I think it's more a case that anyone who was involved in crypto early, and who has actually taken the time to understand the technology, has realised about a decade ago that crypto currencies are mostly useless.
But then people had they idea that they could still make money from it by grifting people if they just added layer upon layer of complexity in order to disguise the ultimate uselessness of the underlying technology. That is where all of your Ponzis, rugpulls, NFTs and everything else comes into the picture.
> I think it's more a case that anyone who was involved in crypto early, and who has actually taken the time to understand the technology, has realised about a decade ago that crypto currencies are mostly useless.
I don't know what it is about crypto that makes HN commentators want to make the most ridiculous, put-downy statements without evidence to back it up.
Crypto is not mostly useless, it is just that people don't like the uses. crypto is absolutely massive for avoiding capital controls in countries with inflation, etc.
> I don't know what it is about crypto that makes HN commentators want to make the most ridiculous, put-downy statements without evidence to back it up.
HN has many people who understand how technology work and a smaller but still large number of people who understand economics. Cryptocurrency has a few people like that but also a ton of get-rich-quick types who think their best work is making random claims until someone buys whatever they’re selling. We’re a decade and a half into that, with billions of dollars of real money pumped in and almost no benefit outside of some early investors being able to cash out before the inevitable dip.
At this point, the onus is on anyone promoting cryptocurrencies to show up front why they’re different than their waves of predecessors. One big challenge here is the inherent conflict of interest: unlike other things which have come in and out of popularity, someone who tries cryptocurrency but realizes it’s not really useful to them doesn’t have an option for getting out without a financial loss which doesn’t involve finding a buyer for something they know isn’t really worth the price. If you backed MongoDB a decade ago, you can just switch to Postgres without either eating a loss or finding someone to buy your old Mongo server.
This also leads me to your next sentence: for years, the claim was that cryptocurrency was going to transform the financial world and beyond. Sales guys went on at length about how you’d use blockchains to buy coffee and a ride to work, make sure the farmer who grew your coffee beans was organic, store your software licenses, record the deed to your house, etc. They couldn’t explain how any of that would work and dismissed criticism, and were especially upset if people said the only real use cases seemed to be illegal transactions. Now, in 2023 we’re back to the primary use being breaking laws, hoping that the government in question chooses not to monitor cryptocurrencies?
> Crypto is not mostly useless, it is just that people don't like the uses. crypto is absolutely massive for avoiding capital controls in countries with inflation, etc.
>Cryptocurrency has a few people like that but also a ton of get-rich-quick types
There are literally hundreds of millions of people who're into cryptocurrencies...and you clearly don't have a clue what kind of people are into it and to what degree. I'd suggest not to make up statements like this if you want your opinion to be taken seriously. FYI bypassing capital controls with cryptos does not necessarily mean "breaking the law". Learn a thing or two if you're going to spout nonsense.
What an elegant description! I completely agree with you. Back in 2013, I looked at the massive number of financial middlemen on Wall Street and thought Bitcoin (or a future blockchain) could help lubricate the system. It took a few years for me to realize that blockchains are fundamentally flawed and cannot compete at scale with other technologies.
> Crypto is not mostly useless, it is just that people don't like the uses
Crypto has legitimate use as a rebel medium. It’s also plagued with criminality. Its promoters had a decade to clean up its act and refuse to self regulate.
That’s soured the public’s mood towards the whole enterprise. If crypto’s benefits are niche, its development should be niche. And if its sole beneficiaries are people in failing foreign countries, it might make sense to put the whole thing under the aegis of State versus continuing to create chaos from the private sector.
This only applies to literally one or two cryptocurrencies, stuff like Monero. They're very much the exception to the rule. Most cryptocurrencies like Bitcoin and Ethereum just publish the entire ledger which is constantly being pulled in by the PLA, the SEC, the FBI and myriad other law enforcement authorities the world over. Not to mention Chainalysis.
If the government that's oppressing you is capable enough to oppress you they're more than capable enough to, in the fullness of time, deanonymize your transactions and send you directly to jail for them. You're not just defending against the current start of the art tech but all future improvements - against an adversary with dramatically more resources than you have.
Illicit transactions on public ledgers are simply prosecution futures. People get jail time constantly for crypto transactions.
If I were a dissident in a country like the PRC hypothetically, I'd run like hell from crypto. Talk about asking for trouble.
That's before we even get to the point of how you plan to acquire these currencies without the government noticing.
They have a use: gambling and speculation at a massive decentralized offshore casino. Coinbase and Kraken are the cage. Binance, for example, and DeFi are the table games.
> crypto is absolutely massive for avoiding capital controls in countries with inflation, etc
etc doing some heavy lifting here. The article is about US-based crypto company. How is your list of massive uses applicable to US specifically? (I actually have sympathy for coinbase for at least trying to follow some rules)
Yes, evading capital controls is illegal, part of the informal economy in large parts of the world, and very helpful to many people.
I also think there are useful legal uses, but yes - where crypto has the best comparative advantage is when people are trying to circumvent harmful laws. Not every country is a (relatively) well-run procedural democracy. Crypto helps people route around that.
> > crypto is absolutely massive for avoiding capital controls in countries with inflation
Inflation hedge means mantaining parity against a weighted basket of stable currencies such as USD/EUR/CHF/JPY. Maybe gold?
Bitcoin didn't mantain parity at all, it's up some 20,000% since 2013 and +∞ since its inception.
So crypto failed as inflation hedge too, because the world of finance is very specific, you can't say 'this asset is an inflation hedge' and then it's up 20,000%
It also failed as a tool for capital controls and tax evasion because if you do that sort of things you don't want publicity...what happened is that crypto-bros and crypto-enthusiast went on to scream off the top of their lungs and it resulted in the death of the largest capital control avoidance use case: getting money out of China.
Nobody uses Crypto for getting money out of China anymore.
> Bitcoin didn't mantain parity at all, it's up some 20,000% since 2013 and +∞ since its inception.
Dai and other stablecoins maintain parity and are what is mostly used.
> It also failed as a tool for capital controls and tax evasion because if you do that sort of things you don't want publicity...what happened is that crypto-bros and crypto-enthusiast went on to scream off the top of their lungs and it resulted in the death of the largest capital control avoidance use case: getting money out of China.
I don't know what to tell you, these are heavily used behind-the-scenes in the dollar black market in places like Argentina, etc.
> Nobody uses Crypto for getting money out of China anymore.
Yeah, the informal economy is not actually very large in China, it's not a good example.
> > Dai and other stablecoins maintain parity and are what is mostly used.
Dai and stablecoins are currencies issued by private companies, if the private company sponsoring it were to disappear, the decentralized and federated (or whatever) community won't be able to support such a huge undertaking.
Besides the whole thing is pointless because whatever authority or control system you are evading with crypto sooner or later you'd have to come back into it, because nobody sells food, water, shelter, houses for crypto. Nor bitcoin nor stablecoins. Actually it's worse because the authorities will be waiting for you at on and off ramps.
Wrong from the jump about Dai, and I don't think you know about how black market cash economies work - there are plenty of informal economy places you can exchange local currency for dollar, dollar for crypto, etc.
Meh, I'm no bull but I also don't think "cryptos are mostly useless" is accurate. I believe there are solid use cases for distributed global ledger and digital replacement for cash. Is Bitcoin the winning/best manifestation? I doubt it, we likely need something much more energy efficient (like Chia is trying to be). But I don't think the idea is bust. It just isn't as overwhelmingly applicable as people dreamed it might be. We're trying out use cases, vetting the good ones and sometimes painfully learning the which ones were stupid or bad ideas. And once all the speculation settles, I do think true currency is still a viable one. Logistics and markets are another, etc.
I think that it's still unproven that a distributed global ledger is actually a fundamentally useful thing, outside of speculation. We're 15 years out from the invention of Bitcoin, and if all of blockchain technology snapped out of existence today, there are very few people, other than speculators, who would be impacted. It has comprehensively failed to be adopted into any value chains.
Which is why I'm extremely long on crypto and patient. It takes more than 15 years to fundamentally change the type of things crypto might really be useful for. And as a currency it's already shown traction, just not ubiquitous adoption. The currency use case requires people to stop creating volatility by hyper speculating with it, so I welcomed the crypto winter. I remember when people bought pizza with bitcoin. It wasn't that long ago, as you point out.
I don't think anyone here is arguing that digital cash or a global ledger is bad they are arguing that the specific structures and incentives of crypto are bad.
Bring on the digital cash IMO but bearer instruments underpinning any large scale finance is a recipe for disaster.
I think people are latching on to the magnitude of your claim rather than the direction and therein missing the point. FWIW, as somebody who meets your criteria, myself and my network of people from that time offer much credence to your claim.
Even back in 2016/17, many people involved were openly bemoaning how 80+% of ICOs were unregistered security offerings to vaporware.
You can almost pinpoint the inflection point at which Coinbase decided their goal was short-term profit maximization vs developing a healthy ecosystem. The company in the last 5 years is completely unrecognizable in contrast to when there were only 3 coins you could buy from them (USDT, BTC, ETH).
Coinbase tried to be the good guy in crypto. They lost money. Then they tried to be the good guy with a sideline in shitcoins. They lost money.
No matter how this case winds up, Coinbase is in a terrible financial position. If you were a Wall Street bank, would you give them financing right now?
But then people had they idea that they could still make money from it by grifting people if they just added layer upon layer of complexity in order to disguise the ultimate uselessness of the underlying technology. That is where all of your Ponzis, rugpulls, NFTs and everything else comes into the picture.