[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.

[Kbelicius]

> Sorry to be blunt, but you both demonstrate a poor technical understanding of Bitcoin.

Sorry to be blunt but you are demonstrating your poor reading skills.

> Miners are not "intermediaries"

I have some bitcoin. How do I send them to you without miners?

> it is possible to send/receive Bitcoin with any regular programming language.

dmitriid was talking about, what you called, "programmable money" and not about sending/receiving bitcoin. You don't need knowledge of any programming language to do that.

[dmitriid]

> but you both demonstrate a poor technical understanding of Bitcoin.

No, we don't

> smart contracts which are indeed prone to programming errors.

Indeed. So. In the context of "potential to be a programmable money without government or central authority" you literally have to depend on an intermediary to write a smart contract and depen on that intermediary to write this contract correctly.

> 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.

Either all this is "too early" or "it has stood the test of time". You can't have both.

The fact that some contract exists, and handles "multiple billions" in no way, shape, or form disprove my original statement: "Programmable money" relies on intermediaries in the form of programmers writing unverifiable undebuggable code in esoteric languages