What is there to explain? People who are invested in cryptocurrencies are hyping the equivalent of digital trading cards because it has the downstream effect of increasing the hype on cryptocurrency.
That doesn’t mean it will change the world. But I’m always interested in hearing from intelligent people who differ on why they think it will.
So far there are only two arguments that I understand:
1. Libertarianism: The world will be better if we remove the government and other 3rd parties from interfering in transactions between individuals.
2. Decentralization of Money (Crypto), like the decentralization of information (The internet) will unlock technologies and opportunities that we cannot appreciate now.
Those are logical arguments, but I'm still missing the "so what" answer. How does the lack of government oversight change my life? My next bank account may be decentralized, so what? Does that mean I get better service? Lower Fees?
I understand that plenty of people were unimpressed with the internet when it first came out, but I was not one of those people. I got it and was online in 1995, I bought GOOG in 2005, and TSLA in 2014. So I'm not your typical technological naysayer. Maybe Bitcoin isn't just an accidental Ponzi scheme, but as far as I can tell that is what it will be when we look back in 10 years.
These days a bank account will cost you money. Any savings account available to most people offers interest rates at or below inflation, if they're not 0% and charge fees (making those ones functionally offering negative interest). Even more glaring is being charged fees for not having a high enough balance in your account.
When you're young and poor and you look to a bank to help you grow out of that state, and you're offered the above, you can understand why it would appear the game is just plain broken. And that's just talking private bank accounts, not the larger economic sphere.
To me, it's no wonder that people are trying out different things, even if they don't work. It's better than just accepting the thing that's already not working for you.
At least one of the implications of systems like ethereum is that they enable autonomous contracts that are decentralised and at least in theory don't require any separate and typically centralised governing body to execute and enforce, which could in turn lead to a range of new models of business and human interaction.
It remains to be seen what will happen, the technology is still young (the Web took about a decade to start catching on in the mainstream as perhaps being something more than a flash in the pan) and lofty ideas are being thrown at the wall as the new concepts are explored in both good and bad ways.
Having seen the ups and downs of the online revolution I have a hunch at least some of it will stick, and whether this moment goes down as some great proletarian revolution or becomes just another tool in the billionaires belt seems up in the air to me, but at the very least it is disruptive and we may be seeing the birth of the next generation of crypto barons.
Or anything could happen, like by some unlikely turn of events we solve prime factorisation and the whole thing fizzles into history as a big oops moment, or jackbooted forces raid homes and data centres to destroy all crypto-related hardware and knowledge.
I feel the outcome will be somewhere between the two extremes of utopia and dystopia, it just seems to be how things turn out, but as you say at least people are trying things. Disrupting the status quo is how society moves forward, humanity never seems too comfortable sitting on its haunches (for better or worse).
Cryptocurrency at the core is about solving trust issues and human coordination issues. Just because you don't have these issues in your life doesn't mean they aren't extremely important for the world. Part of the problem is that at times crypto has been sold as a consumer technology, remember before Bitcoin was digital gold it was going to be the microtransaction currency of the internet, which excited a lot of people looking through the consumer lens. But in the bigger picture of how revolutionary the technology is, microtransaction are the least interesting thing it could do.
This is a brand new technology that can solve trust problems and allow global business and trade to work more efficiently. It can allow humans to organize more efficiently and create brand new kinds of institutions (DAOs). Take Uniswap as an example. It's a decentralized exchange running on the Ethereum blockchain that has at times done as much daily trading volume as Coinbase. Now here's the kicker, they have two orders of magnitude less employees than coinbase (15 vs 1500). So not only are they vastly more efficient than legacy exchange technology, they also solve the trust problem because there is no third party taking custody of your funds, it's all done on the blockchain.
Another interesting example I've been pondering lately is automated insurance policies that run on the Ethereum blockchain and payout based on decentralized oracle data feeds from Chainlink. Imagine a farmer in Africa who doesn't have access to crop insurance, but needs to smooth out his year to year risk so that he doesn't go bust during a drought year if his crop fails. You can now write a smart contract that takes data from a decentralized oracle network providing rainfall data. A user can then pay into this contract and he will automatically be paid out if the rainfall during the growing season is below a certain threshold. So the farmer gets a slightly lower but much more predictable income stream. Someone else (who's better capitalized) can take the other side of the bet to collateralize the insurance policy, and earn a higher but more volatile payout.
This kind of efficiency per employee was never possible prior to blockchain. It's like how software and the internet allowed greater human coordination and orders of magnitude efficiency gains over legacy business organization, just applied to the world of finance. In the same way those massive gains in efficiency are allowing software to eat the world, crypto will eat the world of finance. This is a deep back end technology, and it's likely that by the time you're using it you won't even be aware of it as centralized institutions will adopt it on the backend while still providing you with a familiar user experience.
Just as the internet unchained information from government and industry powers, cryptocurrency breaks the world of finance out of institutional control. This has the massive benefit of allowing bottom-up innovation, which is extremely valuable no matter which country you live in.
Insurers have sizeable fraud departments. If a system is unreversible and exists in a place without enforceable contracts, wouldn’t that allow for a large gaming opportunity?
So in the case of Chainlink the idea would be that it's much more profitable to be an honest data provider than a dishonest one, and each data source uses a number of independent data providers. If you act dishonestly you will lose out on the value you could have gained by acting honestly and also be penalized in the reputation system.
What remains unknown for me is whether that something actually exists.
That would also apply to the stock market etc but ultimately traditional finance does allocate capital to businesses and actually produces things in the economy.
However, if Chainlink etc can link all of that Defi stuff to real activities, it could be powerful.
I’m still on the fence as I haven’t seen too many practical examples, but it definitely seems to be the space to produce one if they can be made to happen.
You're right - I do live in America :)
No, only the person who wins the bid gets the token.
I typically defend the tech behind NFTs but this just seems like it's riding the hype of NFTs more than anything.
Good on them for doing that. Their mission is to save as many lives as they can and if riding a hype train lets them do that, then the overall outcome is still very positive. The environmental externality is bad but trivial compared to the benefit of lives saved if this auction goes through.
With a bit more of creativity/effort, someone could have created a smart contract for keeping track of all the donations and only releasing them once they reach a certain threshold, then giving a token back representing a "life saved" to donors if they truly wanted, but I get capitalizing on NFTs' hype right now.
> > > it's riding the hype of NFTs more than anything.
The point is hype-based advertising. As people have been repeatedly pointing out all over the thread.
People are 'enthused' because they have a lottery ticket that could go to the moon and are want others in on the action.
The charity is trying to hop on the bandwagon of 'money appearing out of nowhere'.
We are clearly headed into a fairly inflationary situation, I'm curious as to how we will look at this time 20 or 40 years into the future.
You get press for being the good guy and don’t have to spend a dime. What a great thing to be able to achieve.
So while saying “please donate” might get say $100,000-$1,000,000 more, even a single bid from a other investor/founder who wanted bragging rights for beating PG will dwarf that.
If so it presents an interesting mechanism to elicit donations in rich social circles.
Snowden - Freedom of Press Foundation 5.4m https://www.theverge.com/2021/4/16/22388548/edward-snowden-n...
pplpleasr - Stand with Asians 550k https://www.theblockcrypto.com/post/99615/uniswap-v3-nft-sol...
Some crypto/NFT millionaire who would normally never donate might well well be coaxed into donating once they see that "NFT" or "blockchain" is attached to the prospect.
My take - it's like a prize result. If you run some race there's a big incentive to be the #1 winner even if there's no prize money or trophy. It's just the general agreement that Joe Bloggs was the winner of the whatever race. Still people dedicate their lives towards achieving such things.
Likewise with PGs NFT someone will be able to say I was the winner of that auction and the world will agree and it is something that will be with you forever.
“Is this person an expert in using this product? No? But it’s selling like hotcakes because this person is a celebrity, and people find them interesting almost solely because other people find them interesting.”
So taking a donation and wrapping it in an NFT feels like taking a product and getting a celebrity to endorse it. The NFT itself really adds nothing to the idea of donating to this charity.
But he explains nothing here. Noora seems good, but that’s a feature of Noora, not NFTs.
As for what is going on, I looked at Noora’s post, it seems PG has placed the sole bid on the NFT, valued at $2.6 million at current market prices of ETH.
In return he will get a token that says he did it.
One part I’m unclear on: if someone outbids him, do only they get the token and pg pays nothing, or do both pay and are the contributions etched into the NFT?
> But the higher the price of this NFT goes, the more lives will be saved. What a sentence to be able to write.
Noora sounds like a good charity but what is different here from simply saying “the more people donate to Noora, the more lives will be saved”
Since Noora knows their ROI they should be able to calculate lives saved from a donation whether it is a normal donation or an NFT purchase.
If so, what does the NFT do?
Many smart people I follow, who are ordinarily good explainers, are inordinately enthused about crypto. And yet on this single topic none of them have produced any public writing explaining the reasons for their enthusiasm.
It is maddening. There may well be something there. But if there is it ought, in principle, to be explainable.
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I should also note you can’t take this and say “NFTs contributed $2.6 million”. You have to consider opportunity costs. The closest alternative to this post would be PG writing exactly the same essay except stating “I donated $2.6 million to Noora and you should too!” with a donate now button.
This post hit the HN frontpage, so surely many would have donated. Whereas nobody has donated other than PG.
Measured against this alternative, the NFT vs a normal funding mechanism has plausibly cost lives. Not to mention the money that Noora will take out of its funds to do a carbon offset.
Perhaps I am misunderstanding how this works, but if I have understood it properly and PG would have done an essay either way this might have cost lives.