… the founding ideas are promising, and something I dream of.
Before I start, just a little bit of background on me so you can understand how biased I am (😅): I’m a 16 years old programmer and I won a few crypto hackathon/funding rounds and I made a lot of friends in the field. It allowed me to get quite a bit of ETH/XMR along the way!
I see cryptocurrencies getting a lot of hate, rightly so for the number of scams, shitcoins, NFTs bullshit, “governance”, DAOs and all those often useless & snob terms.
However the founding ideas of decentralisation and freedom with your money are very appealing to me. Smart contracts are really interesting for creating your own banking operation and tokens can represent anything! It’s a world of possibilities to play with, and you get to build something useful for people!
I’d just like to add a bit of nuance tho: I see a lot of apps being built and what’s really making me laugh is the lack of open-source, decentralisation and auditing on privacy. Granted, there is a lot of fake promises, but it’s like everything, you have to find the talented people to follow.
I find it fascinating to build unstoppable, decentralised, user-first apps. I just hope that web3 stays true to its founding principles.
Hope it was interesting, tell me what you think!
EDIT: title+typos+the game is not comfortably played in Act 2
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Okay! It’s interesting, where do I start to get educated about that? I would love to see my perspective shift!
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Well I just have to be patient then!
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Not to disagree, but if you have the energy to write paragraphs, maybe provide more than just your hand wavy opinion.
Saving this for when it’s not 2AM.
It’s not a good video, I’ll save you the biased rant.
Lol thanks mate :))
… the founding ideas are promising, and something I dream of.
Hard disagree. The founding idea of cryptocurrency is to trick people out of their real currency. It’s an elaborate fake-money scheme. Good riddance.
What always got me was that in these bitcoin bros were always like: yeah, no more big banks, i want to use my bitcoins like money.
While at the same time go: haha some idiot bought a pizza with bitcoin which would now be worth 40k dollars now, what a dork.
And everyone goes, you need to hold, i’m gonna hold are you all gonna hold? We’re all holding right? Btw look at this cool billionaire selling his bitcoin at the right time, i wish i was him.
How did they never seen that they are all just people waiting to fuck over some other people. Bot a pyramid scheme thoneed to hold […] pyramid scheme
Have to correct you there:
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Monopoly™ money/crypto are a Ponzi scheme: their value depends on the next people who get sucked into the scheme, it can both decrease (inflation) or increase (deflation, increasing interest rates). It’s important to know when to exit a Ponzi scheme before it collapses.
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NFT Apes, Avatars, and other collectibles, are a pyramid scheme: the initial creator gets a cut from every successive transaction. Creators never need to exit the scheme, they’ll always get more and more, even if the item’s value tanks.
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Yeah because you know, dollar bills have inherent value, right?
The founding idea of cryptocurrency is to trick people out of their real currency
That is an absurd claim. Yes, the lack of regulations is a massive problem. Yes, it’s a risky currency to use. No, it’s not completely useless. People have been using it to get around censorship by banks. Sure, it’s fine to not like it, but having a knee-jerk emotional reaction to it is pointless and makes you look like you’re just being told what to think.
Yeah because you know, dollar bills have inherent value, right?
Dollar bills have the inherent value that some very grumpy men with guns will kick down my door and take me away if I try to make them myself.
Cryptocurrency is only worth something until a technical weakness is discovered and exploited, or until governments make it illegal, or until the creators of the currency reveal the back door they left in the system (such as that supposedly-lost Bitcoin wallet with a few billion coins in it) and cash it out, and then it’s all over and your digital tulips aren’t worth the flash cells they’re stored in.
No, it’s not completely useless.
Only to criminals.
People have been using it to get around censorship by banks.
Get around laws against money laundering, smuggling, extortion, and theft, I think you mean. Banks aren’t in the business of censorship, and even if yours is, there are plenty of others to choose from who’ll be more than happy to take your money and not ask too many questions about your politics.
Sure, it’s fine to not like it, but having a knee-jerk emotional reaction to it is pointless and makes you look like you’re just being told what to think.
Yeah, that’s what all the scammers say.
Dollar bills have the inherent value that some very grumpy men with guns will kick down my door and take me away if I try to make them myself.
That’s no what “inherent” means, and it didn’t prevent North Korea from printing their own for decades anyway.
As for the other points:
- Several technical weaknesses have been discovered over the last 15 years, some have been exploited, then fixed, and the value is still there.
- Governments have made crypto illegal (see: China), it didn’t stick.
- There are no “billions” of BTC lost, currently there are less than 20 million in total, out of which about 10% are considered lost, with no “magic backdoor wallet”.
- Tulips mania was speculation with “surprise mechanics” (lootboxes?), there have only been a few scams like that in crypto (see: crypto kitties).
Get around laws against money laundering, smuggling, extortion, and theft
Recently one of the mods on Beehaw was asking for an anonymous way to receive donations, which banks don’t allow. I don’t think they intended it for any of those.
Banks aren’t in the business of censorship
Except for porn.
plenty of others to choose from who’ll be more than happy to take your money and not ask too many questions
Take your money, yes. Give it back… not so much.
Still, there are plenty of scams in crypto… unfortunately, the same scams keep being run on all kinds of assets. Avoiding crypto won’t shield you from them, only learning about them may give you a fighting chance.
No, it’s not completely useless.
Only to criminals.
All cryptocurrencies other than Monero are completely useless to criminals. Most cryptocurrencies are designed to be traced. The only thing more traceless than Monero is paying in cash.
In other words, you’re wrong, crypto is even more useless than that
Ransom is almost always collected in Bitcoin. Buying drugs online was one of the first things you could do with Bitcoin.
to trick people out of their real currency. It’s an elaborate fake-money scheme
Too late:
- (2000 years ago)
During the Roman Empire, people used real currency: gold. Sometimes in coins, sometimes not. A given weight in gold was worth… well, its weight in gold; real currency. Some coins were made of silver, copper, or bronze; worth… their weight in silver, copper, or bronze. There used to be a fixed exchange ratio between the metals. - (1200 years ago)
The Kingdom of Venice, had a problem: its merchants kept getting robbed of their gold coins, so they increasingly started storing them in safe vaults with guards outside. Some people agreed to store other’s gold coins, and gave them redeemable slips of paper or IOUs. Merchants rejoiced, as they could now write who the coins were to be paid to, without having to carry heavy coffers full of gold by themselves. - (800 years ago)
The Kingdom of Venice had another problem: they needed more and more money to trade with, but there was only so much gold around. Since they already kept most of the gold in vaults, and people used IOUs for it, they started stamping coins with a face value higher than the metal value. They gave you metal worth only 90%, 80%, 70%, 50%, 20%, 5%… for the same amount of gold; welcome to depreciation and inflation!
» This is when we lost “real money” « - (400 years ago)
They did the same with IOUs, printing more and more of them for the same amount of gold in the vaults (fractional reserve), hoping that most people wouldn’t request their gold all at once. - (90 years ago, in 1933)
The United States of America abandons the gold standard, you can no longer redeem your “real money IOUs” for actual real gold, only for other “real money IOUs”. The IOUs for “real money IOUs” get stamped on cheap ass metal, printed on cheap paper, with some features to avoid forgery but that’s it.
» This is when what was left of “real money”, became “Monopoly™ money” « - (20th century)
Banks no longer need to keep gold, or even “gold coin IOUs”… or even “real money IOU IOUs”. They just write down in a ledger how much do they owe you, or you owe them, and that’s it. If the ledger burns up, or the dog eats it…“oops, sowwy 🥺”.
Since now banks only need to keep a number, and computers are great at keeping numbers, they start keeping the ledgers on computers. If the computer gets corrupted without a copy, or an EMP strikes it, or a hacker changes some numbers… “oops, sowwy 🥺”.
» It’s an elaborate fake-money scheme «
Take a good look at what you call “real currency” and “real money”. How much is it worth just by itself? Banknotes are plastic now, they entitle you to… more banknotes, or better yet, a bank balance (Reduce, Reuse, Recycle). Coins have nowhere the face value… and when they have, “it’s a federal crime” to melt them down to get the metal’s worth. Most people alive today, have never seen “real currency” or “non-Monopoly™ money”, not outside of a museum.
The founding idea of cryptocurrency, is to replace Monopoly™ money, with enhanced Monopoly™ money.
Now, you decide which Monopoly™ money you like more (and beware of scammers!).
Call me when I can pay my rent with your monopoly money. Until then it’s all monopoly and no money
Call me when I can pay my rent with your monopoly money
☎️ Right now: take some banknotes stamped by the US Federal Reserve, and your landlord will… be maybe reluctant (was it “guilty cash” from drug trafficking? can’t risk it)… and instead ask you to call your bank so they change the numbers they got stored on yours and your landlord’s computer ledgers.
If you both would rather trust the computer ledgers of Bitcoin, DOGE, aETH tokens on the AAVE DAO, or whatever crypto PayPal has concocted recently, that’s your choice. You could pay it in Robux, or give them your PS5, or some NFT pointing to a gif of a poorly drawn ape, for all it matters.
Still better have them sign a recept in either case, though.
Right now, the only thing you need Monopoly™ USD in the US, is paying US taxes. You can pay them in Monopoly™ EUR in most of the UE, or Monopoly™ RUB in Russia… but some landlords, and even grocery stores, may still ask you for Monopoly™ USD or Monopoly™ EUR because they don’t trust whatever Monopoly™ money their government is asking for 🤷
If you would both rather trust …
So in other words, no. Nowhere.
People in 1st world countries are tapping smartphones because they trust the NFC to talk to a wallet they trust to connect to a server they trust to change numbers on a digital ledger they trust.
Whether the screen shows you the equivalent value in USD, BTC, or barrels of oil, you already trust digital Monopoly™ money to get from one place to another.
None of the other things you mentioned have 5% price swings every single day. It’s a mere facade of a currency fit for insane people
Not sure which things you think have, and which ones don’t, “5% price swings every single day”, or price in what, but if you check the markets, you might get surprised by how stable some things are, and how unstable others.
The only mistake I could find is that US Dollars aren’t printed on paper but on cotton.
75% cotton and 25% linen… thin sheets of unwoven fibers, or “paper” 🤷
Canada Dollars are printed on plastic film, but plastic fibers can also be made into “paper”, something particularly useful for recycling. Some day, banknotes might be printed on actual trash 😆
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- (2000 years ago)
Your raw emotional response has swayed me from my nuanced understanding of this topic, I would appreciate you coloring more of the grey areas of my life either black or white.
It just isn’t though. The major currency, bitcoin, was made avalible in 2008, there weren’t any scams going on back then. It was meant to be as simple as a decentralised currency that the people had full control over. I think that’s a great thing. It wasn’t until scammers and grifters saw a new market that could be exploited because it required a good understanding of how it works to be used properly. Scammers dumbed it down and huge centralised exchanges came in opening the door to scams. However it’s definitely not a currency yet, I’ll agree, it’s more of an asset. It’s such a shame that a technology that could’ve helped put people in full control of their money has been diluted into such a shit show. Whenever I hear about a new project touting “crypto based” or Blockchain i wince like I’m sure you do, because NOW it’s become a scam, it wasn’t originally.
It took all of 6 years for banks and scams to be reinvented – mt gox was in 2014
And that’s why 10 years later, for 2024, the EU is requiring every crypto exchange to register as a bank, follow KYC and AML procedures, along with reporting everyone’s balances to the country’s Treasury.
No, absolutely not. Some crypto is absolutely like that, but the bigger ones like Ethereum and bitcoin aren’t.
As a programmer, the biggest problem I have with crypto is that it adds an (I believe) unnecessary pressure on either compute (for proof of work) or storage (for proof of stake) prices for everyone else in the world, for what is seemingly not a huge gain.
Proof of work in particular is awful, because one of the biggest problems that we actually have in the real world is global warming and adding a financial incentive to using more power is exactly the wrong direction we need to be going in. I realize that a lot of crypto is moving away from proof of work, but it’s still there.
Proof of work isn’t a necessary part of it. You need to answer the question “how does money get created”. Proof of work is a very robust way to create and allocate new money. Fiat currencies just answer " i nominate one entity who is allowed to create as much money as he likes”. Other answers are possible.
It’s also possible to use a proof of work algorithm which doesn’t consume much energy. The usual proposal is for a “proof of doing work and allocating RAM and storing something on disk”. Bitcoin just chose the most robust and simplest algorithm, which does consume a lot of energy.
In a future currency, the proof of work algorithm could allocate money to people who sequester carbon or plant trees. The thing about inventing a new type of money is that you can do anything. Bitcoin is a great leap of progress for humanity, but has a couple of flaws. Those flawed features can be reinvented, while still keeping all the benefits.
Proof of stake has basically zero impact on storage prices. The demand of every validator requiring a 1tb harddrive is substantially less than every miner requiring SEVERAL nvidia graphics cards
But it’s not “every validator has one HDD”. It’s “you can establish an out-sized representation of the swarm by spawning more processes with more storage”.
The pressure doesn’t come from one person mining at home, it comes from organized groups trying to intentionally game the system.
How are they gaming the system if they are wasting their own money+resources for no benefit?
The concept of decentralized finance infrastructure without outside regulation and governance is interesting in a vacuume.
In practical reality, it’s by definition, a return to the century+ old unregulated financial wild west. Scams and stupidity were rampant. We had to create all the regulations and restrictions we’re used to now, for people to be able to use the system instead of their mattresses to keep their money.
Is using the mattress such a bad thing? Nobody is going to care as much about your money as you will. If you fuck up and lose everything you are devistated. If the CEO of Wells Fargo looses your money they have no need to care because the government will force their slaves to make it up to you, or not. At the end of the day they can choose not to help you and you can do nothing about it.
Edits: spelling
It all depends on how much money your stick in the mattress.
A mattress can burn, and you end up with nothing. A bank that burns, either gets saved, or you get the government pinkie swear it will give you up to some amount of money back.
Keeping less than the deposit guarantee in a mattress, is silly, the government has more guns than you have to defend it, and if it tries to go back on the promise, there are many more people willing to tear it a new one.
Keeping any excess above the deposit guarantee, can make sense… but most people don’t have that much cash, or are in debt already, and it’s more important for them to not get foreclosed on the house mortgage with the mattress in it.
BTW, mortgages rarely burn even if a bank burns, funny how that works.
BTW, mortgages rarely burn even if a bank burns, funny how that works.
Aint that the damn truth. Ask the Canadian truckers how safe their money was in the bank. Whether or not you agree with what they were doing its quite clear that the minute you put money in a bank its no longer your money. Its a conditial IOU that can be revoked at any time for any reason whatsoever or no reason at all. Donated tovthe wrong social cause? No groceries this month. Didn’t stay off the beach during a pandemic? No gas for you. Maybe ask cyprus what a haircut to your bank account is like.
Ask the Canadian truckers how safe their money was in the bank.
Their money was pretty safe, along with their debts; other people’s money… well, some money can be charged and convicted, never trust money. Or the wrong government, for that matter. Like, Zimbabwe, Iraq, Libya, Niger, North Korea, China, or Russia, are a no-go, but anyone with big guns and a vested (or existential) interest in looking like they’re honoring those IOUs, like the US or EU, can work.
Even if the CEO of Wells Fargo loses your money, you will still get at least $250,000 of it back (assuming you had deposited that much) via the FDIC.
The FDIC will honor their obligations because to do otherwise would be to risk a massive bank run, of the sort that started the Great Depression. This wouldn’t just screw you over, it would screw over the ultra-wealthy too, and we can’t have that.
At the end of the day, someone can just not take your mattress money and you might be out of luck. Your mattress can burn down and all that money is gone, which is far more likely than Wells Fargo taking your money and then the FDIC not giving you anything.
Main thing: you won’t solve societal problems with technology. All of the problems we have today can be solved using what we have but we don’t want a better world.
Exactly. We have all the tools we need to solve society’s problems, we’ve had them for thousands of years. The issue is that it would make it harder for people in power to continue to accumulate power and money, so it won’t happen.
Crypto cannot solve this, it’s actually making the problem worse since it allows very wealthy people to launder dirty money for (almost) free.
Crypto also has an absolutely horrendous reputation with the general population who only hear about the scams, so using it in/with your products severely restricts who will buy your products.
CIA triad - https://en.m.wikipedia.org/wiki/Information_security
There is no non-technological way to solve the paradox of “Confidentiality, Integrity, Availability”, like for example required for publicly verifiable unique secret votes (that’s a societal problem, can even find it in the media these days).
The closest thing there is right now, comes fueled precisely by crypto tech with ZK proofs:
I think the central problem with crypto is that it is a hammer in search of a nail. The founding ideas are great in the realm of ideas, but in the real world it doesn’t really pan out. A currency is only as valuable as the goods you can buy with it. For our most common currency, the USD, the value of an individual dollar is based on its near universal acceptance and its ease of use. The price of the dollar may fluctuate because of speculation (stock traders betting on what the dollar will be worth in the future), but without speculation, the dollar would still be valuable because you can use it to buy almost anything in the world that is for sale.
What is the use case for crypto? Where does using bitcoin or ethereum make more sense than just using USD or Euros? Crypto is secured via the blockchain, but it is not more secure than standard currencies. Quite the contrary - if i make a credit card transaction and the vendor doesn’t send me my goods, I can call my credit card company and dispute the transaction. If I do the same with crypto, I am left high and dry. There are methods like escrow to get around this, but those require the intervention of a third party. At that point, why not just use your credit card?
The only real world advantage that crypto seems to have over other currencies is that it is both difficult to trace and it is digital. To my knowledge, the only time one might need both these qualities is if you are making an illegal online transaction. If the transaction is not illegal, then using a credit card is always better. If the transaction does not need to be online, then using cash is always easier.
Illegal online transactions are a relatively rare use case, and so most people that are buying or selling crypto are doing it to speculate. They don’t believe in crypto as an idea - they dream of buying low and selling high, or mining the coin and selling it for more than the cost of the power to mine it. Because most people are only buying into crypto to sell it later (rather than exchange it for goods), coins have nothing to stabilize their value. It’s pump-and-dump schemes all the way down.
The only real world advantage that crypto seems to have over other currencies is that it is both difficult to trace and it is digital.
most crypto currencies (excluding Monero) are easier to trace than fiat money since every transaction is public to anyone as long as you know the public key (address)
relying on “Mixer” services require are third party in hope they don’t actually sell you out and most crypto exchanges have kyc implemented by lawgreat point, which actually helps further my point. Regulations passed over the past 10 years to clamp down on crypto have minimized its effectiveness as a less-traceable currency, which further reduces the cases where cryptocurrencies are better or easier to use than fiat currencies.
I am a user of Monero. I purchase it with dollars and pay most of my bills with it. I hold some matic in aave to allow me to take out loans when i need them so i dont have a credit card. I saw a 9% interest rate to borrow recently and thought “damn that is expensive” and then i remembered most credit cards are 20%+ and realized my frame of reference had shifted without me even realizing it. I am about to borrow $500 usd to buy some insulation in a few months and it annoys me because that is 40% of my total credit limit when i would like it to be 30% or less. Nevermind that since its a crypto loan i dont have to apply for it, have a bank account to get it, worship at the alter of king FICO, etc.
I was an early adopter of bc and more than ten years later I am still waiting for it to be useful.
Back then the dream was that you would be paid in it and could pay your rent and food with it. But honestly it was just a fun experiment and not very serious.
Also I think a weakness is that you can’t print more when it is needed to prop up the economy, so USD etc will still be required to run things smoothly. Printing is just a way of distributing a little bit of value from everyone to a specific goal and sometimes this is essential.
I’m not saying that there isn’t a better system, but just that the current one needs this flexibility.
You can use both systems, and appreciate their advantages and disadvantages. Cryptocurrency is good for discreet transactions where you don’t mind sacrificing some of the protections of the traditional financial system. So far it seems that it’s mainly used to buy drugs and other illegal stuff, but I’ve also seen web hosting purchasable with crypto, and I’m sure there are plenty of other applications that I can’t think of now. Back in the first bitcoin boom, there were restaurants selling food for btc, but the confirmation delay was a concern. That wouldn’t be the case now with the lightning network, but the novelty is gone.
The web3 stuff built on top of blockchain seems to be 99% scams and grifts. I don’t subscribe to the value of adding artificial scarcity/provenance to digital goods.
Yeah I never got the proof of authority thing, pretty ironic
Congrats on winning some funding rounds, spend them wisely.
Crypto is great, but almost for all the opposite reasons:
- Smart contracts and DAOs, are the basis for a lot of financial instruments that would otherwise be a bureaucratic hell, properly used they’re beneficial for both investors and clients.
- NFT tokens (yes, I know what I did there) are worthless without an external element to recognize them (whether automated, legal, or human), but they tie well into the “code as law” ideal, and are a good fit for other… well, code. That means stuff like actually buying and owning digital goods, instead of the “buying” (until they decide to take it away) that media/software platforms are currently selling everyone onto (now that’s a scam). Or to be not worse, but quicker and more versatile, than a digitally signed notarized document.
- Decentralization is nearly worthless, except as the basis for independent verification of transactions. Whether they come from a more or less centralized source, is secondary.
- Self-custody is only for the really dedicated; 99% of the population doesn’t need it, doesn’t care, doesn’t want it, and would more likely be hurt by it. Check out the PGP “web of trust”, and Namecoin, for cautionary tales. Banks were created precisely to avoid self-custody, which used to be the norm before them. Also why the average person loves to keep all their data only “in the cloud”.
- Apps don’t need all to be OpenSource, decentralized, or audited; they can be private for a private purpose. Just don’t use someone else’s private app.
- The “web3”, is a nonsense buzzword. A “decentralized” web is just called “the web”, no need for any blockchains or anything, hyperlinks are more versatile anyway; the Fediverse or e-mail are “decentralized apps” working just fine, sometimes called “self-hosting”; token economy is simply called “economy”; storing data off-premises, is either “the cloud” or “someone else’s computer”; nobody wants “unstoppable” apps, just apps that fulfill their promises, then stop wasting resources.
I get how attractive all the buzzwords and ideals are, particularly for someone interested in programming, but as someone else said, get a sense of how, and why, the current systems work as they do, then you’ll be able to better separate what has some potential, from what’s just buzzwords to blind you to what’s going on in the back.
Unless, of course, you’re up to don a sparkly suit and try to con others… but beware, there are people with decades more experience out there doing the rounds.
For a start, bitcoin is revolutionary. It solves all the problems with the banking system.
For example, people’s card details get stolen all the time. Bitcoin had solved this by using a new public key for each transaction.
When something is purchased using a credit/debit card, you are effectively using the same public key for every transaction. So what is happening is replay attacks. This type of scam is inevitable because the banking system is insecure by nature. It’s built on a foundation of insecurity.
Bitcoin fixes all that. Bitcoin or similar is necessary for money-based economies to continue to work in the future.
Bitcoin and crypto are more than this. This is just one of the important innovations bitcoin makes.
Sorry but your examples of the problems are pretty minor and solvable by other means (you can’t do much with my credit card details because they require strong authentication which uses one-time passwords). Also, you conveniently leave out all the problems with cryptocurrency. It’s not like you’re protected in any way. We also do not have any adopted implementation of cryptocurrency that’s not slow and super wasteful of resources. So far they’ve also had the ponzi-scheme problem… first adopters can become very rich but late-comers get crumbs or lose everything.
You make a lot of points. To explain all of those things, I would news to make a very long post. i think i will do that when i get time.
I think it’s so exciting because those blockchains solve a lot of problems and are a land of possibility.
Yes block chains predate bitcoin and are very useful. Git uses them. A currency is a perfect use case for a block chain. You need to robustly store balances and transactions so they can’t be tampered with.
I would say it’s insane to have a currency which is not block chain based. Too easy to fiddle your finances.
