[poof131]

A few months ago I agreed with her entirely. Tether is an unbacked fraud and NFTs are being front-run [1, 2]. The mid-level marketing Ponzi vibe is crazy. The latency of applications on the blockchain is atrocious. But more recently after learning from and interacting with people building in the space my assessment changed. There is an interesting intersection between tech, communities, and economics. There exists a transparency in the open-source code of smart contracts that will disrupt the current gatekeepers like the internet did.

Certainly, there are problems, but some things will live beyond the crash that is coming and change things in ways no one can be sure of. The internet started in the 1960s and was opened up commercially in 1989.[3] It feels like we are somewhere between 1995 and 2000. The energy feels similar with people trying to shove old paradigms into a new world, vaporware companies, and insane investments. I don’t think we’ve seen the top and it will likely make the crash of 2001 look small by comparison. I may be wrong, but if I’m not, it still is early.

[1] https://bitfinexed.medium.com/tether-is-setting-a-new-standa... [2] https://twitter.com/Foone/status/1457749433844568066 [3] https://en.wikipedia.org/wiki/History_of_the_Internet

[saalweachter]

I'm sorry, I'm not trying to call you out personally, but this is itching my brain something fierce so I have to blurt it out, and hey, it's the internet. A little derailing never hurt anyone.

It's amazing to me how universal the "I used to be a non-believer" line is in evangelism. From the classic "I used to be an atheist but I've been born again" to all the members of political party A claiming to have been a member of party B before seeing the light to technological evangelism.

It just jumps out at you after awhile.

[mw888]

That’s a nice little Kafka trap you’ve constructed to disregard the people who change their minds away from what you think. So every time someone changes their mind and uses their previous opinion as informative you are going to non-committally imply it’s “evangelism?”

[saalweachter]

It's not really a trap -- it's more a rhetorical tactic.

The trick is that when you say "I used to believe X, but now I've realized I was wrong and believe Y", you can get away without giving evidence for why X was wrong and Y is right. You appeal to a commonality between you and your audience (your audience believes X, you used to believe X) and by presenting your change you imply that they are being left behind, that they have missed something you have seen.

It's such an effective rhetorical tactic that speakers will sometimes make up a conversion experience to use in their evangelism, even if they have always been a member of the faith.

There's nothing wrong with changing your mind, with adapting to new evidence. But you shouldn't confuse someone's declaration that they have changed their mind with evidence for the position they have adopted; that's where logic and rhetoric diverge.

(And again, I'm not trying to start something with the GP; I am fascinated by the universal utility of the rhetorical device more than this specific case.)

[samhw]

Thank you for writing this: it crystallises something that’s always annoyed me about the trope-ridden evangelist shtick. You’re absolutely right.

[crdrost]

Late to the party but FWIW I used to be an atheist and then a Buddhist and am now a Christian...

My attitude is very different from the evangelist’s, it says “look that was an important part of my journey and if that’s the direction you’re going, don’t let me dissuade you. I can tell you why those didn’t work for me but I can’t hold up my present consciousness as “the only correct thing, believe as I do or else you are irrational or anything like that. Heck I am sure that we are both irrational in innumerable ways and why would I pretend I’m more sane than you?”

This fatalism also infects a lot of how I teach things like physics, I tell people a lot that “learning is pain—or more precisely, learning abstractions relieves a pain and chaos and difficulty such that you can only truly absorb the abstraction when you have felt the confusion it addresses. So I can no longer pretend that ‘now that I have suffered through all of that, here is the Right Perspective so that you don't have to!!’... I’d have to take you through the suffering to get to the teaching on the other side.”

[Valakas_]

I'm sorry, but I will do this: I used to think like you're thinking. Pointing other people's logic fallacies, understanding sophism and the logical soundness of arguments.

Logic, for human debates, is very nice in theory. But there is a reason humans adopted shortcut thinking and don't use logic all the time. We are not robots. We don't have infinite processing capacity, and statistics and probability save A LOT of time. For example, doing strawmen fallacies is useful. It allows you to filter through a lot of crap before investing time in digesting whether what that person said makes sense or not. If you would go into any conversation with a blank state of "Let's analyse the logic here" Good luck with that.

So we adopt shortcuts. What shortcut is he doing? "I'm like you" is indeed establishing commonality. The person is saying "I get where you're coming from, i've been there, so I understand at least some reasons why you currently think that way." This is useful if the person is being honest because it let's you know that this person might be saying something more valid than if they had no idea where you're coming from. It means they were once in your position, and something made them switch. It's different than if they never had been in your position. They never had to think anything through. So knowing this is useful. This saves time. Is it fool-proof? Not really. People can lie, or might have not thought that much about it anyway, but like I said people are not robots, and we can't analyse each argument like if we were one.

So rather, let me also help make a shortcut and your argument more clear: Don't call out this behavior, which from an honest person is good, call out what you're actually thinking that he's doing - that he's trying to manipulate readers. Why you would think that, I don't know.

[Sholmesy]

S/he's not disregarding the people who change their mind, he's pointing out the emptiness the trope of "I use to be X, so I know what it's like".

Changing one's mind should be encouraged.

[hooande]

stating that you used to be a non believer isn't necessary. he could have made all those points about blockchain without that piece of information. the GP's point is that the decision to add it is worthy of suspicion

[z3c0]

Seems like a reworking of the "everybody has an agenda" retort you see so often these days. It's a slippery slope that only leads to dying a curmudgeon, as all chances for new perspectives were rebuked as agendas/evangelism/propagandist/etc.

[antifa]

Or, it's a slippery slope that only leads to keeping all your BTC/ETH and missing out on what getting scammed 20 times a year feels like.

[z3c0]

Strange, I've managed to do all of that without being needlessly cynical.

[CRConrad]

Me too: I'm only cynical because it is needed.

[antifa]

99% of random new cryptos have been scams or useless, so if anything the user was too generous with their politeness.

[TomSwirly]

If the comment gave any actual reasoning, it wouldn't be open to that criticism, but as it is, it's empty hype which deserves all the criticism it gets.

[throwaway98700k]

It’s a dangerous attitude because it has a paternal edge to it. Any “enlightenment” naturally leads to seeing others as unenlightened.

[nyolfen]

it is dangerous to say that you have changed your mind about something?

[CRConrad]

Yes, to say that you have changed your mind about something as if that carries any particular weight in favour of that something is "dangerous" to the recipients of your message, as it's an underhanded debating tactic designed to persuade them of something that has no actual persuasive arguments in its favour.

[nyolfen]

can you point to where in the comment OP indicates that his opinion carries 'danger' for the audience? the comment is literally "i used to think this was irredeemable as well, however my personal opinion has shifted, caveated by the fact that i still agree that there are tons of scams and a crash coming"

[CRConrad]

Sorry, I'm not quite sure what you're talking about. For one thing, nobody else has "literally" said that; your comment is the only one Algolia can find with those exact words.

For another, I can't quite see what's not to get; what is it you're not understanding? saalweachter pointed out that "[i]t's amazing to [them] how universal the 'I used to be a non-believer' line is in evangelism" (Further expounded upon in https://news.ycombinator.com/item?id=29948754 ); throwaway98700k simplified to "[i]t’s a dangerous attitude because it has a paternal edge to it"; you asked whether it is dangerous to say that you have changed your mind about something; and I tried to explain that yes, it is, and why. (You might notice that my reply, like your question, was couched in quite general terms: The danger of "conversion" claims in general, without reference to any particular "OP" in this thread.)

But, to explain it again: No, of course OP doesn't indicate that their own opinion carries danger for the audience. (Would you?) That is precisely the danger, that "OP" (assuming you mean poof131) didn't acknowledge that their "conversion" isn't an argument in favour of "conversion", while still mentioning it as if it had something to do with anything (which, as saalweachter explained, tends to carry convincing weight in people's minds even though it logically shouldn't). Sorry, I don't know how to explain it better. Except, perhaps -- did you think this discussion is about whether the "conversion" claim would be "dangerous" to OP himself? That's not it. The danger is that conversion claims tend to persuade people more than they should; the danger of people getting duped into believing things that aren't true just because someone successfully (maybe even unconsciously) uses a rhetorical tactic.

AFAIK, I never claimed OP themselves indicates that their opinion carries danger. That's precisley why I agreed with the posters who did it for them, and spelled it out to you in my GP. Is there anything else in that, that you still don't understand? Besides your misapprehension that I claimed "OP" had said that, I mean (or possibly that the danger mentioned would be to not to "OP" but to the audience)? Which I sincerely hope is (are) thoroughly dispelled by now.

[mahogany]

Alternatively, what if they simply learned something new which caused them to change their belief in something? It's better to focus on what caused their mind to be changed (it may or may not be bunk) versus focusing on the fact that their mind changed at all (which can certainly be a good thing).

[antifa]

> what if they simply learned something new which caused them to change their belief in something?

Then they would have shared that, instead what we got was indistinguishable from "some charismatic people dupped me and/or I'm in on the scamming now."

[mattdesl]

it goes both ways – "I used to be religious, now I am an atheist"

(I was also against crypto/blockchains when I first learned about them last year)

[antifa]

It really doesn't go both ways.

It's "I didn't find any evidence for God, so I stopped believing." vs "I believe God is real but I can't prove it".

When somebody is telling me they think God is real, they're trying to sell me something, or they think it's important to tell me.

When I tell people I'm an atheist, I probably didn't want to have to tell anyone, and I genuinely don't care what you believe unless you're using it to hurt others.

[mattdesl]

it’s all relative, depends on your vantage point.

just look at the OP thread that led to these discussions: the author is vocally decrying blockchains. if you view anti-crypto as the atheists in this analogy then they sure do make a lot of noise on HN (these kinds of posts routinely make the front page).

[antifa]

> they sure do make a lot of noise

What, you mean like randomly, unprompted? For no reason? What are they trying to sell you?

[mattdesl]

basically: adherence to centralized systems of value transfer, rejection of decentralized alternatives.

[mrelectric]

As usual, truth is somewhere in the middle.

[CRConrad]

Quite often, it isn't.

[tomxor]

The parent's perspective does not come across as an evangelist's though. Quite the opposite. It's balanced, seeing the hype for hype, seeing the flaws, and yet seeing that there is still some truth and potential buried in there. The world is grey.

[TomSwirly]

> seeing the flaws,

The article names none.

> yet seeing that there is still some truth and potential buried in there.

The article details none.

> The world is grey.

"Everything is true, even false things!"

[tomxor]

I'm commenting on the parent comment, not the article...

[floodyberry-]

There was no substantial justification given for changing their opinion. IF it was an honest post, it was entirely unconvincing

[tomxor]

> But more recently after learning from and interacting with people building in the space my assessment changed.

[CRConrad]

Yeah, exactly: That's not a reasoned or reasonable justification.

[lumost]

You know, it's funny. I've worked in and around analytics for a long time now, and I've had the thought that blockchain enables the following.

1) A common "universal" transaction data source

2) A shared, readable format

So the thought occurred to me that as soon as blockchain apps/currencies became popular, people would want analytics on them. There would thus be a startup opportunity for unprecedented analytics visibility into transactional data from a third party without needing to build bespoke integrations into high security/compliance systems.

If a blockchain backed currency was widely used, a third party could easily estimate the real-time sales flow of every brick and mortar store location. You could have real-time auditing and quarterly tracking of both public and private corporations available from a third party. Asset transfers, smart contracts, and their real world equivalents could be instantly monitored - allowing the early detection of emergent supply chain bottlenecks.

The problem with all of this is that in the 5 years since I had this idea, the only use cases for BTC and other cryptos has been price speculation. The market for such analytics products is effectively zero.

[big_youth]

Blockchain analytics are a big sector. Companies like Coinbase and Binance have spent billions acquiring blockchain analytics firms.

Additionally, I think there is big money in selling blockchain analytics to governments for the money laundering, darknet markets, and fraud sector.

https://www.coindesk.com/markets/2019/02/19/coinbase-acquire...

https://www.coindesk.com/business/2021/04/30/coinbase-to-acq...

https://www.cnbc.com/2021/09/09/mastercard-to-buy-blockchain...

https://www.coindesk.com/markets/2019/12/03/binance-acquires...

[floodyberry-]

There is no future in third party analytics because any "blockchain" that is globally adopted and used for more than shitcoin speculation will be zero knowledge

[samhw]

What do you mean, “will be zero knowledge”? How does that apply to a blockchain in a currency context, when validating a new transaction requires knowledge of both parties’ transaction history?

[floodyberry-]

With zero knowledge proofs, you do have their transaction histories, and you can verify that they are consistent, you just can't tell who the parties are or the values they're transacting

[ptx]

Making all their real-time sales data public, and thus available to their competitors, doesn't seem like something most companies would want.

If the blockchain does enable this, wouldn't that just lead either to 1) companies not adopting blockchain, or 2) some solution for hiding the data and defeating third-party analytics?

[lumost]

Possible, however having this data available makes accounting, and taxation trivial. Money laundering, fraud, theft, and other illegal activities also become extremely difficult to hide.

Which is to say that investors, governments, financial institutions, and small businesses unable to afford external auditing and accounting probably want this capability more than individuals. I'd argue that our current lack of financial transparency may be more of an artifact of banking technology limitations rather than an intrinsically desirable property.

[jcbrand]

You were right, blockchain analytics was a great startup opportunity and there are already a bunch of companies, like Glassnode, doing blockchain analytics.

You also seem to be missing a lot of interesting stuff happening with cryptos if you think it's exclusively price speculation.

[lumost]

GlassNode's tagline is "Time crypto market tops and bottoms.", I don't doubt that simply analyzing the exchanges is a valid market. But not one that I think is particularly large, particularly not when the exchanges can add their own analytics at any point.

[crehn]

> There exists a transparency in the open-source code of smart contracts that will disrupt the current gatekeepers like the internet did.

Could you elaborate which gatekeepers it will disrupt?

[unityByFreedom]

IMO social media needs competition but I don't think it will be disrupted by blockchain or decentralization. It will be disrupted by a continued pursuit of competition by doing things like supporting net neutrality. That keeps the playing field level and prevents current big players from becoming further entrenched. Big tech's monopolies are encouraged by lower-level-monopolies owned by Comcast and the other internet media conglomerates. To solve the problems higher in the tree we should get at the roots.

[tim333]

It is somewhat disruptive to banks. You can invest stable coins and get interest for example which is higher than bank interest. And the operator doesn't need to spend a fortune applying for banking licenses for each country they operate in.

[doomrobo]

Absolutely not. The reason bank interest is lower is because the FDIC ensures that you get your money if the bank stops existing. If the company backing your stablecoin stops existing, what are you left with? Nothing, of course

This not disruptive. This is just normal investing with all the risks attached

[tim333]

According to Nexo "Disrupting the financial system, one bit at a time." they have 3 million users on their saving platform. (https://nexo.io/about-us). I haven't used them and am not recommending them but there seems to be something going on there.

[CRConrad]

> not recommending them but there seems to be something going on there.

Isn't that exactly what they said about tulip bulbs too?

[bufferoverflow]

FDIC doesn't have enough money to cover everyone in case of some really bad event. And FDIC is useless when your currency is devalued / hyoerinflated.

[antifa]

What's an example of an event where the FDIC needs to cover everyone, but the blockchain isn't taken offline or worse?

[ahtihn]

Try looking into why these investments have higher returns than a bank account. The risk profile isn't the same at all.

If you want returns in traditional finance, you don't stick money in a bank account. You buy bonds and/or stocks.

[cuteboy19]

You say this on a thread that confirms Tether to be an unmitigated fraud. How and why are we supposed to trust in USDC, USDP and all the other permutations of USD to not be frauds themselves. It is easy to give a 10% return when all your really doing is offering unbacked IOUs

[landemva]

For USDP you could look at the NY regulatory compliance of it. USDP appears to be the most regulated USD token.

[olalonde]

> A few months ago I agreed with her entirely. Tether is an unbacked fraud and NFTs are being front-run [1, 2]. The mid-level marketing Ponzi vibe is crazy. The latency of applications on the blockchain is atrocious. But more recently after learning from and interacting with people building in the space my assessment changed.

I feel like a lot of the cryptocurrency critics commit the "fallacy fallacy". That is, they have the following reasoning: people believe crypto is good because of X, X is false, therefore crypto is not good.

Yes, there are a lot of people who are into crypto because they think it's a way to get rich quick. Yes, there are a lot of guru technical analysts who sell bullshit dreams on their Youtube channels. Yes, there are a lot of criminals who use cryptocurrency. Yes, crypto attracts a lot of charlatans and snake oil men. Yes, there are a lot unbacked stablecoins and shitcoins.

Given the above, it's easy to dismiss all cryptocurrencies as a scam. But when you dig a bit deeper, you'll find that there is true technical and financial innovation. For me, Bitcoin's potential to be a programmable money without government or central authority is a very powerful idea. The idea that you can be your own bank and do p2p electronic money transfers without an intermediary. That has never been possible before.

I could go on but my point is that even if there are many wrong reasons people like X, it doesn't necessarily mean that X is wrong/bad.

[nly]

Everyone doing P2P transfer and bypassing traditional banking institutions is a powerful idea... but ultimately everyone needs to agree on a single medium of exchange, otherwise efficient market pricing is too hard.

And it's debatable whether fiat will ever whither and die. The Government will ultimately have to endorse a currency for tax purposes, and they'll always seek to control the inflationary environment so they can maintain a workable budget and keep public services afloat.

Just a century ago or so, banking was only for large corporations. Commoners and small businesses all used cash and exchanging bits of valuable metal was the norm. I mean, believe it or not, we had good reasons to abandon that simpler system in the first place. Things are better now. Markets are more efficient.

[fragmede]

> but ultimately everyone needs to agree on a single medium of exchange, otherwise efficient market pricing is too hard.

This is one place that there is something interesting in the crypto space, but because it's so "inside baseball"/esoteric, it doesn't usually get any mention on skeptic's forums. Given asset A and asset B, given individual A with asset A, B with asset B, and C who wants to trade their asset A for B, how do you get all three to come together and make it all work. The fact that there must be exchanges is obvious, what's less obvious is how they actually work, how individuals A and B incentivized to participate, and what sort of payment they get out of it. Well, that's one of the not-entirely-trivial usages of smart contracts I've seen, where A and B get a payout and C gets what they want, but with more than 3 individuals involved. It's not actually important to anyone outside of the crypto space but it's interesting to take a look at the implementation details for the curious.

[meowkit]

Automated Market Makers (AMM) and Liquidity Staking/Providers are terms for what you have described.

[samhw]

Yes, I’m a strong believer in cryptocurrency, but I don’t believe any current cryptocurrency will be the one that changes the world. They deserve praise - some of them - for laying groundwork, but I tend to believe that the world-changing crypto will have to behave more like Moxie Marlinspike described in his recent essay: i.e. truly building on cryptography as the source of trust, not distributed consensus among servers.

The transaction processing mechanism will also have to radically change, and be detached from the mechanism for generating money (even if you believe the two should be proportional, to strictly couple them is an impracticable engineering failure).

As for Bitcoin, aside from the flaws in Satoshi’s scheme itself, the current Bitcoin system has suffered from focussing on its unexpected popularity as a store of value, which popularity has meant it’s incredibly volatile and thus useless as a medium of exchange or unit of account. Of course the slow processing as a result of the mining mechanism is also a major hurdle.

I hope something better will come about soon. I know that it won’t come from the world of people who suddenly idolise Bitcoin because of the cult around it. It’ll come from the people who were capable of reading the original paper and seeing its potential even before it was in the news - that’s a tiny subset of crypto enthusiasts, but I hope they stay motivated.

(Final thing: it’s ‘wither’, not ‘whither’. ‘Whither’ means ‘from where’.)

[DennisP]

> otherwise efficient market pricing is too hard

Oh I don't know, everybody's carrying around an internet-connected computer in their pocket, it can't be that hard to show current prices in a variety of currencies. But if it is too hard, then stablecoins backed by on-chain assets are another option.

Fwiw, Ohio accepts tax payments in Bitcoin: https://www.forbes.com/sites/kellyphillipserb/2018/11/26/ohi...

[thelastgallon]

> Fwiw, Ohio accepts tax payments in Bitcoin:

Ohio businesses can no longer use Bitcoin to pay taxes. Don’t worry, though. Sprague went on to say that in the 10 months since OhioCrypto.com launched, less than 10 businesses have chosen to pay their taxes in Bitcoin or other cryptocurrencies. No one is really going to miss it. [1]

https://thenextweb.com/news/ohio-suspends-bitcoin-tax-paymen...

[bufferoverflow]

> everyone needs to agree on a single medium of exchange

No, everyone does not. You can easily exchange the coins you don't like for the coins you do. It's that simple.

[CRConrad]

Yeah, sure it's that simple. Hey, isn't this all about decentralising power, everyone being their own bank? So let's be really decentralised: Everyone should of course be their own central bank ("Fed"), and issue their own "coin".

So when I want to buy something from or sell something to you, I'm gonna say that a MyCoin is worth ten YouCoin; you'll presumably try to claim the opposite.

How "simple" is that?

[donmcronald]

It’s a taxable event in Canada AFAIK, so I wouldn’t call it simple.

[gitfan86]

No one should be suggesting that 100% of crypto is a scam and that there will never be anything useful in the crypto space. Vitalik seems the be operating with best of intentions and IMO the threat of decentralized money has already effected the central banks in their thoughts around inflation.

My main problem is similar to the original article here. In 2014 Bitcoin was "The future of micropayments" 6 years later and now the narrative is that "Layer 2 networks are the future" It would be great if the crypto people could stop talking about how great the future will be and just deliver what they are promising

[slg]

>But when you dig a bit deeper, you'll find that there is true technical and financial innovation.

I will give you the technical innovation, but I really have not found anything financially innovative about cryptocurrency. What does crypto do that traditional currencies or payments systems don't? The only thing I see is that it largely replaces the old financial elite with a new financial elite and maybe under the right circumstances reduces fees for transferring money. That seems to be it unless you count circumventing financial regulation as a financial innovation.

[meowkit]

Seems unnecessary to nitpick innovation between the disciplines.

The technology enables many new tools to be developed and many old tools to be augmented. Saule Omarova (Biden’s comptroller pick who resigned) had some interesting ideas in her papers/essays. DLT-based deposit debtor accounts being offered by the government was one that I thought would be pretty great.

[slg]

>Seems unnecessary to nitpick innovation between the disciplines.

Cool technology has no value if all it is is cool technology. The important question is whether it enables something that wasn't possible before that technology. I have not seen a convincing example in which crypto does that.

>DLT-based deposit debtor accounts being offered by the government was one that I thought would be pretty great.

For example, how is this improved by using a distributed ledger here especially considering that this program would already be centralized by the government?

[WA]

Nah, it’s like this: people believe crypto is good because of X, Y, Z, A, B and C. All of them are false, except for C in some odd circumstances. Therefore, the current state of crypto is not good.

[dmitriid]

> But when you dig a bit deeper, you'll find that there is true technical and financial innovation.

Ah yes. The good old "just google it". There's literally not a single "dig deeper" resource on the internet that explains the need for blockchains/cryptocurrencies etc.

But sure, there are a lot of "innovations" with recursive circular "innovations" (like currency speculation, HFT and flash loans, all of "innovatively made available" by regurgutating the same fatasy tokens and pretending they are worth something)

[olalonde]

> Ah yes. The good old "just google it". There's literally not a single "dig deeper" resource on the internet that explains the need for blockchains/cryptocurrencies etc.

I just named a rather massive one in my comment.

[dmitriid]

> I just named a rather massive one in my comment.

Do you mean this one? " For me, Bitcoin's potential to be a programmable money without government or central authority is a very powerful idea."

It's really isn't a true technical and financial innovation.

So, you have a slow and inefficient VM that runs an esoteric programming language, and all this VM allows you to do is exchange fictional tokens whose primary value is derived from ... trading fictional tokens. That's all there is to this great amazing innovative idea.

> The idea that you can be your own bank and do p2p electronic money transfers without an intermediary. That has never been possible before.

Of course it has. Never on this scale, true, but "I will print my own money that you can only use in these specific circumstances, otherwise you have to convert it to actual money at severe discount/penalties" is probably as old as the world itself.

Also, there are reasons intermediaries exist.

[Kbelicius]

> I just named a rather massive one in my comment.

You named one that was envisioned by the creator(s) of Bitcoins 13 years ago and was subsequently abandoned. Today bitcoin is marketed as a store of value, not money. Also the idea that it is a P2P money without intermediaries is laughable. What are miners other than intermediaries in a transaction?

[dmitriid]

> What are miners other than intermediaries in a transaction?

Additionally:

What is "programmable money" without programmers writing unverifiable undebuggable code in esoteric languages other than intermediaries that you have to trust?

- https://web3isgoinggreat.com?id=2021-12-04-2

- https://web3isgoinggreat.com?id=2021-12-18-0

etc.

[olalonde]

Sorry to be blunt, but you both demonstrate a poor technical understanding of Bitcoin. Miners are not "intermediaries" and it is possible to send/receive Bitcoin with any regular programming language.

The links you posted refer to Ethereum smart contracts which are indeed prone to programming errors. The tooling around them is improving (e.g. debuggers, verifiers) and there are a couple of multi-billion dollar smart contracts which have stood the test of time.

[benreesman]

I have wondered for awhile why the crypto mega-whales in my vicinity are trading USDT at par or better over the last year or two.

My conspiracy theory is that when insiders trade a distressed asset at par or better it’s often a bailout expectation that’s really being traded.

Who has unimaginable access to financing, a “stablecoin” going so/so, and a primary line of business critically dependent on Tether, like, I don’t know, a massive exchange with the highest volume pairs all sharing USDT as quote?

[oneoff786]

It’s not that hard. When Bitcoin goes down, people like tether because it’s “safe” at $1. So bitfinex makes more tethers and trades them for bitcoins. When Bitcoin goes up, bitfinex sells the Bitcoin and gets dollars.

It’s fractional reserve banking swapped around, with no reserve requirements. The market is the bank.

And because bitfinex is not obligated to redeems tokens for $1 they have no risk. It’s in their interest to keep the market price at $1 because the longer it runs the more money they make but if there’s a run on the currency they can just shrug and go home with their bag of dollars.

[ricardobeat]

This is like giving central-bank levels of power to private entities. Which obviously follow from de-centralization. It’s insane.

The only way this could be a reliable replacement for our existing financial systems, would be with strong oversight from.. some kind of central entity that acts on behalf of society’s collective best interests.. staffed by people chosen through popular voting..

[landemva]

I stay away from USDT. The sooner it disappears, the better.

We no longer need central authorities to create good trusted products. Centralized can suck (communism, Federal Reserve bailouts of banks they regulate). DAI decisions are decentralized and done by the DAI holders. You may want to check it out.

[oneoff786]

The potential for good actors isn’t really as noteworthy as a system that enables bad ones.

[RF_Savage]

Wouldn't USDT crashing wipe out most large cryptos as well? 70% of BTC liquidity seems to be in USDT.

[tim333]

The price of things like USDT are effectively set by Tether rather than the free market. If Tether have billions of US$ and offer in the market to buy back USDT at 1:1 then that's what they price will be near enough.

[bb88]

What you've described is metastasized moral risk. We could argue that maybe some risk should be rewarded. But not all risk, such as spending billions in beanie babies as a corporate strategy.

[benreesman]

Eh, there are some important distinctions here. Pricing risk is an activity with fairly clear value, and as a result you can make a ton of money by being good at it. Assuming risk is something that every individual and organization does to one degree or another, and to the extent that they do so in a rational way it’s because they are pricing risk well or delegating that.

Your use of the word moral makes me think that you might be talking about shifting risk off onto others. Keeping the upside in some more favorable ratio to handing others the downside is (IMHO) immoral but also one of two main ways that people get rich, the other being inheritance.

[bb88]

Oh pardon, I meant moral hazard.

[delaaxe]

I mean Binance has BUSD no?

[dmitriid]

> There exists a transparency in the open-source code of smart contracts that will disrupt the current gatekeepers like the internet did

Ah yes. How can we forget the community-audited and vetted smart contracts that ended up draining its users' wallets of all their money. Transparency!

[sabhiram]

Well, as opposed to hearing "oops our black box implementation of your information got hacked", I honestly don't mind the trend of "read the contract, it is code". Sure it can be misleading, sure it can be intended to trick someone. However, code is law, and even backdoors are "code". Instead we should fix the backdoors so that code can be reasonable "law".

[dmitriid]

> Instead we should fix the backdoors so that code can be reasonable "law".

There never will be. For the absolute vast majority of people, programmers included, these "contracts" will be a yet another blackbox.

Moreover, it already is a blackbox even to the people who develop them, because they can't find errors in their own software and APIs.

[somebodythere]

Every time a nascent technology bubble crashes (dot com, AI winter, crypto...) speculation gets reset, scams and projects with no future get wiped out, and the space gets healthier.

[TomSwirly]

And yet you still don't name any actual useful applications!

The Ethereum world computer has 300,000 nodes, and yet has 1/5000 the computation power of a single Raspberry Pi 4.

Except for actual cryptocurrencies, all the "web3" applications could use boring old 1980s vintage cryptography, be just as distributed, and run ten thousand times faster and cheaper.

----

So far the only way anyone has ever made any money from cryptocurrency is to sell it to someone for more fiat currency. In fact, in real terms, it has net lost money because of the huge amounts of electricity expended.

So once people such as yourself purchase cryptocurrency, they know in their hearts that the only way they will make more is if further people buy into their Ponzi scheme.

Therefore, your comment above.

[doktorhladnjak]

The big question in my mind: is this the internet in 1997 or expert systems in 1982? It could be the next big thing. Or it could be an interesting idea that was oversold and overhyped, that never really disappeared but became irrelevant as its real value became a commodity that found its way into the software of established companies.

[samhw]

The worrying thing (for me) isn’t which one it is. The worrying thing is that so many people seem incapable of even making a creditable attempt at answering that question and analysing its fundamentals. This has opened my eyes to how many people only think through the prism of “well, this has got really popular lately, and the internet did that too, so this will be the next big thing even if I don’t know why!”. Survivorship bias is very very real.

[SZJX]

Or I guess many people are not dumb at all, they just simply want in and profit as long as the hype is still going and they (hope that they) are not left as the last people holding the bag. They might find all sorts of excuses to try to convince the others, even to some extent themselves, when they’re just fundamentally doing the above.

[CRConrad]

> is this the internet in 1997 or expert systems in 1982? It could be the next big thing. Or it could be an interesting idea that was oversold and overhyped

...and then returned a few decades later to be oversold and overhyped some more, this time as "Deep Learning" or "AI".

Seems the alternatives on offer are scam or scam. (Or scam, scam, scam, ham, eggs, and scam.)

[tim333]

A nitpick is that [2] isn't front running. Front running is where you figure an institution is going to buy lots of some stock and get a buy order of your own in first, typically done by brokers.

Making fake trades to make the price look like it's going up can be called market manipulation in this case I think. This is also called painting the tape. A similar but slightly different scheme is wash trading where you basically sell an asset to yourself to make it look like that's the price and that there is trading volume going on. There's a lot of this kind of thing going on with NFTs.