, if they support bitcoin in any form even with lightning.
A question though: How do they exchange their crypto into local fiat?
> they also make their place they live and the rest of the planet a tiny bit worse due to the energy consumption
Energy consumption isn't the problem. It's how the energy is generated that is relevant to planetary health, and even then, whose to say the tradeoff isn't worth it. Crypto mining is estimated to take up 3% at most which means 97% is spent on other things. What makes this other 97% more worthy of this energy than crypto mining? The fact you don't see it as valuable?
Also many mining operations take advantage of stranded energy, so energy that would go to waste if not used for on-site mining.
But switching from Bitcoin to something based on proof of work is always going to use less energy. Bitcoin was innovative when it was invented, but now it’s antique, inefficient tech that’s still being used because apparently fame overwhelms all technological considerations.
They’re more likely to use a stablecoin and those don’t use Bitcoin.
I checked the internet and it seems el salvador uses bitcoin while in lebanon there is a mix of bitcoin + Lightning and Tether.
Tether is investing in US Bonds but 10% seem to be Bitcoin.
The El Salvador government bought Bitcoin and promoted it, but the reports I’ve seen suggest that ordinary people and businesses don’t use it much.
I’m ignorant of this but it seems wrong.
30% lost in fees??
Can they not manage to open a dollar-backed account somewhere?
Also:
> being stored in a currency that might lose a majority of its value overnight
I for sure put crypto in this same category. “Stablecoin” or not.
> Can they not manage to open a dollar-backed account somewhere?
Outside the West, the answer is quite often "no". And trying to open an account in the US from outside will run into ID+residency requirements.
Roughly 10% of humanity is without papers and excluded from the banking system for life, also because western coutries enforce KYC/AML rules.
> Can they not manage to open a dollar-backed account somewhere?
If you want to do financial crimes and fraud, you can't (or at least, shouldn't) really do this.
Unspoken by the parent poster is that in practice these people are usually using crypto to break the law in some way, which is why it's valuable to them.
Yeah no, I it is really really bad where I live and it is similarly bad in places outaide of western financial network as far as I can understand.
Another way to mitigate this scam is wise revolut etc. But they are also mostly western
Sounds more like social security avoidance, or general taxation avoidance.
Which country will take 30% cut from incoming foreign transaction? The highest combined fees I could find are for Sub-Saharan Africa and those are below 10%, supporting tax/social evasion claim.
Could be completely legal but when folks don't provide details its often safe to assume the worse scenario when it comes to money, taxation and screwing the government.
What they are often talking about there is countries where the official exchange rate is very different from a real world exchange rate: This happened in Argentina quite often. That led to special black market stores where people would give you local currency for dollars at better rates, and often also had some crypto support. You are then going past the legal market either way.
Possibly? Yes. But for every Argentina, there's 10 other countries where you'd loose (far more than) 40% to social security, taxes, and middleman that will handle all the paperwork for for you, particularly if we are talking about "real, productive swe jobs [that] earn enough to support not only themselves, but everyone around them as well making the place they live in a tiny bit better."
I basically have one such job, living in a stable but bottom of the table EU economy, and 40% is exactly the ballpark.
People love to rationalize tax evasion like that.
This has nothing to do with tax evasion, we're priviledged to live in countries with stable financial systems.
I believe some countries e.g. Cuba have different "official" vs "black market" exchange rates. A 30% difference wouldn't surprise me.
> Can they not manage to open a dollar-backed account somewhere?
It's harder, if not impossible, if you've been got the wrong set of papers, or are missing them.
> this same category. “Stablecoin” or not.
Like it or not, USDC and USDT do seem to actually be stable. They've been pegged to the dollar for a while now, with increased scrutiny.
Crypto has utterly failed as a currency. In that regard it's been dead for over a decade. If btc or eth were currency they'd be considered dead by deflationary spiral which is more or less what every economist predicted from the start. Some people got rich by investing but getting rich off of currency speculation is generally awful for people who rely on that currency to live. Crypto has been a success the same way The Room was a successful movie.
And at least The Room didn't enable ransomware.
it would be cash shipments if crypto didn't exist or some other form of monetary value transfer.
>bypassing for-profit operators such as western union and paypal as well as hinders corrupt government institutions from confiscating or otherwise devaluing what you own
There are transaction fees so you're still paying someone. And the it's not government taking what you own, it's scammers!
Agree re. prediction markets and predatory marketing but disagree so hard with this
> The private interest is genuine, a global market's appetite for a frictionless way to hold dollars, captured by the saver who holds the token and the issuer who books the reserves. The cost is paid by everyone outside that transaction. What looks rational for the individual Nigerian saver is corrosive for Nigeria.
The way this is framed by the author is something like "poor $COUNTRY central bank has its citizens best interests at heart but evil stablecoins are tying the poor central bank's hands". The reality could not be farther from truth. In countries mentioned in the article like Argentina, Turkey or Nigeria the governments are incredibly corrupt and they use monetary policy and capital controls to make loads of cheap financing available to the ultra rich while inflating their debts away. The net effect is that in these countries the combination of inflation and currency debasement is used as a direct wealth siphon from the middle/upper middle class to the ultra rich (the poor have no savings and therefore are less affected). As a result the middle and upper middle classes of these countries entirely evaporated in the last 10-15 years.
Stablecoins are not the issue here, the governments are.
That's not the framing:
> The private interest is genuine, [...] rational for the individual Nigerian saver
You expand upon that rationale. It is individually rational precisely because of corruption, incompetence, external sanctions and many other situations across the world.
This choice is corrosive for Nigeria regardless of whether the Nigerian government is benevolent or malevolent because American monetary policy is ignorant of what would be beneficial for Nigeria and the more people that make that choice the more the future of their society is tied to American monetary policy. It is an incompetent policy by construction. Now you have two problems: corruption, and an inability to effect monetary policy.
You might think, well if and when we solve the corruption problem we can transfer the stable coin back to effect a monetary policy... triggering the run that will drop the peg because the private entities backing the coin aren't regulated like a bank. Although comically, maybe the American taxpayer will then bail out the entity and the Nigerians will get their money!
I wholeheartedly agree with your comment. Stablecoins are not the problem, they are a symptom. I'm from Venezuela, the country that keeps leading in inflation. Our options are holding a currency that loses half its value in months, buying dollars in the "black market" which is illegal or using stablecoins.
I hate these type of articles because they often come from people that live in a normal country and don't know the struggle to live in a corrupt shithole where you don't have financial freedom nor security
I don't see why those two positions are mutually exclusive?
Having worked in crypto analytics briefly, normal people have no clue how much fraud and scams are happening in crypto at the exchange level.
FTX collapsed and was caught but more conservative crypto exchanges continue to use customer funds, trade against their own customers, use insider information, etc.
Even a supposedly "legitimate" exchange like Coinbase is allowing unregistered securities to trade on its platform.
It is the main use case!
Actually, this industry routinely runs what you'd call "hero marketing," and what makes it especially dangerous for young people is that they're being sold success stories by actors playing people who don't exist, fictional characters who supposedly got rich through crypto.
1.A tiny handful of success stories are pushed to the front.
2.The vast majority who lost money are made invisible.
3.It manufactures the expectation that this time, you could be the one.
4.The price movement itself becomes the reward stimulus.
5.The platform, the exchange, the issuer, and the early investors all hold an advantage in fees or liquidity.
The problem is that this is identical to gambling. But it's dressed up as "finance." The industry obscures the fact that crypto functions as gambling by making people think of it as a new kind of financial asset.
Of course, crypto is technology. It's true that there are technological components, blockchains, smart contracts, and the like. But just because something contains technology doesn't mean the mass marketing around it qualifies as technology investment. Anti-counterfeiting technology is also technology. That doesn't make putting money into circulating counterfeit bills an "investment in currency security technology." By the same logic, the fact that crypto contains technological elements is being used to justify the marketing structure built on top of it, and that, precisely, is the deception.
And for all the talk of decentralization, the reality that USDT and similar tokens end up tethered to a single dominant exchange, heavily coupled to nation states, essentially proves that true decentralization is impossible in practice. This is only natural. Decentralization makes trading inconvenient, so people gravitate toward a single centralized exchange. And at that point, what exactly is the difference between that exchange and a government?
Yes, and: it's not completely exclusive to crypto. The UK FCA had to ban "binary options", a financial instrument using traditional money, due to the high volume of scams. https://www.fca.org.uk/consumers/binary-options-scams
While true about that 'hero' marketing, you can claim the same about literally any marketing campaign, or things like American Dream (TM).
How many teenagers looked with starry eyes into US military recruiting PR campaigns, then get send to Iraq / Afghanistan, and instead of glory and cool adventures that were promised they saw death of peers and civilians on massive scale, they became invaders for at best questionable causes, experienced huge human suffering and destruction... which at the end didn't achieve anything positive at all, neither for US nor for locals, massively in contrary. Heroes look very differently in hindsight.
It's gambling, and it's gambling in dodgy unregulated casinos.
"This guy won big!" is absolutely a part of the marketing that pulls in the other suckers. It's not a counter-example, it's part of the scheme.
I know people who really enjoy a night out losing a 3-digit sum of money in a casino. Somehow they get sufficient reward from that to make the expense worthwhile for them.
The difference is, that unlike the Crypto enthusiasts, they don't afterwards try to convince me at length that gambling can and should replace money transfers, foreign exchange, banks in general, pension funds, the governmental exchequer etc. That would be cultish lunacy.
>Meet Mike. Mike is a college freshman who is exposed to crypto through social media. He downloads Coinbase, buys ten dollars of CumRocket because his friend group is in on it, watches the price move, and feels for the first time the dopamine rush of gambling on non-economic random walks. By his sophomore year he is onto harder drugs: 0DTE options on triple-leveraged single-stock ETFs he does not understand, traded on a gamified brokerage built to look like a video game. By twenty-two he has a Kalshi account, because betting on the outcome of a presidential primary or a reality television show winner has been reframed as participation in financial markets. By twenty-four he has hit rock bottom in the sportsbook, firing off ten-leg parlays on Tibetan ping-pong and third-division water polo at two in the morning because the games he has actually heard of no longer move fast enough to feel like anything. Mike believes he is investing. Mike is gambling. Mike is on the express train to a gambling addiction, and he is meaningfully poorer at every stop along the way.
tbh that reads a bit like the war on drugs propaganda we got in school back then. You don't want to try the devil's lettuce cause in 2 years you will be a homeless heroin addict in San Francisco, or worse!
This is a "vice" thing. Vices are things which match this pattern like alcohol or drugs:
The people in the first few groups can argue "why should this be banned, it's not harming me" with some validity. But there's also people for whom the vice overrides their self-preservation and they get into a bad financial and/or health position, and can only be saved by abstention. They may require help to abstain, such as the UK "legitimate" gambling industry's "self-ban" mechanism.One thing that does vary is whether "it's not harming me" works out. Booze in particular has massive social consequences, drunk people harm non-drinkers not just themselves. I've never worried that degenerate gamblers leaving a slot machine parlour at 2am will attack me - but outside the bars that's definitely possible which is why they're required to hire security and have police contact
People with big gambling problems do cause massive social consequences. I know of lost family homes and separation that has massive impacts on the kids. Embezzlement occurred at the accounting firm I use due to an accountant's addiction to gambling.
Some gamblers will inevitably run out of money and resort to crime.
Maybe, surely mostly white collar crime though because of the numbers involved?
Nobody trusts junkies with $100 so it makes sense that shoplifting or burglary can get them the money they need, but a lot of people who have a gambling problem are six figures down, stealing a neighbour's PS5 is a drop in the bucket.
I think this description is deceptive because it assumes bucket sizes ("many," "some," "a few"). Those bucket sizes work for alcohol and some recreational drugs. But they're tragically wrong for others--very very few people partake of heroin "occasionally with no real harm." You're almost certainly heading towards the last two buckets.
Actually there's been studies that show the majority of heroin users self limit their use to, yes, no real harm. The idea of the heroin user that's immediately thrown into an addiction where they start pawning Grandma's TV is propaganda.
True, but if you start counting codeine as an opiate the bucket gets a lot larger. And includes the Purdue Pharma scandal. Lots of people use opiates under medical supervision, with varying degrees of help and harm.
> assumes bucket sizes ("many," "some," "a few")
I was trying to be as vague as possible here!
yeah - this is a flawed example, post-Purdue opioid epidemic. Brief tidbits include: real pharm science showed that pain killing effects of opioids are not as effective as some existing, non-opioid medications; sales agents were paid in commissions and bonuses for sales objectives; laws were changed at a Federal level just before the epidemic; the top of the sales pyramid financially benefited in the billions of dollars.
Those pills are actually similar to heroin, yet all of that happened legally in real life, with profits flowing through legitimate financial institutions on a very large scale.
...which is definitely an improvement over their previous slogan, "when the fun stops, stop"¹.
__ ¹ coincidentally what my Dad always used to say about black tar heroin.
Propaganda always works best when it's true, but selective. People that ended up homeless heroin addicts 2 years after smoking cannabis exist, the propaganda just neglected to mention that they are a minority.
Just like the failure of the war on drugs, trying to ban crypto and arresting anyone that owns it would almost certainly be a dismal failure.
That's why the on and off ramps should be regulated, heavily, instead.
Presuming you want to 'kill' cryptocurrency, starving it of interactions with the real economy seems a much easier way to do it.
>tbh that reads a bit like the war on drugs propaganda we got in school back then.
Well, propaganda or not, hard drugs are bad for you.
So is bleach, that doesn’t inherently justify anything past a warning label.
People rarely die from taking bleach (except when they want to).
About 100,000 die annually from drugs in the US alone.
And people "high" on bleach never killed or injured anybody.
In the US, “unintentional poisoning deaths numbered 75,761 in 2023”
> About 100,000 die annually from drugs in the US alone.
A single substance vs all drugs including prescription, over the counter, and hard drugs while including suicide etc is hardly the support you think it is.
Further actually using the correct numbers and then trying to justify US drug policy based on hard drug overdoses fails when you look at hard drug overdoses in other countries. US numbers are high not because it’s an hard problem, but because our policy is bad.
Well it's not wrong, the solution isn't abstinence though, it's proper education, help for those who struggle with it, and making it legal and regulating it.
Just because the methods used by the war on drugs failed doesn’t mean that drugs are somehow good for you. It just means that the methods were ineffective.
Not just ineffective, but counterproductive. Kids saw through the propaganda and that made many of them discount all warnings about drugs. That’s why we shouldn’t abide well intentioned propaganda.
That's because DARE wasn't propaganda. It was a program that never meant to teach kids anything. It wasn't even meant to try
The point of DARE was to be a cover for getting cops into classrooms talking to kids after the LAPD "Public Disorder Intelligence Division" KGB-esque organization was brought to light and dissolved. Daryl Gates, the head of that program, was the one who approached some academics as a cover. It was immediately discovered that kids who went through the program were more likely to do drugs, but Gates didn't care. Because it wasn't about keeping kids away from drugs.
The entire point of the program was to turn kids into informants on their parent's gang activity. Kids were regularly coerced into narcing.
https://www.youtube.com/watch?v=LzrGCk-F7FY
https://en.wikipedia.org/wiki/LAPD_Public_Disorder_Intellige...
https://en.wikipedia.org/wiki/Drug_Abuse_Resistance_Educatio...
> and he is meaningfully poorer at every stop along the way.
or meaningfully richer as the case may be
Exactly. 90% of gamblers quit just before hitting it big.
The war on drugs, due to its targeting of specific socioeconomic and racial groups, is probably not the best analogy here.
While I do get your point about the FUD it generated, a better parallel might be the rise (and eventual fall) of the tobacco industry. There was a lot of fraud and deception in the 20th century about the health effects of smoking. There were ads touting that more doctors preferred brand X. The idea was to correlate something genuinely dangerous and lethal with good health.
Crypto and betting markets, to the author’s point, are repeating this pattern again today in terms of personal finances.
Yeah like why is Mike thinking he is investing if he is betting on a literal sportsbook? That is delusion and has nothing to do with crypto. I am not pro crypto but the logic here doesn't make a lot of sense.
You can say buying crypto is like gambling sure but it literally is not. It's investing in an extremely risky asset that can go to 0. But it is very different than placing a bit on Kalshi or a sportsbook.
I actually have bought CumRocket before but I also bought a lot of crypto and sold it at a profit. I did not use Kalshi later or sportbooks to gamble. I moved to invest in stocks later in life but bought boring etfs and index funds. Trading bitcoin actually taught me risk management and stocks seem much easier to handle in terms of strategy.
Sure I could've turned into a degenrate gambler but that's literally not crypto's fault
> why is Mike thinking he is investing if he is betting on a literal sportsbook?
But he's not, that's a big issue. If you download DraftKings, it's obvious you are gambling. If you download Robin Hood, and buy shares of Apple, it's obvious you are investing. If you then open Robin Hood and trade oil futures? 0 DTE options? What about when the same app shows you US commodities markets where they are binary options on if the US FIFA team make it to the round of 16?
Honestly I blame the stock market goons for normalizing calling "betting on the stock market" investing. The stock market isn't investing it's gambling. Same for the bond market and most asset markets.
Buying a bond from the issuer is investing. Buying an IPO is investing. Buying a rental property is investing. Investment implies possible productive result from the action. When you buy shares or bonds already on the market this just exits the previous holder, it does nothing productive.
Buying a rental property is just exiting the previous holder too.
I would define it differently. If you are putting money in something with the hope that the price goes up, that's speculating. If you put money in something with the hope that it generates income then that's investing.
So buying stocks could be either one.
> Buying a rental property is just exiting the previous holder too.
And using it to generate income, maintaining it for the customers (renters) etc
Thought experiment: suppose company C does a small IPO. I'm rich and buy all their offering.
Scenario 1: I hold all the stock for decades until I die. Under your terminology, I am the sole "investor". Fine.
Scenario 2: 1 millisecond after my purchase I sell everything I bought in the IPO to thousands of market participants. Under your terminology they are not "investors". I can't be an investor either, since I hold no more of the stock. Does the company no longer have investors?
I read it as another verse of Eminem's "Guilty Conscience".
I've been sharing author's view for quite a while now, namely that there must exist a market of goods to give a currency real value.
But I must contradict the author, because there is a market of goods, and bitcoin is indirectly involved in it. Namely the dark web market of drugs.
People love drugs, and they use a lot of them, drugs turnover a huge amount of value. And right now people are buying bitcoin, because it's often safe to buy, and exchanging it for monero, that they then use to buy drugs.
I'm very much interested in this market, and how it affects crypto.
In the UK, you have to do KYC checks, and any crypto you buy will be visible to HMRC (taxman). If you dispose of it for monero, this is a taxable event, and they can tell your crypto has moved. You may not get pinged immediately, but HMRC can and do come after people retrospectively.
Ive been saying this for a while. Cryptocurrencies are an index tracker for the underground economy.
They're not without value and theyre not all speculation but what value they do have is almost entirely about facilitating transactions which at least one state considers illegal.
I used to think that this would mean that they'd be outright banned eventually but it seems that the "index tracker for the underground economy" proved to be too profitable an investment for western oligarchs and the chance to undermine rival countries' capital controls proved too alluring for the imperialists in government.
I call them ransom futures. But given how many of the ransom situations that are started with "give us N amount of crypto X!" I suspect being resolved entirely in conventional money, through some subcontractor chain of decreasingly white-hattish "security consultancies" that somehow make the problem go away (by knowing someone who will make the problem go away for money), your take is probably the more accurate one.
Crypto has been the bad place for almost 10 years. It lost it's shot at being mainstream when Steam stopped accepting Bitcoin payments due to price instability.
I do agree that there's a huge amount of fraud and scams, and obviously that's only got worse since the President of the US started being part of that ecosystem.
But at the same time there is also finally real finance happening on-chain too. Backpack launched a SpaceX token at IPO that can be moved between on-chain and your brokerage. I think Coinbase announced their on-chain equity offering will have the same capability. Just yesterday Bailie Gifford launched a tokenised fund where the actual register of record is on-chain. I still think crypto has significant potential as financial rails, and that does seem to be being explored by real financial players now too.
Is it possible that these companies simply fork the existing protocols and use the technology without buying into the existing "crypto world"?
Yes it won't be quite so decentralised, but say a number of major banks all spin up a node for say a JPM asset trading blockchain, it becomes semi-decentralised, so they have some advantage of a using a more secure shared ledger, but they also retain more control and thus probably more acceptance within banking, as big players can keep a walled-garden of sorts.
> Backpack launched a SpaceX token at IPO that can be moved between on-chain and your brokerage
What is the actual societal value of this? Do you seriously believe that such a token helps price discovery?
I doubt there's enough evidence to make that claim yet, but I think 24/7 trading could do that.
Isn’t this related to financial nihilism where normal people can’t invest or earn enough to grow money for basic life costs like housing and college with standard investments or jobs. They need a moonshot, hence gambling has become normalized. It isn’t even about the White House or crypto per se, it’s a desperate embrace of risk to catch up.
It's the same with everything speculative, including polymarket, spaceX , tesla etc. Where previous generations inflated physical goods values (and real estate), the new ones are inflating digital air.
The phrase “financial nihilism” is explicitly mentioned and discussed in the article.
Note that this post includes a major spoiler for the show The Good Place. The show is fantastic, so I'd suggest not reading unless you've already finished season 1, or have decided it's not for you.
I only started watching it after I got spoiled, and didn’t mind it. Before I knew about the premise I thought the show looked boring. Didn’t pick it up based on the excerpt on Netflix.
The show doesn’t really rely on not knowing the twist. And even saying there’s a spoiler for season 1 will probably clue most people onto what the twist is anyway
It doesn't look like much, but is absolutely terrific. I rewatch it every few years: it's funny as hell, and grapples with real philosophy.
Now I know there's a spoiler, the title of the article is a spoiler.
It is, in fairness, a pretty common trope. See also https://www.smbc-comics.com/index.php?db=comics&id=936 , and also Iain M Banks' Surface Detail; both predate _The Good Place_.
(WARNING: The above comic contains the same spoiler as the article, more or less.)
Jacob's Ladder (1990) is one I'm thinking of too.
I am ride or die Good Place; my family has the Trolley Problem party game. Don’t spoil it if you haven’t seen it.
But honestly I feel the Darkest Timeline is more apt, ala Community.
You’re violating HN Guidelines:
> Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something.
> Please don't pick the most provocative thing in an article or post to complain about in the thread. Find something interesting to respond to instead.
Well, I wasn't intending to violate any guidelines, and I don't believe I've dismissed the article besides. I was just trying to save some people from potential frustration, as there was no warning provided upfront.
edit: Ah, I see. You left this comment after having your last response flagged.
I disagree that a spoiler warning qualifies as a “dismissal” or even a “complaint”.
This guy has been preaching against crypto for years, to the point of leaving the Haskell ecosystem just because the language was being used by Cardano. At some point you have to wonder what's going on with him...
I think the problem of crypto for mainstream usage was that it had no real purchasing power on its own. Every time you want to buy a good with crypto you have to pay the current market value of the coin in the local currency. There is usually no way to buy something for a fixed bitcoin value because at the end everyone want to exchange it for "real" money.
Without this it's always just a something to speculate on and shift "real" money with.
Wow, such a great point. I think a lot of early Doge users were all about "1 doge = 1 doge" and leaving out any thought of fiat. A lot of early btc users were like "why is this worth so much, you can't even buy anything with it."
Also, proof-of-work has inherent but not intrinsic value. Gold and silver have utility, beauty and scarcity. Imagine if a coin could guarantee tokens in terms of locking in future AI compute for yourself (future proof-of-work.) Perhaps micropayments could skip the whole "what's this going to be worth in the real world" type thinking too.
So bitcoin has value like a spare tire does. Most of the time it'll just add fuel costs and reduce car performance, but when you need it and you don't have it you'll wish you did. So the value is really somewhere in between its boom-bust price cycle that was predicted early on. I mean, it's just an insurance policy in case something goes wrong with fiat.
On that note, it should really be buy-hold-forget and use only when you absolutely must. Just like insurance. Anything else and you're setting yourself up for disappointment or a windfall that may never happen.
Also, by integrating real-world assets into the blockchain via tokenization, crypto-currency loses some of this purity. It's a different use case and viewpoint and some may even say it is antithetical to the underlying purity. Yet, by making crypto more stable in terms of usage patterns, and generally more usable as a whole, its real-world value should in theory become more apparent. More government adoption and acceptance would also help.
You may not easily be able to walk across a border with a bag of cash or gold coins, but you can with a piece of paper or memorized URL. So what's that worth to someone? Far better than nothing at all.
I wish I could just read the prompt rather then the very long article full of tiny mistakes that was generated from it.
What was the "tell" for you that makes you think this was AI-generated?
I started keeping my eyes open when the wrong season was given for the Bad Place spoiler (I see this was since corrected, and maybe the flow there was improved as well?). In the first sections the obvious tells were edited out (but the thinking still feels like AI), by its ends you have "The business was never aggregation, or saving, or hedging. The business is sucker farming: manufacturing a product whose counterparty is a retail customer who does not understand that he is the one being farmed. It could have played by the existing rules. It has decisively chosen not to.", and from there the frequency of LLMisms, uh, increases not linearly, but exponentially.
A lot of what else Stephen Diehl has published lately is more overtly slop, so it's a pretty safe bet.
> A shadow dollar system, newly blessed by federal statute, is quietly migrating the savings of the global poor onto the balance sheets of a handful of opaque private companies.
I'm out of the loop on this one. Is he talking about some crypto thing?
I assume he is referring to the uptick in stablecoin adoption. USD Stable coins are US dollar-backed cryptocurrency tokens that are intended to always hold a value of $1 USD.
Stablecoins are not backed by a central bank. Instead their source of value comes from a private company that holds actual US dollars or USD-equivalent reserves (like treasury bills, etc).
I've always wondered, how do the companies that run stablecoins make a profit? Are they buying treasury bonds?
Each $1 of stable coin is supposed to be backed by $1 of dollar or short term equivalent. So the issuer is making money by collecting interest on it.
3-4% of billions (USDC alone is $80 billion) would itself be billions of dollars of annual interest. Easily covering the operating cost of these companies.
However, they don’t keep it all. Nobody is going to let you hold their cash in size without getting a slice of the interest. All the big players (like an exchange holding USDC of its patrons) cut deals with the stable coin issuers for a revenue split of that interest.
Well if you pay 0 on deposits and then loan money out even just to treasuries there is money to be made. Get enough volume and it is big. Next step is riskier investments and not being fully backed... After all it is just IOU you minted yourself...
The profit created from issuing currency is called seigniorage. It is madness letting private companies capture this.
Yes, bonds, sometimes corporate debts, often money market participation.
Is it similar to WildCat banking?
More than similar. Another word for the same thing.
I'd argue that the poor capitalization was a core part of wildcat banking, that's not really the case here.
Is that a tongue in cheek reference to my inadvertently weird capitalization of wildcat as WildCat — no idea why I did that, maybe a throwback to my ThunderCats fandom of my youth.
Maybe lack of capital is a factor, but doesn’t that only come into play if redemptions are large? If it acts as a currency in circulation, there can be very little actual capital backing it (like how fractional reserves work for regular banks, IIRC).
>Is that a tongue in cheek reference to my inadvertently weird capitalization of wildcat as WildCat — no idea why I did that, maybe a throwback to my ThunderCats fandom of my youth.
No, but that's hilarious. Good catch!
I don't think "wildcat banking" would be known as that if the banks hadn't been poorly capitalized (as in, they didn't have the money). If the banks had actually worked out, we'd just be calling it "banking".
Today, stablecoins have a hilariously simple way to print money: just buy treasuries, money market funds, or whatever. We're not necessarily going to see them collapsing due to poor capitalization.
> Stablecoins are not backed by a central bank. Instead their source of value comes from a private company that holds actual US dollars or USD-equivalent reserves (like treasury bills, etc).
Yes but the problem is there are already a lot of US dollars and the pandora box was opened since the end of WW2 at least.
Is the US dollar you hold in a bank outside of the US the same as the one in the US? no...
Are they all insured and backed by the Federal Reserve? absolutely not.
In a sense if you are abroad the USDC you get from Circle on a blockchain are much closer to a "real" dollar than most of us can get their hand on.
When you go outside of the nice countries, local money becomes worthless. Nobody wants it, they'd much rather have dollars instead.
Stablecoins for the first time offer a reasonable way for the global poor to store value in dollars, or in the form of any relatively stable currency.
Obviously this comes with all kinds of issues, but it's still better than the original situation where "savings" simply didn't exist except in the form of physical dollars or gold bought at a significant premium.
While this has a very reasonable point about access to dollars, it's also funny to contrast it against the breathless propaganda from crypto advocates that the dollar itself is going to be the victim of hyperinflation Real Soon Now.
Crypto advocates are not one homogenous blob.
The global poor already had ways to store value in dollars. They could simply exchange whatever meager savings they had into... real dollars! And they have been doing that for decades. I don't know whether anyone in the west really believes in this bullshit of cryptocurrencies that give the global poor options.
This is simply not true. In South Africa, one of the largest African economies, you cannot hold foreign currency unless you are traveling and then you have to sell it back within 30 days of returning to the country. You can open a foreign currency account with a minimum of eg R1500 which is half the monthly minimum wage. Then there are the exchange fees to talk about. You are oversimplifying.
So having foreign currency in stable coins is allowed in South Africa?
iirc isn't the whole point of crypto that no one knows what you have or what you do with it?
They know even less with cash!
Crypto is not as reliably anonymous as cash. Anything with a distributed ledger is pseudonymous so if one transaction can on your wallet can be linked to you, so can all other transactions, including historical ones, to that wallet.
I suggest you go outside sometimes, you'll see that the real world looks rather different than whatever crypto-obsessed bubble you live in.
I really don't think I need to explain the obvious difference between physical US dollar notes and USDT.
I'll point out that in most of the world a $100 note is only worth $100 if it's in basically mint condition, the value falls rapidly as condition degrades.
What? I have never come across that. No problem with notes in many currencies with folds a creases, even small tears.. In my experience bank notes last for ever anyway. I have various notes from countries I have travelled to decades ago in good condition.
If you're going to Paris? Sure, as long as the amounts are relatively small. Try paying with pre 2009 100USD bills in Africa lol.
Even banks struggle with this https://meduza.io/en/feature/2025/05/30/old-money-new-proble...
Goes to show how viable cash is as a store of value for most of the world.
According to that article it has nothing to do with condition, but with the lack of anti-counterfeiting protection on older notes.
I have lived in, and briefly worked in a bank in, in a country where people do use USD, GBP etc. notes as a store of value, sometimes in large amounts (you hear about that when they get burgled!).
Cambodia official currency is USD (1000 riel = meant to be 0.25c, goes up to 50000 riel) prices are advertised in $ in general with sometimes 1$ = 4200/4300/4500...
Anyway key point is your USD better be mint and at least 2018 or they will refuse it... Same at currency exchanges in most of south east Asia that have their own currency.
I am pretty sure he's talking about the TrumpCoin.
In recent years, since a lot of central banks have been putting gold and other assets instead of US dollars on their balance sheet, the dollar need new outlets and this is what those stablecoins through Circle and Tether are: easy access to dollars for anybody with a computer and internet connection, skipping banks and other financial institutions.
Trump is a pro crypto president in the sense that he is making it official and a lot of actors in finance are fighting it because it is killing their own lucrative scam.
The whole Trump memecoin and World Liberty Financial is shady but really a side story.
The bottom line is if you hold USD a lot of "legacy" actors are making money on your back. With stablecoins Tether, Circle & co join the party.
I think anyone who has dealt with SWIFT transfers into higher-risk jurisdictions is thankful for stablecoins.(Also you save a ton in fees)
This. I think crypto is going to have more commercial/industrial applications than retail/consumer applications. Stablecoins allow you to make transfers instantly beyond bank hours. There is real value there.
Iran has been using bitcoin to pay its oil and got payed tolls in it.
OTOH i think it damaged the ecosystem that US president decided to be "the most pro-crypto president". Obviously nobody wants that.
> "A platform that the federal regulatory apparatus has agreed to treat as adjacent to a derivatives market listed, ran, settled, and paid out a binary contract on the eschatological return of the Christian messiah."
How is this not the coolest shit ever?
You might be surprised what legitimate insurance companies have issued policies against in the past - it has always been the case that insurance and gambling are more closely adjacent than you might think.
For example: https://www.insurancebusinessmag.com/ca/news/breaking-news/d...
“One British insurance company came to the rescue of three Scottish sisters … concerned about the cost of raising the Son of God should one of them be selected to give birth to the Messiah.”
Of course the big difference is insuring yourself against the personal risk of loss in the event of a specific outcome is not seen as quite the same as merely speculating on its occurrence. Insurance is just betting against what you want to happen happening.
Right, you can use the same instruments for both speculating and hedging. Who is to say nobody was using this as a hedging instrument?
> At no point in this pipeline does Mike's capital touch productive enterprise.
This is an interesting economic/philosophical angle. What is the logical conclusion of this? What happens as a higher fraction of people deploy their capital in zero-sum games? Is "deployment" even the right framing? A bet doesn't necessarily "tie up" capital in the same way as a real investment (you could place your bet moments before it's settled). Buying crypto does tie up capital, sort of, although in theory you could invest crypto-denominated assets into something productive.
My capital is in real estate and (mostly US tech) company equity. Is society actually better off because I put my capital there instead of letting it sit in a bank account or crypto wallet?
Buying crypto actually 'doubles' money by increasing risk:
You buy crypto and give out fiat. Now you have apparently 1 crypto worth 1 fiat and someone else now has 1 fiat.
The logical conclusion is it should be taxed as gambling, not investing. Some countries like India have already gotten this one right.
> A market, she says, is a price discovery mechanism for goods and services whose value comes from outside the market itself. The price of wheat reflects something about the world. The price of a share in a public company reflects expectations about real cash flows. The price of an interest rate future reflects collective views about real monetary conditions. In every case the market is a measuring instrument for an underlying reality, and the participants take positions on that reality.
> The price of Bitcoin measures only the price of Bitcoin.
It is really striking how technologists keep disregarding any aspect of ethics, philosophy, proper usage, etc. and just focus entirely on the technology itself. Cryptocurrency, AI, social media, on and on.
I used to think it was merely an innocent ignorance, just a soft subject that technologists weren’t familiar with. But anymore it seems like actively hostile to me, a kind of blind belief in the idea that technological problems will just be magically solved by adding more technology.
What would drive a love of technology over ones peers in the formative years? And when society further obstructs the path to working with one's interests by further exposure to the peer group and its passions, why would the society become beloved by the individual? People demonstrably cannot be put on the path of caring for others without being showed that they are seen and cared about themselves, and no intro to philosophy, or ethincs for graduates course, has ever focused on that aspect.
Not to say that all who love technology are outcasts, but hoping for reaching the ones behaving problematically by talking about the academic sport of philosophy or related disciplines doesn't seem effective if the goal is more pro-social behaviour.
Technological nihilism, in a way. The displacement of the philosophical foundations of science and western civilization in the last hundred plus years is still becoming manifest. We've been coasting on the fumes for a long time!
nerds gonna nerd i guess..
I don't know, I think philosophy can be pretty nerdy.
Has been since 2017 IMO...
If you don't know the Taler project, it's a very good idea as an alternative to crypto https://taler.net
1. A looong skim before it's revealed which type of "crypto" this is about. Because quantum computers, real crypto is also having a challenging year.
2. 2026? Cryptocurrency was always just hell. Well, before it was hell it was LARP.
Crypto is just unregulated stocks.
This article is about how crypto is so much worse than that. A stock is a hedge on the realities like expected revenue of a corporation. Crypto doesn't have enough reality underpinning it, it's almost always pure gambling, often exactly the negative sum gambling of a casino (the house always wins).
At this point, cryptocurrency is just a distributed cult. I genuinely feel bad for my handful of friends who remain under the influence of these gambling chip protocols. Somehow they still can't manage to read the room when awkwardly bringing up cryptocurrency at social gatherings and casual conversation.
Thankfully, the rampant fraud and scams have made it obvious to most people, with LLM hype now drowning out the siren song that captivates people vulnerable to FOMO of the week.
> gold carries a floor of industrial demand
I can’t help but think Bitcoin carries a floor for criminal activity. It will always be valuable.
This is such a boring take. Everyone was writing the same things in 2008.
> The public's trust in markets is finite. Every dollar lost on a self-referential game labeled a market consumes a small piece of that finite trust, and the consumption over fifteen years has been considerable
Yes, and not just in crypto. People have started to view a high-trust society like a rainforest: a natural resource that has lots of life-sustaining positive externalities, but you can just burn it down to make a quick buck instead. This has been bad since the GFC, and accelerated by the modern rightwing influence sphere.
There's a very real tendency to people to go "I don't trust mainstream source <X> for <slightly valid reason in one case>", and then immediately jump to totally trusting some random youtube or tiktok conspiracy theorist.
> People have started to view a high-trust society like a rainforest: a natural resource that has lots of life-sustaining positive externalities, but you can just burn it down to make a quick buck instead.
I've never read this analogy before but it really works for me. Thanks!
The fun ahead will probably be capable LLMs + smart contracts. There are probably a lot of issues that can be discovered.
I don't think so as smart contracts have huge issues unsolved.
It also doesn't solve a problem we haven already solved; If i buy something, companies are quite aware how this default contract works and what are up and downside of doing business with someone.
In smart contracts you remove the trust these people build and now come up with another mechanism. The latest i'm aware of is blocking capital from both sides until transaction is done. This binds a lot more capital on both sides which might be a huge problem for a small company vs. a big one, it could alos kill one party if the other party never accepts any resolution.
A current LLM with a credit card an already just buy something and everything in the background works as it has for a long time.
Fun for the first person that prompt injects their way to a billion dollars, I suppose?
Yeah just to clarify, I meant there are probably a lot of issues in existing smart contracts that can be discovered with Mythos style LLMs. And given how many exist and are fairly blindly trusted (who ever reads the audit reports) this could be a pretty epic meltdown spiral that gets triggers.
I simply cannot see how crypto can go mainstream without first solving the on-ramp experience.
I stopped reading at "The policy correlate of the vocabulary theft is equally clean." Please write your own blog posts; if I wanted to listen to Claude ponder about the crypto market I would have prompted it myself.
I read "that is not worth reporting on anymore because it's barely the craziest thing this week" and just immediately thought that this is all just part of the plan to flood the zone. So much corruption, crimes, lies, insanity is coming out of this admin, it's impossible to keep track of, the depravity of it all is still unrealized as we just go numb to it all.
Contains unwarned spoilers for The Good Place.
> politicians can't be trusted, shitcoins will cost you
More news at 11!
This author is way too wordy and spends too much time with flowery prose when he should be getting to his weird, highly idiosyncratic point
I’d rather bitcoin than rupee
For me, the price of bitcoin represents some kind of index for how gullible retail investors currently are.
> Each one, taken alone, would have been a bleak, dystopian fever dream ripped from the pages of a William Gibson cyberpunk novel.
Gibson isn't really that kind of dystopian. And the Good Place reference makes no sense. The article reads like those old Time Magazine pieces by some baby boomer breathlessly trying to scare other old people.
We definitely live in depressing times where all decency has long been lost.
Just yesterday the US president has Tweeted the he "loves bombing the shit out of Iran".
The language is disgusting, what's happening is disgusting, from prediction markets and their disgusting shills/cultists trying to sell you that price discovery has positive social impact, politicians and administrations blatantly involved in scams and corruption, the US threatening its allies, civil liberties and privacy more and more dying around the world, the US kidnapping foreign leaders and half the world clapping and pretending it's not happening.
Every day there's more animosity, nationalism, protectionism, people blaming globalism ignoring the huge benefits and prosperity it brought, computer algorithms (AI) quickly eroding the only positive and creative edge humans really had.
It's just sad to see the state of the affairs and the increasingly selfish direction the world is taking.
Once the finance guys and gambling addicts arrived it was "game over" for the geeky side of crypto.
> Each one, taken alone, would have been a bleak, dystopian fever dream ripped from the pages of a William Gibson cyberpunk novel.
Or rather, a totally outrageous parody of a William Gibson cyberpunk novel. If this wasn't real, I probably couldn't stop laughing about it. But unfortunately, it is...
The weird thing about it to me is that it lumbers on. There was that time I’d dread going to parties because that crypto guy was there. That time Bloomberg got its best writer to write a whole issue of Businessweek about it a week before the SBF fraud broke. Then there was that weird time between when crypro brown jumped on the AI bandwagon before Ezra Klein did.
And now the crypto bros are still talking… to each other. Still looking at the price of Bitcoin obsessively. And the rest of us hardly ever hear about it.
> The weird thing about it to me is that it lumbers on.
Perhaps it is actually useful to some people.
People who collect ransomware payments?
And they repeat the same wrong garbage.
At least the pressure on the financial market, GPU shortage through AI, AI we have a realistic chance that crashes more and more.
> The price of a meme coin reflects only the collective belief of meme coin holders that they will be able to sell to a greater fool
Author is at times a little too emphatic, but he has some sentences like this one that are really efficient in conveying the idea.
> A defender will say that gold is no different, a price that refers only to itself, and that we do not call gold a fraud; but gold carries a floor of industrial demand and a monetary role thousands of years old, and Bitcoin has neither.
I'm always interested to see how anti-crypto people try to differentiate gold from crypto, and so far I've never seen anything convincing. Gold's industrial utility as a good electrical conductor could not have begun before electricity was discovered, but it was valued just as highly for millennia before that. The "monetary role thousands of years old" claim has no force at all, because it does not even attempt to explain what it is about gold that caused it to acquire this role -- and identifying some relevant property of gold that crypto lacks is a prerequisite of any argument that attempts to differentiate the two.
Gold is shiny and can make nice jewelry and other things shiny.
It’s always been bad. Crypto people have always been scum. Institutions only caved after being convinced it was the next commodity wave, and they wanted to be prepared.
Don’t even get me started on all the tax fraud they committed. They all got away with it, and continue to.
edit: found the tax evaders!
Sure, but what is the scale vs what has been done with Pan/Sui etc. by Alph, Amaz, others?
It's quite damning how much crypto bs YCombinator funded. At least 70+ companies. Their reputation has nosedived
Jesus. Finally. I told you so.
The article speaks of doom and nihilism, but isn't this another example of reversion to the mean?
Really wish we could go back to saying "cryptocurrency", it is incredibly depressing that the world has decided that "cryptocurrency" is more relevant than "cryptography"...
cryptocurrency is too long for the people using it for marketing
100% @dang can we edit these sort of titles for clarity?
Cryptography came first and has millions of practical applications, and will only become more frequent fodder for discussion as quantum computing advances. If any discipline deserves claim to "crypto" it's -graphy.
(I'd also accept cryptozoology as the one true 'crypto')
Surprised to see him writing about this again. He spent years completely consumed by his hate for crypto, tweeting around the clock, before suddenly rage-quitting social media. I assumed he had permanently unplugged for his own peace of mind.
The irony is his background as a former "blockchain" startup founder, right during that mid-2010s era when people who missed the early Bitcoin boat desperately tried to make "enterprise blockchain" happen. It reads like a severe case of cognitive dissonance reduction. Having spent years trying to make the wrong iteration of the tech happen while missing the actual wave, he embarked on an endless crusade to manifest a collapse just to retroactively validate his own poor decisions.
The global stock market has been outperforming Bitcoin for a while now.
I think we have a clear idea on what sort of crypto is useful (stablecoins) and which ones are not (memecoins, Bitcoin).
As we have seen with Stripe [0], Shopify [1], PayPal [2] and many others have all figured out its utility is in stablecoins like USDC, which you can send them worldwide, same day, 24/7 in seconds close to $0 with no room for speculation and pay for things and soon agents will do the same. [3]
We get that the author is still upset about Cardano ruining his own crypto startup (Adjoint Inc.) in 2017, but I think we are way past the "crypto is scam" chantings and the companies that I mentioned would agree.
[0] https://stripe.com/en-es/payment-method/stablecoins-and-cryp...
[1] https://www.shopify.com/news/stablecoins-on-shopify
[2] https://www.paypal.com/us/digital-wallet/manage-money/crypto...
[3] https://tempo.xyz/
I bet the first failure of a large stablecoin will be fun (for external onlookers at least).
Only virtual fiat is useful everything is garbage.
The stable coins in question are absolut idiotic. You can't just have billions and trillions of dollars/euros/fiat in some bank and not do anything with it while everyone else is using your stable coins.
It motivates these companes to invest the fiat they have to hold, which adds risk which wasn't there before.
Just make it a real digital fiat from central banks.
But than what did you win? Instead of having your banking ssystem in place with certifications, bank licenses etc. you have nothing to replace it with just bare digital fiat.
Smart contracts don't work.
Now what? a new whole parallel ecosystem? For what?