Episode 110 - Why I have given up on cryptocurrencies
Added 2023-04-21 14:24:01 +0000 UTCComing out with my frustration with the misdirection of Bitcoin and cryptocurrency as a whole.
Comments
Proof of work's fatal flaw is that the more people contribute to the network, the more costly and LESS efficient it becomes. Mining rewards incentivize against improvement, and Bitcoin money supply has been centralized within the hands of the ultra-rich "whales", while solving none of the problems of the traditional financial systems. This cryptocurrency "revolution" helps nobody other than ultra-wealthy, the lucky-few ones who "got in early", and fraudsters. Most of the regular folks are losing out.
The Hated One
2023-05-01 12:03:00 +0000 UTCAnother important factor is Proof of Work. It *has to cost you something* to create the "new" money issued in the block reward. It is important to consider the incentive structures that surround things like mining, and how they tend to regulate the whole system. This is why the difficulty fluctuates, for example, in response to network hash rate. Money in any form is a technology. And most people completely miss that it is mostly a social technology. Bitcoin didn't miss this in it's design.
Tim Le Pés
2023-04-28 01:48:44 +0000 UTCI know you're not a podcaster per se. But these apps are starting to support video as a media format too. Or, an "Alternate Enclosure Format". https://podcastindex.org/apps
Tim Le Pés
2023-04-28 00:26:39 +0000 UTCYou're done with Bitcoin? Can I buy some of your SATs? Here's my favorite way to use them. Ever heard of "Podcasting 2.0"? How about the Value for Value model? (https://value4value.info) V4V isn't about Bitcoin at all, really, but Bitcoin & Lightning are tools that can be used in that ecosystem. I am happily using SATs via the Lightning network to support Podcasters that I listen to in real-time. Newer podcasting apps let you "stream sats" per minute as you listen. Podcasters can see in real time when people are listening to their work, and have commented on the way that makes them feel viscerally connected to their audience. Way different that just throwing your content over a wall and wondering. These micropayments are not feasible by traditional financial rails. Podcasters can routinely sweep their Bitcoin / Lightning wallets into "real" dollars. NOT about :hodling:.. unless you want to of course. This really is a value transfer technology. Alby (getalby.com) makes it easy to get a (custodial) wallet connected to this ecosystem. But if you're technical enough you can totally use it with a self-custodied wallet... Oh padawan, you're doing it wrong. Or, rather, looking at the wrong things. You've drown yourself in the noise and are missing the signal. The white paper is the genesis, not the current reality. Bitcoin evolves. That is important to understand. One realization people in the community have is that the blockchain does not scale. But that is not an insurmountable problem. This is a highly creative group. 2nd layer networks evolve along with it, like Lightning Network as an example. In this rather functioning model, Bitcoin is a final settlements layer. Bank of International Settlements, or something. Lightning is like the SWIFT payments system. Like a debit card settlement layer for "retail" transactions. Your fiat purchase is not actually "final" for weeks or more if you're not using cash. Bitcoin is final every 10 minutes. Also. Bitcoin *is* different from the rest for a couple of reasons. It's design takes human psychology and behavior into account, and aligns incentives such that the overall system tends to self-regulate. For example, the miners couldn't force a favorable change or fork because the nodes, who verify blocks, said NO. I run a full node on a Raspberry Pi and participate in the network consensus. Me. I sit at the table, as an equal. No cabal at the center calling the shots. It's been tested, and will continue to be. And it will continue to evolve. Bitcoin can't be replicated because it reached it's critical and genuine decentralization before anyone had any idea that it might be "valuable" in a mainstream way. The "decentralization" of most of the alt-coins is a farce. A large portion of them are just ERC-20 tokens on the Ethereum blockchain. A very highly centralized blockchain at its core. Ever hear of someone forcing a Bitcoin fork down your throat? Ethereum did that, because they could. Bitcoin has no leader, no company, no "one" in control. No Vitalek, no Hedge Fund or VC backers with a 70-90% ownership of all the coins ever, which they got free in the "pre-mine". It is not a crap-coin, ponzi scheme, BS evil scam like so many of the others simply are. It is a brilliant technology, first popular with idealistic cyberpunks. But just because it *is* a functioning form of money, it will carry the baggage of the human predatory zoo that circles all forms of money. Bitcoin isn't special in that way. You get robbed all the time by scams in regular life. So you have to understand that this degenerate behavior is a human thing, not a Bitcoin thing. Now many, perhaps most of the Alt-coins actually are predatory scams. Affinity scams. Scamming you by riding on affinity to Bitcoin and it's notoriety when it hit some "highs" now and again. But considering the dumpster-fire that the Alt-coin landscape has become, it is no wonder that "crypto" has become a four-letter word. As someone who can appreciate Bitcoin's rather brilliant combination of code and understanding of game theory and incentives, it is getting insulting to hear Bitcoin called "crypto". Monero and a very few others have some utility, too. But they suffer from other problems. And, to be fair, are also trying to solve different problems. I see things like Monero being implemented as Bitcoin side-chains in the future. "Bitcoin is for enemies." And, "Verify, don't trust." are themes you may have heard. Bitcoin solved a very old problem in trust in the veracity of communications between parties at a distance that is more popularly known by a modern manifestation that shows up when trying to implement a decentralized digital currency, the "double spend" problem. But more to the point, it solved the problem of trust between strangers without middlemen. Also, Bitcoin doesn't care about my opinion, or yours. Or your law, or theirs. It is an idea as much as a piece of free and open source software. If you look, there is a lot of interesting stuff happening in the greater Bitcoin ecosystem. The people speculating with Bitcoin are doing it wrong. Forget about the alt-coin circus and mental zoo. It is a D I S T R A C T I O N. Let the SEC take the promoters of these unregistered securities, which most these crap-coins are, to court and jail or fine them. Bitcoin is seen as a commodity by the government, not as a security. It doesn't pass the HOWIE test (https://www.findlaw.com/consumer/securities-law/what-is-the-howey-test.html). But most the others do. [Forgive my US-centric references to law] Even if you wanted to, who you gonna jail over Bitcoin? Oh yeah... No one. There is no one in charge of it, or no one who can be coerced into "controlling" it. It's a genie that is out of the bottle. Let the rest of them burn. Bitcoin will remain. And that is something special. It's open source software, for pity's sake. And it's fun to play with. And it's awesome to be able to use it as a way to support creators I love. Micropayments are easy, affordable (since I determine how much), and feel good. And they can truly add up for the creators. Don't be such a downer. Eff the idiots who came along for the "ride". They miss the magic. Too dumb to see. Eff the copycats who just try to affinity-scam off of Bitcoin's mainstream notoriety for being some astonishingly good performing "investment". It's a technology. Still nascent in many ways, but it does have it's virtues. You're lost in the world of FUD and misdirection about what is even important about it. Never mind it has already been helpful for human rights, like Afghani women paid in Bitcoin that can't have it taken from them by the Taliban. Or the guy who got out of having his money confiscated at the border by autocrats because it was a seed phrase he had memorized and nothing physical to confiscate. Look at how horrid the fees can be to send money back home to relatives in foreign countries. There, my friend, is a fiat crime. I can also go on about other interesting things, like Stacker News. Funny, you don't find SPAM on a site where you have to pay a tiny tiny tiny bit to make a post. Guess it's not worth it to the spammers and botters. And when folks use money, even tiny tiny bits, to up-vote something, you start to see a lot more signal and a lot less noise. My post is long and I'm prone to rambling, so.... Just saying there is a lot, lot more happening out there than just some dumb daytrader orgy. Bitcoin solves problems. And it won't matter to you until you have a problem it solves. Then it will suddenly matter to you very much.
Tim Le Pés
2023-04-28 00:23:31 +0000 UTCI could argue with some points. In order to make transactions in a decentralized way, the tokens must have a value coming from somewhere. Bitcoin gains some of its value from its scarcity, no more than 21M will ever be in circulation. That is why it is considered (not by me) digital gold and a hedge against inflation, as fiat money can be printed however necessary. Stablecoins and unlimited supply coins are different, but traders will always try to make profit from the change of value and that is not necessarily a bad thing. I agree that crypto as a decentralized permissionless financial system has very much derailed from its original ideology through regulations, scammers, and people wanting to get rich quickly. However I understand the point of regulators, they have criminals to stop, taxes to collect and central banks to manage the economy. Even though they are doing a bad job at it, we may not be ready for financial anarchy. In our country the regulation is quite good but I haven't looked into MiCA at all and how it changes anything. I also thought about what you suggested for a fixed tax transaction system, combined with Monero-like encryption. It is definitely doable with a Central Bank Digital Currency. Actually, CBDC's could solve all the issues with the monetary system if done right, but I have a feeling that they will be done in the same invasive, greedy, authoritarian way as everything else.
Sakii
2023-04-21 18:25:41 +0000 UTCI unfortunately agree here, crypto has been completely overtaken and become almost synonymous with cryptobro prospecting and scamming and lost itself somewhere along the way. It was at the perfect intersection of being an exciting new technology and being related to financing that made it the perfect target to be hyped up and co-opted by people who didn't really care about the original vision and purpose of the technology.
ArdentSolarDust
2023-04-21 16:35:17 +0000 UTC
