Or, you could just pick one computer, have it do the work and punish it by taking its money if it screws up (ETH).
But yeah you’re not wrong about minable coins.
It doesn’t require that much computing power, that’s just a variable that gets set.
If the difficulty were set lower, one average computer could easily handle it.
One variable, on 200 000 computers simultaneously.
Every time a transaction is made.
Which also means that the more blockchain gets used, the more expensive, slow and power hungry it becomes. It is doomed to fail and never be in worldwide use.
Compare it to something like AI, which gets exponentially better the more people use it. The same trajectory as the internet.
Compare it to something like AI
Probably good not to reveal how little you know about technology when making an argument regarding technology. I can’t stand these prompt kiddies thinking they know left from right.
Which is why people are so horny for chains using proof of stake instead of proof of work
How does proof of stake not become more expensive, slow, and power hungry the more people use it?
The more people who use proof of stake blockchains the more power it will require, same as the more people who visit CNN.com or the more people who turn on a light bulb, but it’s not nearly as much as proof of work.
The difference between proof of work and proof of stake is that the first one in order to function requires showing that someone did a bunch of processing on their computer. By attaching a financial cost (literally expending energy) to mining new coins, PoW helps avoid someone fraudulently taking over the network and issuing as many new coins as they want.
Proof of stake works by people who already hold coins putting some of them up as a kind of collateral, so it’s nowhere near as processing intensive.
Oh sweet. Let’s just set the difficulty lower, then.
But then every jabrony would be able to make money.
So, in other words, it does require that much computing power.
I love how one man created arguably the most complex puzzle in the history of mankind and people shit on it just because it’s literally hard to solve (aka “uses energy”) and the solutions have value.
What value is that?
The arbitrary one people assign to it by paying a shitton of real money for your fancy rows of 1s and 0s
In a trustless environment…
You’re handing over your valuables at gunpoint, nerd.
I think you meant to reply to a comment and instead replied to the post.
No, I’m just mocking Blockchain idiots in general.
Consensus algorithms lie at the foundation for a great many of the backend systems our internet depends on, massive scaling would be a near impossibility without them. – me, a 25 year backed engineer
It makes absolute sense that a massively scalable trustless system involving money would use a consensus algorithm with a large number of nodes.
massive scaling
Uh, yeah, after guzzling electricity like a small country, I’m sure bitcoin has massive scaling. Ability to process 9 transactions per seconds counts as massive scalability, right?
I assume you’re speaking Bitcoin, cryptocurrency that uses Proof-of-Work consensus.
Proof-of-Work is very secure, super decentralized, but it’s the culprit behind mining and subsequent electricity drain.
There are other consensus mechanisms, like Proof-of-Stake, to which Ethereum, Solana and many many others have migrated to or were based on to begin with.
Proof-of-Stake requires about 100x less electricity, is reasonably secure and is the default option for modern cryptocurrencies. Thereby the energy argument gets less and less relevant, while the fuss around it is only gaining speed.
Ethereum doesn’t seem to have great TPS either ( ~15 transaction/s ), and talks about improving TPS seems to have quiet down.
I think most eth-based transactions happen on different layers and then get settled on the main layer periodically. Same with Bitcoin, come to think of it. TPS doesn’t seem like a particularly useful number these days.
You have something like Nano that hits around 50 TPS and also uses proof of stake. Transactions are basically instant and it has no fees. It was always my favourite in terms of crypto personally.
Ethereum is a Layer-1, which is focused on super ironclad security and eternal preservation. It’s more of a catalogue than a practical way to transact. Now, Layer-2’s on the backbone of Ethereum (Polygon, Arbitrum, Optimism, etc.) are able to handle thousands of transactions per second.
For example, Polygon has a capacity to conduct up to 7200 TPS (while practically being used to the tune of 50 TPS simply because people don’t actually need that much currently).
If you want Layer-1 that is focused on speed, there’s Solana, for example, with 300.000 TPS and potential for 710.000.
This problem is essentially solved for everyday applications. The reason Bitcoin and Ethereum has such a low TPS is that they’ve never focused on TPS to begin with, instead opting for the most hyper-secure networks people store value in. I’m not saying Polygon or Solana aren’t safe - they’re perfectly fine - it’s just that Bitcoin and Ethereum have laser-focused on that aspect, making compromising the blockchain even by biggest of institutions entirely off the table.
It makes absolute sense that a massively scalable trustless system involving money would use a consensus algorithm with a large number of nodes.
Whoa whoa whoa. I suppose you didn’t get the memo:
,but the rule is to blindly hate any kind of technology that any one has used in insalubrious ways, in-spite of its potential for liberation and independence.
Couldn’t even be assed to fix the text of the main focus of the picture?
I’m working bruh, how much time do you expect me to put into a throw away meme?
More that the barest minimum, at least.
Fine, Dad.
There I fixed it.
Oh good Lord, I was partially inclined to agree but using generative Ai to make this point tells me everything I need to know.
If that’s your make or break, go ahead and break. No real loss if that’s your breaking point.
In-spite of its potential for liberation and independence.
When it shows that potential, maybe more people will get on board. Until then there are a host of problems that make a ton of people not want to touch it including but not limited to:
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a) Capitalists and scammy chucklefucks are already exploiting it the way they do with traditional currencies, except in sometimes new creative ways because of either the lack of regulations or because the technology inherently makes it impossible to trace. I don’t see that changing in a fully crypto world either, because people are always going to need financial services like loans and insurance on their savings and the banks will always have the imbalance of power.
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b) The currencies mostly benefit people with a ton of capital to handle consensus, which further entrenches the power imbalance found in (a).
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c) Insane amounts of resources are needed to reach consensus in a way that is not good at all for the environment. Sure we already use a lot of power to make our society run. But crypto is asking for more ON TOP of that, compounding the issues.
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d) Relying solely on crypto leaves people destitute if their wallets got hacked.
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e) Chucklefucks are using the technology to commodify and break the best part of the digital world which is the ability to have bit for bit reproducible copies of information.
Fix all of that and you surely would get people on board but I have yet to hear compelling solutions by cryptobros.
Fix all of that and you surely would get people on board but I have yet to hear compelling solutions by cryptobros.
I actually completely agree with all of your points. I also hold out hope for the decentralization of power, which is something I still think block chain and crypto have a role in. Its the same hope I have for the fediverse, that we can all ‘own’ or be a part of a broader solution through self hosting, development, and funding the projects we care about or think will make a difference.
I thought crypto had that potential, but because its looked at as ‘money’, the worst of the worst kinds of people steered its coarse. I still think the principals have this potential, and in more mature versions, I expect them to be realized. And arguably, they are being realized. In-spite of all of the shitcoins and scamcoins, bitcoin, the OG, is still extremely strong. I have no reason to believe that a bitcoin purchase made today wouldn’t still be considered as good of an investment as SPY was 8 years ago. I also think the generally dismissive tone of the case against digital currencies as scam is a little hilarious, considering that literately 90%+ of stocks admitted to the NYSE end up with a similar if not worse fate than the majority of (major) coins from the big boom we saw through 2020. A few stocks stay valuable throughout time, but that’s rare. Most end up valueless and eventually are delisted.
I think criticisms of digital currencies, especially decentralized ones, need to be put into the broader context of all financial vehicles that exist and are available. Likewise, crypto has potential outside of just digital currencies, and the insistence that its bad for the environment, well that’s largely solved outside of bitcoin, and likely will never be solved for bitcoin. I still think its a neat technology with some interesting use cases. I’ve enjoyed watching it evolve and grow so far and I’m excited to by the belief that there is some potential for interesting things to come from that space in the future, especially if they support a more decentralized, anonymous, and democratic internet in the future.
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Then some massive org like the NSA creates/captures 51% of the nodes and takes everyone’s money overnight.
Setting the difficulty to use mode power level now below 50% the earth is saved
For anyone who’s interested, Holochain solves this problem while fulfilling the decentralization promises of Blockchain.
Do we have a buttcoin on Lemmy? We need a buttcoin
How old is the one on Reddit?
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This is revolutionary
This is de-evolutionary!
…and, hear me out, that will be perfect for keeping messages untraceable by the government. Every single of those 200,000 computers will have full copies of all the messages ever transmitted, unencrypted, but they’ll never be able to tell who wrote them and who they were for.
Crypto =/= blockchain.
If you can’t see the utility of blockchain with regards to things like actual, verifiable digital ownership, then I don’t know what to tell you.
I want to see what you mean in practical terms, because the only other example besides questionable crypto currencies is NFTs and that was an epic lesson on what not to do. 😅
There are other uses. Like making a system that is interconnected and resistant to hacking. For example an interconnected traffic light system that can prioritize transit/emergency vehicles could be managed by a block chain to ensure the system stays in sync with itself for traffic flow/prioirty while being resistant to hacking or malicious activity.
This is a classic solution in search of a problem. The problem with stop lights isn’t that corporations control them, the problem with stop lights is that the general population thinks that cars are the only way to get around and demand that city officials optimize street and roads for cars. Adding a bunch of crazy verification steps will not solve this problem.
This is another social problem that technology just can’t solve.
How does adding more computers, more points of failure, make infrastructure less prone to exploitation?
Because it’s a trustless system. In order to override the system you have to take over 50% of the nodes, and in large enough systems it’s infeasible to get that much compute power. This means that no one person or organization can actually control the destiny of the system, only the consensus can.
I can’t believe that here, in the fediverse of all places, we need to have a discussion about the benefits of having a system that corporations can’t control.
It’s almost like different types of systems have different requirements, and a communication platform benefits from decentralization, where traffic lights and vehicle routing does not.
Ok explain to me the advantages of a decentralized traffic light system that controls public traffic on public streets?
What advantages does a blockchain traffic light system have over a centralized server controlled by those who are responsible for maintaining the physical hardware?
Nah that one makes perfect sense to be centralized. I’m saying in general you’d want a system to be decentralized if you want it trustless.
Who controls the streetlight blockchain in your idea? You think the government is going to responsibly manage a system that is large enough to be impractical to alter? My local government is barely responsibly enough to manage basic utility maintenance, we’ve had 3 water main bursts in a month and it hasn’t even been below freezing that whole time.
I can’t believe a human being living in the world doesn’t see that any implementation of a secure blockchain requires massive funding for infrastructure. That money comes from 1 of 2 places, illegal enterprises that maintain control for security and manipulation, and legal corporations that will maintain control for financial security and manipulation. Modern governments don’t run projects like this anymore, they contract them out to corporations.
Keep in mind that the only practical use of blockchain that anyone has found so far, has been as a currency that requires no ID. The most famous use of these currencies was by John Mccaffee, who used crypto currencies to help him evade authorities for nearly a decade. So I don’t have much faith in a technology that has only shown a benefit to criminals with so much money that cash becomes impractical. Nor do I have to remind you that wealthy private individuals have been able to manipulate crypto markets with hilarious ease, like how Musk pumped and dumped Doge Coin years ago with a single tweet and most likely made millions in private, untraceable money.
Just because something sounds cool on paper, and makes it seem like it skirts governments and corporations, doesn’t mean it works in practice. Large entities inherently have more resources, and are primed to steal new technologies for their own use, especially when implementing that technology requires huge funding for infrastructure.
Yeah I realize now I responded to a thread about traffic lights instead of systems in general. Obviously centralized systems are far superior for that.
No, NFTs do have good uses, but things like image NFTs are just a misappropriation, like SPAM is to email.
One use case, is clear, independently verifiable ownership of non-tangible things, like Intellectual Property rights. Movie rights for a book adaptation for instance moving between companies in IP sales and mergers/acquisitions.
IP rights is not a problem that needs solving. In fact, the existing legal system has ways of punishing copyright violations whereas the Blockchain does not.
Supply chain validation is also an example of the block chain “in action”. But the people that are entering the data on the Blockchain are the same people that were typing it in an email yesterday.
I used to be a fan of the technology as well but so far it hasn’t show itself to be useful. A solution in search of a problem.
I don’t know the value in a decentralized IP rights system. If the key holder gets phished, you can lose your rights to a TV series you’ve been working on. (Like Seth Greene)
He wouldn’t have lost it and had to pay back the ransom in a traditional contract. Having a contract centralized and enforced by the legal system has many perks and I can’t ever see how a decentralized rights platform can enforce itself.
No, NFTs do have good uses
I hear that now since 12 Years. Its not going to happen.
The perfect use case is tickets to live events. One entity creates one NFT for each seat or spot available and can initially sell them. The owner of that NFT (ticket) can then do whatever they want with it without the need for a third party (Ticketmaster) to scalp the shit out of any subsequent transactions.
Proof of ownership of a single ticket at the time of the event is the end goal, which is what NFTs do.
Why this hasn’t been done is pretty baffling to me.
What’s better, is if artists want to provide a subset of tickets that are not resellable they can. Those tickets will only be accepted if a single transaction has taken place.
Why this hasn’t been done is pretty baffling to me.
Because the blockchain needs an incentive. Who is going to be taking part in the blockchain if there is nothing in it for them? That’s why these tokens are often tied to crypto currencies, as mining is the incentive.
Yeah why would ticketmaster, who makes a killing having their ticket monopoly and control, develop a system where they lose control?
That’s not a perfect use case for it. That’s a central authority (venue) selling tickets to anyone who wants to buy them. But instead of using a local database and approving transfers from person to person and losing the ability to reverse transactions due to fraud, it’s hosted in the wild west of crypto.
There’s nothing stopping a venue from offering your perfect use case in a centralized system, but they outsource it to Ticketmaster (namely because Ticketmaster owns like 80% of music venues or something) so they don’t have to deal with it.
Your scenario outsources it to the block chain, who will charge gas for the transactions instead of ticketmaster charging fees.
The owner of that NFT (ticket) can then do whatever they want with it without the need for a third party (Ticketmaster) to scalp the shit out of any subsequent transactions.
How is that supposed to prevent scalping, exactly?
Proof of ownership of a single ticket at the time of the event is the end goal, which is what NFTs do.
And that’s better than physical tickets, because…?
What’s better, is if artists want to provide a subset of tickets that are not resellable they can.
That’s also already a solved problem: write a name on a ticket and validate that name with an ID.
Just responding to the “scalping” quote. It absolutely wouldn’t stop scalping, what I HOPE op was trying to say was that it could be used to prevent Ticketmaster, or any entity like it, from charging fees on every exchange of said ticket.
Would it? Or would Ticketmaster just buy all the NFTs and then have even less regulation on their scalping?
And that’s better than physical tickets, because…?
paper tickets are relatively easy to counterfeit, especially for the purposes of selling the counterfeits as scalped/unwanted tickets.
Again: that’s a solved problem with holograms.
The sounds like scalpers paradise. They can buy multiple tickets and sell it without thinking about any authorization (id card or something) when using that tickets
Duranium-on-the-Mohs-scale hard pass. Tickets work fine.
What’s baffling to me is the ramping up of the 21st century penchant for mindless wheel-re-inventing.
That is an absolutely TERRIBLE use case because it is by definition centralized. The venue already has ample control over who tf gets in and there is little problem with counterfeit tickets.
Without really having an opinion on the matter - I think there’s a difference in having a use and being adopted.
Something can be absolutely awesome in theory but useless if no one is using it.
That just sounds like you’re describing me.
Yeah I think a lot of people don’t understand that “good for x problem”, “better than existing solution”, and “switching to this solution is better than staying with the existing solution” are three vastly different things
Blockchain fails because switching to it is consistently worse than sticking with current solutions, and often it fails at being better than current solutions in the abstract
"Intellectual Property[sic]" is dishonest loaded language, but yes, I agree with you that blockchain could be a good way for a copyright holder to prove their monopoly. 'Course, that’s also what registering your copyright with the Library of Congress is for, so…
One use case, is clear, independently verifiable ownership of non-tangible things, like Intellectual Property rights.
Why is your system better than the existing one?
I thought of that problem the moment when they started explaining their use case. I had no idea there is a name for it, kinda cool. If the blockchain people have a real solution for it, it would be a pretty big deal
It’s a term from copyright. The First Owner of a work is usually the person who makes a work, and they can then do all sorts of things with that.
And it’s ALWAYS the same problem. You can have all the lists you want. A central authority has to recognize and enforce that list. At which point, the structure of your list is completely irrelevant. It could be ANY list. What matters is that it’s chosen to be enforced. And currently, most power structures are happy with plain old databases. Or pen and paper.
A plain old database also has ways of dealing with theft.
If someone steals your crypto keys and sends your assets to themselves, they have no legal ownership over those assets but they’re listed as the owner in the blockchain, so blockchain isn’t even any good at being an accurate, verifiable record of ownership.
Yes, you can’t make changes to the blockchain, but that also means you can never fix anything. So you actually can’t rely on the blockchain to be accurate.
An NFT is a deed. Do you see any uses for a deed that is not in control of a central authority?
Maybe it would be a good thing for the digital world to be free from the concept of ownership.
”Digital property is theft, comrade”
Reminds me of a device I heard about that just copies a music file and then deletes the copy and counts how many times that file has been copied as a commentary on the dialogue surrounding piracy
In which cases is this actually useful, as opposed to having a centralized database? Blockchain doesn’t provide the enforcement of ownership, which is the real problem.
A blockchain is only as secure as the amount of work (= processing power) that goes into it. Anyone with 51% of the processing power invested in a blockchain can attack it and essentially steal from other people. For cryptocurrencies it’s a problem that solves itself, because every person that possesses some of the cryptocurrency is incentivized to mine to keep it secure (and to earn some at the same time). The more your cryptocurrency is valuable, the more people will want to mine it and the more secure it will be.
For anything other than cryptocurrencies, you can’t incentivize a huge number of people to commit computing power to secure your blockchain. So you have to protect it some other way, for example only allowing you and some trusted people to write on it. But then it doesn’t really need to be a blockchain anymore, just a write-only database (which will perform better and occupy less space).
If it requires no work to generate a block at the end of your blockchain, any attacker can generate malicious ones.
Digital ownership on one (1) blockchain. Not really that great when you put it like that. What makes one Blockchain more authoritative than another? Even in a closed system, if you think the admins of these chains don’t keep a kill switch in their back pocket specifically for their advantage in ownership conflicts then you should probably read about Ethereum Classic. Even if they don’t want to hard fork, if a chain is controlled entirely by a company, then they can edit it however they want regardless since it’s not really decentralized. The idea that Blockchains will empower the customer with digital ownership is silly to me.
Is a chain is controlled by a single entity then it’s not a blockchain, it’s a linked list with extra steps.
The whole point of a blockchain is that it’s independently verifiable/validated by all its users. Anything else is a literal scam.
A Blockchain is already just a linked list with extra steps.
Well, a blockchain is a linked list with extra steps. Only having 1 entity just means it is centralized, not decentralized.
You’ve almost put all the pieces together. A decentralised linked list is … ? oh wait
A decentrailized linked list.
You were supposed to have the eureka moment where you realise that’s not a thing, oh well.
Who do you think controls ETC? IOHK? It’s an open-source project.
It had some 51% attacks a few years ago, is that what you are referring to?
I’m honestly just curious what you mean
No, I’m referring to how ETC came about as the result of a huge scam that caused the whole Ethereum project to be forked. The original Ethereum was supposed to be immutable, but this conflict clearly showed that wasn’t true, and there were still people pulling the strings who were too big to fail.
Not anything new to someone who’s very familiar with the project, but emblematic of the promise of crypto vs the actual product.
Then I guess you misunderstand that the hard fork resulting from the DAO hack was the result of consensus of the network participants, not a unilateral action taken by the Ethereum foundation. Indeed, the protocol facilitated that’s the only way it could happen.
The historic source code is still hosted, if you think ETH devs have the ability to ‘edit whatever they want’ then you should be able to point to the lines of code where that ability is afforded to them. Or someone should, 8 years should have been enough time to have a flick through.
Your anti-ETH comment came across as an anti-ETC comment to me, that’s why I responded. I stand with you in disagreement with the 2016 hard fork. Mostly because many people would lose money anyway, and did. ETH corrected 50+%.
ETC is literally the original chain, sans Ethereum foundation’s branding (which is why your reference to it confused me). Founding members left and continued to support ETC, and went on to found other foundations with a basis in academic rigor, which formed the fundamental basis of the ideological disagreement between participants.
You said this showed ETH/ETC devs have a ‘kill switch in their back pocket’, but the part of Ethereum that was ‘killed’ is alive and much larger than it was in 2016.
My point wasn’t for or against any particular chain. It was just pointing out that crypto isn’t really immutable when applied to real use cases, and is only as decentralized and democratic as power brokers in the space want it to be.
I’m pointing out that the DAO hack transactions are not muted on ETC, they still exist as transactions in a validated block on that chain. Whether its state of mutability exists in binary or on a spectrum, ETC is shown to be immutable using your criteria, further showing that it’s not as simple as “crypto isn’t really immutable”. Different chains, even directly originating from the same project, have different characteristics with respect to mutability. It’s not to say that ETH is worse and/or better than ETC, or that either of them are good, it’s just what’s been observed as a matter of record, contrary to your depiction
My point is that in a mass-adoption scenario where blockchains are controlled by large entities, they will absolutely use these characteristics to their advantage, and because of how crypto is structured it will be much more oppressive and favored towards existing powers than more traditional methods that allow for greater flexibility and a more diverse set of use cases. That’s why some of the biggest holders of crypto are the same corporations that caused the '08 subprime loan crash.
IMO, blockchain technology is good for one use case: illegal transactions.
I think all else can be achieved more efficiently by using a trusted third party write-only database, such as the ones available on AWS, and you’d also have the benefit of being able to go to court to seek relief. Some blockchain markets are basically reinventing banking systems and preexisting financial law - systems that have been built over centuries and have quite a bit of knowledge baked in.
I do like the shift to proof of stake from proof of work, but this tech is silly to me.
Proof of stake, while better for the environment compared to electricity-guzzling proof of work, actually shift the power of consensus to capital owners. In proof of work, any bloke with some computing power can participate in the swarm even if they don’t own any crypto. In proof of stake, only those who own some crypto can participate in the swarm, and those who own more have more say.
You can say that proof of works also requires capital to buy computing power, but with the shift to proof of stake, the bar to participate has been raised. If can’t just use a spare computer to join now, you actually need some capital to buy some stake before you can participate. It’s a big boy club now, a tool to help the rich get richer.
To add: mining profits are minimized with difficulty adjustment, but there’s no such mechanism with staking - profits are maximized instead.
IMO, blockchain technology is good for one use case: illegal transactions.
If the friction of translating your fiat money into cryptocurrencies and back is low enough it can be a very good method for collecting digital donations. Potentially no fees to send/receive money, no real national restrictions to speak of and then its stored as a value that the recipient can use however they want, plus donors can trace where the money goes if the person they donated to then turns around and donates a portion to another person receiving donations on the blockchain.
Basically the exact same benefits as the use case of illegal transactions, but at least for good rather than usually-not-good
IMO, blockchain technology is good for one use case: illegal transactions.
YES!!!
The only thing you’re not getting quite right is what it means to be “illegal” and whether the groups making this decision have anyone’s interest in mind except their own.
When doing right is or becomes illegal because our country is run by a fascist, that “illegal” money will save lives.
I know of one use case that seems viable, there is a digital housing market service in my country (called Dias). It uses blockchain to verify transactions related to selling and buying houses. That includes proof of sales, ownership, bank transaction status etc. The blockchain is operated by all the major banks. Their incentive is that it increases the security of the transactions thanks to the immutable digital trail, and also the fact that no single entity owns the “database” so no entity can alter it, or skim service fees etc from the others.
But if you have any conflict with it, you have to get a lawyer involved right? It doesn’t seem like it provides value to a real estate transaction, just seems like a use case for block chain
It’s no surprise you don’t know what to tell us. It’s hard to get a mark to buy into a scam once they’ve realized what is was.
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How about first we see a version that isn’t a scam? We’ve seen plenty of scam versions so far.
Imagine if you will… the dollar (cash) was invented today, up until now all there was was long-established crypto currency.
Suddenly there’s all sorts of scams where crooks trick people out of their dollars. Others are getting straight robbed and have no recourse to get their cash back. Cops often don’t believe you as you have little evidence of the $1000 you just had. Yet others are getting scammed by “banks” that disappear soon after accepting deposits as there is no state regulation.
What you’re seeing is not a problem inherent in crypto-currency or blockchains, it’s a new tool. Many new tools are used most effectively by “the bad guys” first. Even look at Mp3s, the first 5 years of their existence their purpose was basically to rob record companies. Are mp3s a scam?
Don’t let banks and authorities convince you that one of the most effective weapons against them is a scam against you. You don’t think the banks are telling you the truth… this time… right?
I’m looking at the current evidence, not “what banks are telling me”.
the problem that bitcoin “solves” is mathematically unsolvable. The only reason it kind of works is because participants are human, and therefore are able to assign arbitrary value to the currency, and therefore can act greedily to try to maximize (and protect) their coins. Participants are only incentivized to participate in mining because the thing they’re rewarded with is a “currency” (something they value, as humans).
For anything but a currency, what is the incentive of miners using their resources to handle your transactions?
actual, verifiable digital ownership… using a distributed database technology that is designed to require a massive amount of computing resources to update.
I think where some of us who work in spaces using databases to verify something in critical business processes get stuck in accepting that blockchain has value is that our jobs have always been to verify “ownership” as quickly and efficiently as possible. We typically do this by defining a canonical source of truth and our success is judged on how many milliseconds transactions take and the datacener or cloud costs.
Saying that everything about blockchain is “dumb” isn’t a very nuanced analysis… but it’s a understandable reaction to hearing the hype that blockchain is going to change everything for years.
I’ve never seen anyone argue that the massively distributed nature or the public read access of blockchain technologies aren’t interesting. It’s the tradeoff that has to be made in speed and costs that make it hard for many of us to see any value in the approach for most applications.
The real charlatans were the “the technology has promise” people. No, the technology was dumb.
He says on a decentralized platform that became popular because the centralized equivalent became hostile towards their users.
I don’t think Lemmy counts as popular yet.
“Blockchain” and “decentralised” are not interchangeable words
Yes, in the same way that federated and decentralized aren’t interchangeable.
You’re dodging the point that being in favour of decentralising doesn’t mean being a blockchain bro
So are you pushing a non-blockchain based decentralised ledger solution then, or did the point they were dodging actually just go over your head?
I’m not pushing anything, but yeah, anything other than blockchain
Well, it’s been about 15 years, and everything else we’ve found so far has been shitter. So just, give up on decentralisation I guess?
If you want a trustless system, you have to sacrifice performance. At least the proof of stake blockchains like Ethereum don’t use that much energy, and you get a pretty cheap and fast transaction with layer 2 solutions on par with credit card transactions.
there’s the small issue of proof of stake being subjective…
but a bank’s opinion, that’s fact
But if you’re using layer 2 solutions, then you’re not actually using the blockchain directly, right? Might as well use credit card then?
All transactions are still eventually commited to Layer 1 though, so you’re still using the Blockchain when using L2s.
No, just the final state. And you are changing into trusting a centralised node, which makes no difference compared to existing systems
TPS metrics of the most popular blockchains
Blockchain TPS Max TPS Ethereum 13.15 57.91 Bitcoin 7.35 9.87 Algorand 6.99 221.01 Optimism 4.74 20.66 As a global payments network Visa has the capacity to execute more than 65,000 transactions per second.
Oh nice, that’s how high Solana’s TPS has gone in testing (in practice it hovers around 5-10k TPS). There’s also newer chains like Aptos that claim to be able to handle 150k TPS with subsecond finality. Of course, neither of these chains are very decentralised, but at least they aren’t fully permissioned and centralised. Especially on a network belonging to a partisan, anti-competitive, anti-trust law-breaking, Wikileaks funding thieving Israel supporters like Visa.
General question, because I don’t give a shit about blockchain to research it.
Does it have a way to quickly and effectively handle fraud? And don’t tell me “there’s no way to commit fraud” because people can steal wallet passwords no fucking problem. With most banks they will actively track fraud, cancel those transactions, and restore your funds and possibly shut down the card automatically while still allowing the account to exist so you can access your money. Is that the case with blockchain?
Yes. There are Escrow services in crypto that hold and issue chargebacks, but it is to to you if you want to use such a service.
centralized crypto exchanges also have fraud combatting teams. An example is that exchange that sponsors kitboga, the youtuber who screws around with Indian scammers. They lock scammers’ accounts from withdrawing but not depositing so they keep sending victims’ money to these accounts, and then eventually they lock the accounts and transfer the money back to the victims.
Obviously an issue with this approach is the scammers can just use decentralized wallets, but recently exchanges started blocking transactions to these too unless you provide KYC info about them, so they’re trying at least.
If you do things right, you can be relatively safe from fraud and scams, but most people won’t do things the right way.
It depends on whether you’re interacting with the blockchain directly, or via a custodial solution more appropriate for end consumers. Same like how you don’t get a refund if you operate a western union branch and fuck up the wire.
And of course we can rest assured that nobody profiting off bitcoin is morally questionable
Ah yes, Bitcoin bad because some people that use it are bad, how did I never think of that
I’m not saying that, rather I’m saying that I don’t see how either thing is clearly morally superior.
Bitcoin is open-source software, a network of nodes running Bitcoin core, the source code for which you can find here: https://github.com/bitcoin/bitcoin
Morals are a consequence of free will, which Bitcoin does not have. There are valid moralistic concerns about Bitcoin, but they are related to the impact of Bitcoin, rather than whether it is a moral system.
13.15 is the average number of transactions per second. Max TPS (57.91) is the largest recorded TPS, not the capacity of the blockchain. Max TPS will rise as more people use layer 2. Layer 2 solutions can handle 2,000-4,000 TPS, and there are 24 commonly known ones that can do these transactions in parallel.
Yes but 65000 TPS for Bitcoin would likely have the planet glowing much brighter in the infrared… possibly even the visible, for all the heat we’d need to dump.
A rich, warm, and sterilized world!
I’m personally advocating for Ethereum which is Proof of Stake and uses a fraction of the energy Bitcoin does.
However, correct me if I’m wrong here because I’m not that much invested in bitcoin as a tech or investment, but isn’t almost half of the energy used on bitcoin generated from renewables? I could swear I saw an article about it somewhere.
Although nowadays people seem busy heating up the world telling AI to cheat on their homework, so I wonder if this is a problem with society rather than technology.
It may very well be renewable. I’m really more referring to the inefficient way in which the sums are calculated. Those data centers get warmish.
And yeah, AI is just the next thing we decided to punish our GPUs with. Crazy how we’ve used that part of the computer these last few decades…
I’m more engaged in a chat gpt session that I am staying up till 4 am watching line graphs of crypto prices, guilty as charged 😁. Not sure what comment it makes about society other than “we seem pretty lonely, everything ok?”
That’s just proof of work chains like bitcoin. Ethereum doesn’t have intense calculations and nodes instead use their staked money as liability to offer proof of transactions.
However, correct me if I’m wrong here because I’m not that much invested in bitcoin as a tech or investment, but isn’t almost half of the energy used on bitcoin generated from renewables? I could swear I saw an article about it somewhere.
It’s still wasted energy. If it wasn’t used on bitcoins, it would have been used on other things - some of which had to be powered by fossil fuels.
Without bitcoin, the renewable energy plants wouldn’t have been built.
We don’t have a shortage of electricity in the world, we just don’t have enough incentive to make it renewable.
How does that even make sense? Renewable is cheaper than burning petrol, of course there’s a shortage.
Isn’t that still an order of magnitude less than what Visa can do? Or is there some extra math involved that I don’t know about
I think it depends on the layer 2 solution, but as far as I understand, each of these layer 2 solutions independently have 2000-4000 as theoretical max, and only after bulking transactions together do they affect layer 1, so you should be able to add all layer 2 together for the total.
I guess the spatial sharding update will further increase the maximum number of transactions you can bulk by a factor or two so an individual layer 2 solution becomes comparable with visa, but I don’t think that update is coming to Ethereum in several years. Then again, Ethereum needing to perform 60,000 TPS is likely not happening this decade either.
For now at least, layer 2 is fast and cheap, although a bit difficult to use.
Where are you getting the TPS report for the Lightning Network? I thought its theoretical max TPS was in the millions.
Sure, but what real-world problem does a trustless solve? I thought this was all very interesting years ago but now that we’ve had blockchain for years it seems it’s only good for illegal or morally questionable transactions.
Would you trust your money with a bank in China? It was only a year ago that people lost their savings and couldn’t withdraw money for food after a major bank was on the brink of bankruptcy due to the Evergrande scheme.
I guess you can call it questionable, but if I buy a VPN, I’m not going to pay with a credit card linked to my name. I use Monero. If I want to transfer money to my family in another country, crypto is faster, cheaper, and has no restrictions. I can’t even pay my student loans from my home country because my current bank blocks foreign credit card transactions, even if they are important.
This is very niche and not something an average Joe needs, but cryptocurrency isn’t for the average Joe to begin with.
How would using blockchain fix the liquidity of a bank?
See I think more nuanced takes like this are good. I’m not familiar with the Chinese banking issue that you are describing, but it sounds like deposit insurance (like the FDIC) might be a better solution than cryptocurrency, and it’s definitely better understood. Since the real world value of cryptocurrencies are so volatile they are a questionable store of value, and taking a risk on a poorly regulated bank might be better than taking a risk on storing your money in a volatile and unregulated security like cryptocurrency. Honestly it’s hard to know which is the better risk. So it could be better or it could be worse.
I agree with your point about transferring money internationally, and even within the US transferring money used to be a real pain. So I’m still interested to see if cryptocurrency can be a better medium of exchange or medium of transfer than traditional ways, or at least give traditional systems incentive to improve. But again the volatility is a concern so for most people the best move is probably to get in and out of the crypto market as quickly as possible or else risk getting a vastly different amount of money out of it than you put in. Admittedly it could appreciate, but when I’m transferring money to someone I don’t want that to simultaneously be an investment. The few times I have used Bitcoin to purchase something the whole process has taken hours, and there’s no guarantee there will be price swings a lot could happen in those hours.
I appreciate the brutal honesty about cryptocurrency not being for the average Joe. It’s not that long since many cryptocurrency boosters were hoping it would replace fiat currency, but now that I think about it I haven’t heard as much about that recently. In its current state it is really not for the average Joe.
Since the real world value of cryptocurrencies are so volatile they are a questionable store of value
It will not be so volatile if it’s primary means of transaction for everyone(obviously not yet). Value of thoose cryptos are just like the values of normal money in different countries.
For example, if you can buy an apple for 10 shitcoins, instead of buying it in USD, then the value is not volatile. The problem arises when the apple is 5 USD and you have to transfer the shitcoin amount which is equal to the exchange rate of 5USD at that time.
This is true, but it’s hard to see why we would ever move from fiat currency to cryptocurrency as the primary means of exchange. Currently cryptocurrency’s advantages are modest and its disadvantages are substantial, and I haven’t seen a lot of movement toward fixing that balance. I’d like to give traditional finance channels some competition to reduce fees, lock-in, and inconvenience, but cryptocurrency is going to have to get a lot better for average people if it’s going to be a real alternative.
Advantages of cryptos is that they are decentralised. Just like lemmy is decentralised, no single entity or government control the money. Transaction happen from peer to peer. No middlemen involved. I don’t understand the disadvantages yet except environmental concerns. I heard coins like ethereum switched to proof of stake model which is more environmental friendly.
I don’t understand the disadvantages yet except environmental concerns.
As you point out, PoS basically solves the environmental concerns. (Some people might say it still consumes too much power but I disagree, I think power consumption under PoS is acceptable).
This is just my opinion, but I think the big disadvantage is cryptocurrencies are a pain in the ass to use. Lengthy story about what a pain it’s been to use them in Spoiler tag. I think this story is a bit of an outlier since I hit all of these issues, but the fact that a technically inclined person who is just getting back into cryptocurrency after a long hiatus can have this much trouble with it does not speak well use ability or safety.
::: I have a few coins I mined back in the day (before switching all my computing power to BOINC), and I saved off my wallet.dat from those wallets. I wanted to use them recently, so I reinstalled the wallet software. That worked, but then I had to download the entire chain again, so I had to wait more than a day to actually use the coins. Putting cash in a bank is faster if I’m already a customer of the bank. If I’m a new customer I might have to wait, but the point is cryptocurrency doesn’t have a clear advantage here.
The coins I had weren’t Bitcoin, but the shop I wanted to buy from only accepts Bitcoin. So then I had to exchange mine for Bitcoin and pay transaction fees. I guess you could say it’s my own fault for holding a less-popular coin but I’m not sure cryptocurrency is living up to its own hype if there’s exactly one or two coins that you have to use, just like how in the US there’s no real alternative to USD.
I found a no-account exchange, and I had to carefully enter keys and figure out amounts of coin > BTC. And I had to trust the exchange to give me what I wanted. If the no-account exchange didn’t exist, I would have to create a whole new account on a website I don’t entirely trust just to exchange one coin for Bitcoin. That’s a layer of trust in a “trustless” system. I also don’t like creating yet another account with my info in it — yet another way that cryptocurrency is not better than traditional finance.
Then not only did it cost transaction fees, it took hours for the transaction to go through. I could pay more for it to go faster, but now we’re talking about fees that far exceed those of credit cards or regular money transfers. Then I had to send the Bitcoin to the online store and wait for that transaction to clear. More time and more transaction fees. The purchase worked without a hitch, but it wasn’t any better than using a credit card.
I had to buy extra BTC because it’s really difficult to know exactly how much you’re going to pay including transaction fees, so after the transaction went through I tried to turn my remaining Bitcoins (I think it was worth ~$13?) back into the kind of coins I keep, but I set my transaction fee too low and the trade I set up expired before my coins went through. Luckily I had given the exchange a refund account, but that meant I had to wait over 24 hours before my transaction actually happened, and then the exchange had to send back my Bitcoin, incurring fees at each step.
While waiting I tried to cancel this Bitcoin transaction, but the software I used didn’t support that. So then I tried to extract my private key to enter into another piece of software, and that was surprisingly difficult. I thought cryptocurrency was supposed to put me in control, but without a LOT of technical knowledge I was just as powerless as I’d be with a bank that froze a transfer. I asked for help on a few forums and some people tried to help but the whole thing was confusing and eventually I had to give up and just wait for the transaction to go through.
Then I had to do the BTC > mycoin transaction again, and this time I think the fees were 5-10% of the amount I was transferring. That’s way more than Venmo’s immediate transfer fee or even credit card fees (I think those are around 3%?).
I will say that during this process I discovered the Electrum wallet, which is very good and works on a lot of platforms. Some of the issues I had would not have happened if I had used that all along. But there are so many wallets out there it’s hard to know which one is best and obviously when I started this process no one told me it was the best. And maybe it’s not and that just my opinion.
In summary, I’m interested in cryptocurrency and kind of enjoyed using it in the way learning new things can be fun. But it was slower, less convenient, and more expensive than regular currency. Cryptocurrency boosters are going to have to improve all of these problems before it’s competitive with regular currency, and I don’t see a lot of discussion about how much these pain points suck and how to improve.
:::
Legal money transfers are not a use case. Crypto is simply much more expensive to maintain. All these mining rigs and all that electricity must be paid for.
If it seemed cheaper, then either:
- the banks were charging inflated fees. That can be fixed only once. (And it should have been fixed by government).
- It was masked by price fluctuations. Eventually, someone else must pick up the tab. Can’t work long-term.
- Costly regulations/taxes were dodged.
Under the spoiler is something I wrote recently to explain how crypto is not like stocks.
spoiler
Let’s look at how stocks get their value.
A company sells shares to get funding. Say, you want to make microwave dinners. You need to hire people, an industrial kitchen, packaging and packaging machines, ingredients, and probably a whole lot more. The company takes in revenue from selling the dinners, which pay for the running costs. Anything above that may be reinvested or turns into profit. The profit is paid to the stock-owners to pay them for their investment.
Now the question is: What is the value of a stock?
Imagine you take out a loan. That gives you money right now, in the present. You pay back the loan with the money that you get from your stocks; your share in the profit. Now imagine that the company goes out of business (and the value of the stock becomes $0) right as you are done paying back the loan + interest. Then that loan was the present value of the stock.
In theory, the value of a share is the present value of the future money that you get paid. Of course, one cannot know how much that is, so this is useless for actual investing. Still, the market price of a share should be the best guess of people with money. If the stock is trading higher than someone’s guess, they sell. If it’s lower, they buy. So the market cap should reflect the future profits.
But what’s the value of a crypto-coin like bitcoin?
Let’s start by thinking only about a coin being used to transfer money. And to make it easier, let’s say that coins are only exchanged for money once a day.
Say people want to transfer 10 million USD each day. The senders buy coins for 10 million USD. They don’t care how many coins that gets them, only that the coins represent 10 million USD. If there are 2 million coins being sold on the market, then each coin must transport 5 USD and that will be the market value.
New coins are constantly being “mined” to pay for the upkeep of the system. Let’s say that’s 100,000 coins per day.
The intended receivers of the 10 million USD sell their coins to get the money. The miners also sell their coins to pay their bills. So the next day you have 2 million + 100,000 coins on the market. The senders again want to transport 10 million USD, so they buy the 2,100,000 coins on the market. The market value of a coin is now ~4.76 USD. Adding more coins lowered the value of the coins. That is inflation. The “missing” money goes to the miners to keep the system running. That’s not a problem for senders and receivers. Transferring money costs money, however you do it. (That crypto is an extremely expensive way to do this, is one underlying reason why it has no adoption as a payment system in the normal economy.)
So far, you wouldn’t expect anyone to store or “hodl” coins. The value is just going down. But obviously, this is only true as long as the amount of USD to be transferred stays constant. If the system is more widely adopted and more money is transferred (outpacing the inflationary effect of the newly mined coins), then each coin has to transport more USD and the “value” goes up.
Now, if you believe that adoption continues to grow, it becomes a reasonable strategy to stash some coins to sell them later at a higher “value”. Maybe the problem is already obvious, but let’s continue to take it slow.
So, let’s say, it’s a bit later. There are 15 million coins and they are to transfer 100 million USD. The market price of a coin is now $6.67. (Let’s also say that there are no more coins being mined and the upkeep is paid some other way.) Now we bring in some venture capitalists. One day, they buy coins for an additional $50 million. Now the coins trade at $10 per coin. 15 million coins bought for $100 million + $50 million, right?
The VCs now have 5 million coins. But note where the money went. It went to the transfer receivers when they sold the 15 million coins for $10 each. They got a windfall profit. That’s how it goes in crypto. All the money that people “invested” by buying coins is gone. It was either used to pay miners/for the system upkeep, or early adopters took it and ran. It’s all gone. That’s the big difference to shares.
If the VCs sell their coins again, they lose. Because when there is only 100 million USD in the market for 15 million coins, they would only get 6.67 USD per coin. The money that they spent is gone. If they want to make a profit, new money has to come from somewhere. There are only 2 ways to achieve this.
One is continuing adoption. If more money were to be transferred, with the same number of coins, the price goes up. They can siphon off some of that money by selling into that market. But that lowers the price again, so that only yields a profit if adoption increases enough.
The other is that someone else also removes coins from the market. If there are fewer coins for the same (or a decreasing!) amount of money being transferred, then the market price will also go up. (In this scenario, too, they would be siphoning off money that other people are trying to transfer. The cost of transferring money would be increased for no very good reason; not a great feature in a payment system.) But note that this, too, lowers the price again. That only yields a profit, if “hodlers” sequester the coins sold by the VCs for a higher price than the VCs paid.
I’m not saying this is a Ponzi scheme because everyone has heard that already.
So that’s it. If you want to know the effect of 50k bitcoin on price, you need to look at the trading volume (minus wash trades): How many bitcoin are actually “in use”? You also need to know how many of these coins will be promptly removed from the market by “hodlers”.
Legal money transfers are not a use case. Crypto is simply much more expensive to maintain. All these mining rigs and all that electricity must be paid for.
Various currencies are moving away from the proof-of-work model, FWIW. Ethereum was mentioned in this comment chain as one of them.
Which doesn’t solve the economic problem. (Good for the environment, though)
Ethereum has proof of stake. That means someone has to deposit Ethereum, tying it up. It could be exchanged for money and invested in stocks or bonds, yielding a return. This is only economically feasible if the stake yields the same return as a comparable investment. This profit has to come from the users.
A competing payment system, based on sensible, modern technology also needs computers and the internet but not a stake. It must be cheaper.
The stake is supposed to keep people honest, because it can be taken if fraud is detected. Normally, fraud is dealt with by putting the perpetrators in jail. Being known by name is proof of stake.
Users have to pay extra just so that some kingpins in the back can remain anonymous. Do you want to for that?
It also doesn’t solve the other deal-breaker (in the spoiler). Whenever you transfer money through crypto, you risk that some “investor” siphons off some of it.
Trusting Humans is literally a security flaw. Any system with trust you can find examples with fraud and abuse from those who held power by holding that trust.
We trusted bankers to invest our money, and some short sold the housing market with that money
I could go on, but trust really is a security issue. Decentralization has its efficiency issues, but saying “Bitcoin uses as much power as the 90th largest nation” is peanuts when you consider the energy inequality that America spends and compare what Bitcoin delivers with that energy versus how much energy centralized banks need to deliver a system that’s easier to fraud
Ah yes Bitcoin, famously free of fraud and abuse.
More seriously, every system can be used for fraud. The question is whether the solution is actually better overall. We could prevent all wire fraud by returning to a cash-only economy. But that would be hugely inconvenient and therefore create a huge drag on the economy compared to a world where we can do electronic transfers even though electronic transfers open us up to wire fraud. Returning to cash-only is not worth the increase in security, and it opens us up to other issues (e.g., bank runs and someone stealing all the money under my mattress).
And while power use is a problem with Proof of Work coins, it’s not my biggest concern about cryptocurrency because Proof of Stake can fix that issue. It’s a shame that the biggest coin now is PoW but hopefully that will change. The bigger issue is “is cryptocurrency better than traditional currency?” So far it hasn’t proven to be better except in extremely limited circumstances. And a lot of the ways cryptocurrency is better will go away if governments start regulating it like other forms of finance. Having your money in cryptocurrency won’t protect you from the police and courts.
We trusted bankers to invest our money, and some short sold the housing market with that money
Okay? You could do that with cryptocurrency if traders started accepting cryptocurrency for shorts. The only reason you can’t do that today is traders won’t accept cryptocurrency for shorts, and that’s basically security through obscurity.
Sure, drugs and fraud surround Bitcoin, but drugs, fraud, and banking imperialism surround the petrodollar
I didn’t say cryptocurrency was any better or worse for fraud and abuse than regular currencies. Honestly I have no idea which one is better or worse for fraud and abuse. I’m just saying it’s not clear that the particular way that cryptocurrency is more secure than regular banking is actually beneficial.
Trusting Humans is literally a security flaw.
Exactly, and using Bitcoin does not solve that because you still have to transact with humans. If you buy something with Bitcoin and the seller never sends you anything, you’re out of luck. Your money is gone.
If you use a regulated financial system you have some options. If you paid with credit card you can charge back and dispute the charge. Your money in the bank is backed by insurance that is guaranteed by the government.
Bitcoin only cuts out the middleman. Every other issue of trust with the recipient still exists, and those are the problems regulation solves, and the reason fraudsters love Bitcoin so much.
Amen, exactly.
With all the information available at your fingertips being ignorant is a choice.
“this parallel financial system can also serve a tangible social good, offering an onramp to the financial system for people who would otherwise be left out. In countries where the vast majority of the population is unbanked, national currencies are no longer a safe store of value, remittances comprise a hefty portion of GDP, and international sanctions complicate connections to the global economy, a virtual currency that doesn’t require an intermediary to approve transactions can be a vital lifeline for survival”
Bitcoin is poised to blow up Africa’s $86 billion banking system
This isn’t Reddit, you don’t have to turn every discussion into a fight. I’m genuinely interested in cryptocurrency for reasons such as the article you linked: there are areas where traditional finance genuinely has failed to meet people’s needs. Providing a medium of exchange for the unbanked is a great example of something it could possibly help with, and I think that’s a good thing if it happens. But we should also be able to talk about the problems with cryptocurrencies and the cases where it doesn’t work as well as traditional finance. And if this prediction doesn’t pan out and cryptocurrency doesn’t become a major way of banking the unbanked, we should be able to consider what could accomplish that goal. It might be a different cryptocurrency, or a new thing inspired by cryptocurrency, or something that has nothing to do with cryptocurrency. After all, cryptocurrency is not a goal in itself.
I’ve never been in Reddit so I can’t talk about it but I wouldn’t have been so harsh if you hadn’t already stated that it seems only useful for illegal and immoral activities when it’s so easy to find, if you are “genuinely interested”, that it’s not the case.
Also, the unbanked.
Also, privacy and anonymity (to an extent).
Also, complete predictability in the system (its at least domain constrained).
There’s no privacy, it’s an open ledger, only anonymity
It’s a bad way of hiding money if you’re about to be investigated for crime
Monero seems to be holding up in terms of privacy.
the unbanked
Can the unbanked still benefits from crypto these days though? How can you cash your crypto without doing KYC? Even localbitcoin got folded due to increased regulation. If you can pass KYC, then you’re probably not the unbanked. Less and less business accept crypto these days, it’s hard purchase daily necessities without cashing out your crypto (except probably in venezuela).
except probably in venezuela
I mean thats really what I’m talking about. Africa, Central and South America, I know they benefit substantially from technology, because local banks can be so unreliable.
An older article, but relevant:
Thanks for your input, dingdong.
Bingo. Capitalism has thus far rejected the blockchain, which is generally evidence that it doesn’t solve an important problem either efficiently, safely or cheaply.
To be fair, there are plenty of other reasons capitalism might have rejected blockchain: market failure, interference by government, etc.
I’m not saying that to defend cryptocurrency, by the way, but rather to point out that capitalism isn’t perfect at allocating resources in every situation.
Isn’t one of its goals to be free from government influence? That’s not a valid excuse.
Blockchain is just a technology. It doesn’t have “goals.”
If a government explicitly blocks it and tries to find and punish trading off or in cryptocurrencies that will cause interference.
that is talking about blockchain as a technology for cryptocurrencies.
capitalism is generally terrible at allocating ressources. It will always win to externalize costs, and if the people footing the bill cannot participate in the market, like for instance future generations, the result is always a self destructive system.
Bitcoin had its official ETF approved and started the other week and Ethereum is soon to follow. so I would say capitalism is very much not rejecting blockchain technology. Didn’t blackrock and other giants put a ton in?
Bitcoin had its official ETF approved and started the other week and Ethereum is soon to follow. so I would say capitalism is very much not rejecting blockchain technology. Didn’t blackrock and other giants put a ton in?
Right?
Also, look at its price. It dipped, and came right back.
If anything, the financial consensus around this is exactly the opposite of what was being presented.
They put money in Bitcoin, but not the tech behind it. To them it’s just stocks to be manipulated in order to get a profit.
Capitalism rejects solutions to climate change as well
I was hoping it would help me save on international transfer fees when I was an overseas postdoc, but it would have actually cost more between the exchange fees and my time setting up all the exchanges in various countries, meanwhile also introducing risk in me being robbed of said money and screwing something up and introducing myself to some sort of tax liability. Needless to say, I continued to just pay for the bank transfers
It is less than a dollar
That’s really the thing, isn’t it? In my experience cryptocurrency fees are quite high. I bet there’s a way to find a lower fee but then I’d have to do a ton of research and hope it’s accurate. I’d rather just pay a bank that requires me to do no research.
It cannot be cheaper, other than by avoiding taxes and regulation.
Consider sending money from US Dollar to Euro:
Sane way: An intermediary (IE a bank) handles this. You give them USD and they give the receiver Euros. This involves some service costs and 2 bank transfers.
Because people exchange money in both ways, the banks need not run out of either Euro or USD. In the background there is the currency market, on which the proper exchange rate is haggled out, which takes care of imbalances in cash flow.
Crypto way: You give a crypto exchange (an intermediary) USD and they give you crypto. This already involves 2 transfers and service costs. One of those 2 transfers is a crypto transfer, which is much more expensive (IE uses more resources) than a bank transfer.
This is already more expensive and then you have to do the same thing again to cash out.
And then we are still not done. Say there is an imbalance in that more people transfer money from USD to Euro than vice versa. That means that crypto becomes more expensive in USD and cheaper in Euro. There’s more demand in terms of USD and more supply for Euro, right?.
That creates an arbitrage opportunity. You can exchange USD for Euro, and then buy crypto for Euro to sell for USD. This closes the circle and puts everything back to the initial state. But to do that, we still have to exchange the real currencies. So now the markets bake the cost of exchanging currency into the crypto prices. At a guess, for some currencies (probably not so much Euro/USD), that would have a significant effect. I’m thinking smaller, poorer countries that send many migrant workers, who send money back home. These workers would not only end up paying the insane overhead of the crypto system, but also, still, most of the normal, direct exchange costs (if they relied on crypto).
There’s a case to be made for a currency that facilitates illegal transactions, or transactions that corporations object to. Just because something is legal in your country doesn’t mean it might not be unjustly restricted. Or could just be unjustly illegal in your country or another country. The problem of course is that distributed currency also facilitates things that should be illegal.
But WikiLeaks is a good example - their legacy is a little mixed now, but when they first came on the scene they were doing work which was a valuable service to the public. If you wanted to donate money to support wikileaks you couldn’t because the credit card processors shut them off. Blockchain lets you get around that.
Likewise it’s the combination of distance and direct - I can give $5 in cash to my local leaking consortium, but I can’t give $5 to the leaking consortium on the other side of the world without relying on the knowledge and consent of third parties.
I agree there’s something to be said for this — If you have a above-board business that credit card companies don’t want to service because they think it makes them look bad, that should not shut you out of electronic payments yet that’s basically where we are at least in the US.
This is a little hard to balance with the fact that the same things that let you circumvent gatekeepers like credit card companies also make it attractive for genuinely immoral things, but that’s a trade-off. Every currency can be used for immoral things and just because cryptocurrency might make it a little easier doesn’t mean it’s inherently immoral.
You totally can give cash anywhere in the world. You post it as a letter
This was common before electronic transfer
It is illegal to send cash by letter.
Maybe in your country
It is in most countries
On account of it being so in yours?
Australia Post says they reject any liability if you do
The UK says you should use their premium service to do so
India says you can’t. It at least quora says you can’t in India
Quora says you can in Canada
I wonder why the UK and Australian searches landed on the national postal carriers and the others landed on fora
It will also get there faster.
Mailing someone cash means you need to know their address, you have to wait however long for the mail to arrive, you can’t prove they received the cash, it’s possible the cash was stolen en route and anyone who might wish you harm like an adversary government can observe the transaction.
With crypto you face similar problems. You need an address, waiting is shortr, rugpulls and other scams are one of the biggest use cases so getting crypto stolen seems common. You might be able to verify that crypto was revceved but as with any trustless paymet solutions the issue is that getting the item you ordered is the part where trust is needed the most. Good luck asking back money when you get an empty box.
it’s only good for illegal or morally questionable transactions.
Good thing laws are always just and everyone agrees that following every law is the most important thing a human being can aspire to do in their lifetime.
^^/s
Seriously though, I’m someone that uses credit for 90% of my purchases, but I also enjoy consuming cannabis and I’m well aware how horrible it would be if it wasn’t possible to make “illegal or morally questionable transactions.”
