from Hacker News

Why All Cryptocurrency Should Die in a Fire

by oalessandr on 5/14/22, 8:56 AM with 327 comments

  • by Havoc on 5/14/22, 11:10 AM

    >help me make it die in a fire

    I'm rather mistrustful of people that are this forthy about being against a new technology. If it really is that devoid of merit it'll die on its own.

    I also think it is a rather fundamental failure to see the big picture.

    Not efficient? Well neither was the Ford model T. Newer generations are getting better.

    Similarly somehow existing systems seem to get a free pass for things that are consider fatal flaws for crypto. Criminal enterprise? What do you think all the drug trade and sundry criminals use? Seashells? No USD. Systemic risk? Fed is printing trillions and history is littered with financial crises. Humans have managed to make everything from CDOs to tulips crash. Its not unique to crypto.

    Personally I think crypto is a 50/50 chance of working long term. The people certain it'll be a disaster seem just as silly as those certain it'll take over the world.

  • by ephbit on 5/14/22, 12:58 PM

    > WEAVER: Yes. So let’s take the cost of a transaction. The cost of a transaction in cryptocurrency systemically is the amount being used to protect it. I could build a system that would have the same throughput as Bitcoin, three to seven transactions per second, but with a centralized trusted entity. In fact, not even a centralized trusted entity. Ten trusted entities, only six of which need to be honest, because I use a majority vote system. I could do it on ten computers that look like this, that would burn as much power as a light bulb.

    Okay, so Mr Weaver can conjure some "ten trusted entities" by simply wishing them into existence.

    Either he doesn't understand why one cannot simply create a "trusted entity" out of thin air .. which would mean, he's not actually an expert who anyone should listen to .. or he consciously makes a lazy attempt at formulating an argument that superficially sounds reasonable, while not having any substance.

  • by lordofgibbons on 5/14/22, 10:33 AM

    I will gladly stop using Monero if someone can tell me how to privately transact over the internet without CC companies (and others) spying on me and selling my data. Until there is a better solution, I'll keep using it.

  • by throwaway4good on 5/14/22, 10:46 AM

    I think the best criticism against crypto currency is that it is essentially “regulatory arbitrage”.

    Things are allowed inside crypto that is not allowed in the normal world of finance.

    Ie stable coins: promising people 20% on their savings account by running an obscured ponzi.

    Ie pump and dump.

    Ie insider information. Insiders on exchanges buying up coins they know are going to be listed.

    Etc etc.

    (And proof of work of course is the key enabler as it allows those who are running things to hide their identity.)

  • by coldcode on 5/14/22, 11:37 AM

    You can say the same thing about stocks, gold, bonds, commodities depending on what year you are in. Everything goes up and eventually down again. Oil futures even went below zero not that long ago, now the cash price is over $100 a barrel. I saw the crash in 1987 and yet here we are, at all time highs recently. Crypto of course has less economic meaning as it's just bits, but anything that is traded goes up and down in value, even pointless things like baseball cards. Value is whatever people will pay today for something hoping it either goes up in value or provides them with some benefit (like a house).

    Complaining that crypto is stupid is fine, but lots of things in history were stupidly valued (tulips, beanie babies, bored apes) and eventually the market did or will change. Crypto is worth whatever people will pay for it. It's not inherently evil.

  • by JonathanBeuys on 5/14/22, 11:15 AM

    The article starts out with:

    "The crypto world went into a full meltdown this week"

    I don't know. Look at a chart of Bitcoins price on a log scale:

    https://twitter.com/JonathanBeuys/status/1524810429884661761

    To me, it does not look any different then it has looked for the last 10 years. Its a slowing exponential growth with a certain volatility. Nothing seems to have changed in the last week.

  • by ddjsn111 on 5/14/22, 11:17 AM

    The world needs decentralised assets. It’s the internet of money.

    Some are shitty, some are not.

    Monero and Algorand are two good examples. The latter carbon negative.

  • by notacoward on 5/14/22, 2:36 PM

    So far I've seen three variants of the "he just doesn't understand" argument in comments, including the currently top rated comment, and the day is still young. I bet there will be more, because it has become crypto advocates' favorite tactic to negate real argument. Unfortunately, it's an appeal to (false) authority. Why should anyone believe that the crypto advocate - even without considering the taint of self interest - knows more about the subject than someone like Nick Weaver or David Rosenthal who has a decades long record of actually solving closely related problems? At best, with only a few exceptions, the advocate is a relatively new programmer in a completely different specialty. Often they're not even technical at all. Where's this authority that's supposed to override rational arguments (even if those could be countered)? At least people like those I've named don't rely on authority and take the time to provide real discussion-worthy points as well.

    This is supposed to be a rational reality-based community. There should be zero tolerance for the "just doesn't understand" trope, especially when someone doesn't even identify (let alone explain) what it is that their target doesn't understand. It's blithe dismissal, not curious conversation, and at least nominally (according to the guidelines) not what the site is supposed to be about.

  • by ogogmad on 5/14/22, 10:23 AM

    This might be a purely stylistic criticism, but it's hard to take articles seriously when they lack professionalism: "Why all cryptocurrencies should die in a fire". I can see the editor smiling and rolling his eyes when making that title. It was cute at some point, but now it's painful, and it's unprofessional.

  • by ogogmad on 5/14/22, 10:36 AM

    Blockchain cryptocurrencies rely on the economic incentives of PoW (or something similar) in order to function correctly. Has anybody modelled how the miners might behave under varied circumstances? So far, the incentives seem to be working correctly, with no double-spend attacks happening.

  • by Patrol8394 on 5/14/22, 2:04 PM

    I can move $ in less then a day and for free just using my bank. Now, try to do the same with a stable coin running on ETH … and check the fees . To me it does not feel innovation, but rather going backwards.

  • by gengiskush on 5/14/22, 11:09 AM

    If it wasn't for the "potty police" banning drugs what use would people have for cryptocurrency? But the point is people have a use for it... When the author says "should die in a fire" he really means poor people drug users. The problem in his eyes is the drug users are now rich from cryptocurrency.

  • by projektfu on 5/14/22, 1:37 PM

    The disaster has already occurred, it just hasn't been felt yet. The disaster of 2000 was not the crash of the tech stocks, it was the previous year of pouring people's savings into a fire pit. What would it have meant for the economy to keep all those companies inflated? Surely only a bigger disaster.

  • by DennisP on 5/14/22, 5:23 PM

    Most of this is old hat but there's one claim I thought was interesting and decided to check, and it's laughably wrong:

    > We’re talking [a measurable percentage] of the world’s electricity consumption, most of that has not been paid for. So the mining companies for the most part have been taking the cryptocurrency and borrowing against the cryptocurrency that they create, rather than sell it, because the market’s actually very thin.

    So supposedly, the markets are too thin to support the miners actually selling their earnings to pay their power bills. Let's check the top two against 24-hour volume on coinmarketcap:

    BTC volume: 1M BTC

    BTC issuance: 6.25 BTC every 10 minutes, or 900 BTC in 24 hours, or 0.09% of the trading volume.

    ETH volume: 8.5M ETH

    ETH issuance: 2 ETH every 15 seconds, or 11,520 ETH in 24 hours, or 0.14% of the trading volume.

    I don't think the miners have any trouble selling their earnings for fiat.

  • by kkfx on 5/14/22, 2:24 PM

    My own personal opinion on cryptos is that they are a tentative by some GAFAM to overtake banks at their own game, considering that as actual "fiat" money cryptos are "virtual values, substrate of anything" witch appear to be free but due to their mechanics are bound to network and computing power witch means to some IT-enabled subjects, so in practice as free as fiat currencies these days for their "end users", and "a bit more free" for "real owners".

    However as any "money" concept rooted on "money is the value" instead of "money is just an unit of measure of some substrate" are no more scam than actual currencies, should face the same fate anyway.

  • by charcircuit on 5/14/22, 2:17 PM

    >you cannot store cryptocurrency on an internet-connected computer. Because what will happen is, if your computer ever gets compromised, all your money gets stolen and there’s nothing you can do about it.

    This is the point of having a hardware wallet. Someone has to push a physical button in the real world to sign a transaction.

    >And [ransomware] only exists because people can pay in Bitcoin.

    The concept of ransoms predates cryptocurrency and would still exist without it.

    >And my gain is not just the difference between what I bought it for and what somebody else bought it for, but that plus the benefit of all the dividends and interest.

    Stocks aren't guaranteed to just go up. If your stocks even pay dividends that might not even cover your losses.

    >So the stock market and the bond market are a positive-sum game.

    The stock market isn't positive sum. Someone is going to be holding the bag when a company goes out of business.

    >but [Tether] does have the potential for bank runs causing collapse, because it’s unbacked.

    This is false. See https://tether.to/en/transparency/

    >Tether tokens, loans them to their big colleagues in the cryptocurrency space

    See the above link. Their reserves aren't made up those kinds of loans.

    >The cost of a transaction in cryptocurrency systemically is the amount being used to protect it.

    This isn't true. If I charge $100 per transaction that doesn't mean that $100 of that goes towards protecting it.

    >So let’s do programs that cannot be updated that handle mone

    This isn't true. Smart contacts get updated all of the time.

    >There’s no mechanism to fix problems if they occur. There’s no undo button. In fact, there’s often no way to upgrade at all.

    This is just plain wrong. You can even make upgrades which are delayed that you can potentially cancel to prevent from being applied.

  • by jrm4 on 5/14/22, 2:02 PM

    While the vast majority of today's anti-crypto articles are generally accurate, always bet against articles like this, in favor of first principles.

    "Anonymous-ish cash, but on the internet" is a very attractive proposition. I'd also add to that "Locking up your money to get more money later" is as well. So much so that I'd strongly bet in favor of "people figure out how to make it more efficient, safer, and less destructive" against "It's just going to fail and go away."

  • by ur-whale on 5/14/22, 1:28 PM

  • by sudden_dystopia on 5/14/22, 12:12 PM

    Yea, sorry but not going to trust proponents of MMT on economic issues. Yes crypto is mostly a scam. I do think that btc is different though.

  • by block_dagger on 5/14/22, 12:46 PM

    Most of crypto is trash. However, Bitcoin will live for a very long time and take on appropriately high value. I don’t understand the folks who don’t see its incredible worth as a store of value. It doesn’t need to produce anything tangible to be valuable. Indeed it’s more valuable as a pure medium it seems. That’s the point.

  • by dandanua on 5/14/22, 11:13 AM

    "There is only one thing cryptocurrency is good for" https://youtu.be/J9nv0Ol-R5Q?t=1986

    It's from author's lecture.

  • by Gibbon1 on 5/14/22, 10:44 AM

    Just remembered a couple of years ago I mentioned to a couple of friends that once the Feds zero interest rate policy ends cyrpto will collapse.

  • by beej71 on 5/14/22, 2:49 PM

    I get the environmental argument about proof of work, but aren't other consensus mechanisms addressing this?

  • by mypastself on 5/14/22, 11:27 AM

    Somewhat relatedly, I’ve been wondering for a while now why so many people here are so intensely, emotionally against this tech (and consequently why so many mediocre articles on the topic with emotionally charged titles are upvoted to the front page).

    Plenty of different arguments are offered by the commentariat, some of which have merit. But whether the stated reasons are environmental issues, political implications, scams, ransomware, or illicit trade, the one commonality seems anger and desire to ban and destroy all crypto.

    A commenter recently stated candidly that they simply feel envy. They’re bitter about their bro-type friends and acquaintances getting rich overnight and flaunting their wealth. It clicked for me that HN commenters are more likely to personally know such people and feel resentful towards them.

    That may sound like ad hominem, but I’m not addressing the arguments (many of which I agree with). I’m speculating about the reasons for the disproportionate level of ire directed against crypto on this forum, and personal resentment feels like a good candidate.

    The reason I even care is that I’m hoping to read (even if not always necessarily participate in) higher quality discussions on this topic. The tech is here whether we like it or not. It might fail horribly (as many here seem to be hoping), but what definitely won’t help are the “I hope this Ponzi scam dies soon” one-liners on almost every article on the topic.

  • by jamesredd on 5/14/22, 10:23 AM

    This guy calls Elon Musk a "walking talking Dunning-Kruger syndrome". That's the level of discourse you can expect from him.

  • by uwuemu on 5/14/22, 1:01 PM

    I'll do you one better

    > Why All Of Silicon Valley Should Die in a Fire

    Just an extension of the original... and just as dumb.

    Also, I get the general sentiment on this site is CRYPTO BAD, mut can we please not jam the front page with links like this? What will be the next "why all x should die in a fire"?

  • by __B_B__ on 5/14/22, 9:37 AM

    Whining about proof of work. Check. Whining about ransomware. Check. Ponzi scheme. Check. What an organic article and opinion.