I hear this all of the time, but the people and projects “reshaping the economy and politics” are rarely ever named. When it comes to blockchain and cryptocurrency, we’re supposed to believe the “good ones” are out there, somewhere, while ignoring the fact that the blockchain/crypto space is absolutely drowning in meme tokens and obvious cash grabs.

The superiority of blockchain solutions seems to be assumed for many believers, so it’s natural to assume that superior solutions will eventually arise from this superior blockchain technology.

But the superiority of blockchain isn’t obvious for most problems. Moreover, if someone does build a superior solution on top of a blockchain, what’s stopping a centralized player from duplicating the benefits of that superior solution at a lower cost in a centralized platform?

This is the conundrum of blockchain and token projects: For them to be superior to the consumer they must eventually have lower fees and costs. Yet blockchain is inherently more expensive than equivalent centralized solutions and, even worse, the token investors expect astronomical (to the moon) returns on their investments, which necessitates extracting a lot of money from the users after the speculative frenzy has died off. At least currently, most blockchain/crypto/token schemes are built with the assumption that the consumer is the person they will sell the tokens to as a speculative investment, not the person who will actually use the service itself.

Decentralized solutions actually have a lot of problems that proponents avoid talking about. For example, DAOs are promoted as ways of decentralizing ownership, but we're supposed to ignore the fact that a well-capitalized player could simply spend their way into controlling a DAO by purchasing up enough tokens. And unlike with real-world companies, the ownership can be purchased anonymously in a way that makes it appear to come from a lot of organic traction. A well-funded company could simply spend their way into controlling a DAO and neither regulators, users, nor consumers would even know. We're supposed to believe this model is a boon for decentralization, but it's a dream come true for surreptitious takeovers.

There are two good reasons for that:

1) The culture around careful discussion of crypto currencies does well to keep seperated financial advice and claims about economics, incentives and technology (or in the crypto space you call of these 'the protocol' or something else to refer to the complete package a distributed ledger technology aims to achieve) - these claims can quickly get mixed up with lies to make money using buzzwords. You don't want this discussion to turn into people shilling what they personally own, trust me, and refraining from naming good projects when off the metaphorical sale's floor is simply good manners.

2) Crypto is still very nascent. Smart contract platforms that are fast and cheap are only starting to be rolled out and stress tested - without that most of the auxiliary functions people envision are only aspirations. If that's where basic smart contracts are right now, then more advanced protocols you can easily tell are much less far along. Because of the lack of industry proven protocols to do what believers pretty much know will happen someday, recommending any means imparting risk on people like you who expect others to tell you "what's up." Its not that fun giving someone risky investment advice when they refuse to look into it themselves and shoulder that risk.

I don't know about politics, but there are definitely coins reshaping the economy. Hell, bitcoin by itself is reshaping the economy, being considered by many major institutions to officially be a new asset class now[1]. It doesn't mean a total replacement of the economy, if that's what you're thinking, but it's definitely reshaping it.

DeFi is already taking a nice chunk out of central banks' lunch. Celsius, USDC, BlockFi, etc, are able to credibly offer 6% or higher yield[2], whereas banks can only offer, at best 0.6%, nowhere close to beating inflation.

That's just two use cases, and if I had more time this morning I could go into more (didn't even touch on smart contracts at all). Wouldn't be surprised if you'll dismiss them out of hand as bad projects according to whatever internal criteria you have, and if so, I don't think you'll ever be able to convinced that anything a good project.

It just gets annoying to hear people dismiss the entire space all the time without spending more than a few minutes looking into it, and/or assuming that the space never evolved from 4-5 years ago, where you could safely make those claims.

[1]: https://ca.finance.yahoo.com/news/bitcoin-is-officially-a-ne...

[2]: https://defirate.com/usdc/

There's such an abundance of VC money that funding isn't scarce. Developer talent is however.

Seeing as this "planetary infrastructure" will consume more energy than it produces. A better description would be "planetary snakeoil". The economic equivalent of a perpetual motion machine.

I really don't see how this thing shakes out well for humanity (not even including carbon costs)

Is it a problem, though? Not according to the protocol.

Asserting that it is a problem is a political statement.

I know very little about this space, but I get a very strong "real deal" feel from Charles Hoskinson.

https://en.wikipedia.org/wiki/Charles_Hoskinson

https://twitter.com/IOHK_Charles

https://roadmap.cardano.org/en/

I am most optimistic about blockchain based innovation with respect to direct/liquid/etc democracy.

https://cardano.org/governance/

Please stop pushing this snakeoil!

> appropriate taxation of a transaction is built into a smart contract

So, like sales tax. Which we have uniform and open laws for. Or income tax. Which we have uniform and open laws for.

> everything from deciding on how to spend that tax money to the project management for the efforts those tax dollars fund is conducted in the open

Tax laws are public knowledge. So are spending decisions. For example, the infrastructure bill that just passed. Anyone can see exactly the allocation of funds to where.

> by people who have achieved various types of stakeholder status

So, senators. Which we have already. Or direct democracy without senators, which the founding fathers (US-specific) agreed was bad because most people do not understand how taxes and budgeting work.

I want to be convinced that this is somehow different from the current system, but any example I see is either the same (but looks very different) or worse (this part is arguable, but I don’t think proportional voting on tax law would end well. Most people would certainly just end taxes if given the choice with little regard to the long-term consequences of this.)

Laws are not mechanisms, proof of transaction, records etc..

'Smart Contracts' as something unassailable in courts are ridiculous obviously.

But 'smart contracts' that facilitate micro-transactions, every day purchases, and flow through the system without human interaction seem like a good idea.

Imagine when you buy that thing on your Business Visa, and the 'smart contract' is signed, sent to head office, sent to your accounting software, balanced, money in your bank account immediately etc.. All with a series of signed elements.

I understand that's not exactly what it's supposed to look like, but that's the kind of thing I see happening.

While you could say 'there should be a standard for that' it might be that the standards are not nimble enough, and a more generic 'start contract' system could work to tie it all together.

And maybe importantly: to skip VISA and classical banks while we're at it.

This already happens at every company I've ever worked for, modulo the "in your bank account immediately" part. But that's down to how cash flow works, which is fundamental to most businesses/industries and can't be solved by anything other than time travel or teleportation. No amount of crypto is going to change the fact that the restaurant needs to sell a completed before it can pay the cook for their prep work. Even if bank transactions were immediate, most people would have to wait until their next paycheck to get reimbursements.

The underlying technology is a 90s relational database, some html/javascript/php, a bunch of java, and probably some cobol somewhere.

> And maybe importantly: to skip VISA and classical banks while we're at it.

As much as I hate the privacy invasion of cc companies and banks knowing everything I buy, the idea of my entire financial life being published on a public chain is waaay more creepy. Like most normal humans, I am mildly creeped out by big companies knowing things about me but would be seriously angry if my manager, pastor, or mother-in-law knew those same things.

It's also possible that the government could get some of their taxes right away. Obviously not in call cases due to varying accounting issues, but it could work.

FYI there's no reason for 'all your transactions to be on the blockchain' - that's just the way it works today but that can change.

Out in the Real Economy there's a thing called cash flow. You can't pay your employees before your customers pay you.

> FYI there's no reason for 'all your transactions to be on the blockchain' - that's just the way it works today but that can change.

You're right. There's no reason.

As an employee, you're not there to provide working capital for your company, so if you're buying something really that the company should be paying for, they should be able to pay for it immediately.

Again, this may be true in Corporate America, but it's far less true in small businesses (which are a huge fraction of any economy).

> As an employee, you're not there to provide working capital for your company

No, that's the role of my credit card company (and what's more, they pay me for the pleasure & my only real expense is divulging my employer's spend).

This part is interesting, the idea that enforcement and legislation are one in the same. However, for taxes, this would only just prevent tax fraud, right? There’s not really “mechanisms” for taxes. Congress passes the laws. You follow them when you file your taxes, or you may be audited later and fined/jailed.

> to skip VISA and classical banks while we’re at it

Loan pools and such are interesting, basically community lending. I’m not sure how much we could skip VISA. It’s a payment processor. You need someone to submit your transactions to nodes. In reality, they are of course going to charge a fee because they can make money. Just like VISA. One advantage is I guess they won’t have VISA’s prudish objections to certain kinds of transactions.

To be fair, people were MUCH dumber back then, and the capability to access information was a modicum of what it is today. Direct democracy was also impossible back then given the slow speed of communication and population distributed across vast territory. Today, I don't think it's fair to paternalize the general public as such - we have the system we have due to legacy and inertia, not its merits.

This is very obviously the case if you take time to read old books.

A lot of the supposedly dumb things that people believed in the past were actually quite well supported and derived theories with the information they could get at the time.

Of course there were a lot of people who believed dumb things on blind faith, but this is just as true today as it was then.

Similarly (and it's already happened several times), what happens when someone finds a loophole and drains the entire GDP of a country into their account? Do we say "Oh, well that's what the smart contract said, so bye bye country?"

In the future, I don't think we'll see many monolithic contracts like you're describing (no USA smart contract). Instead I think we'll have a bunch of small, simple, and battle tested smart contracts that we can fit together like lego bricks.

Its essentially people thinking "we're not getting a fair shake here from human law, let's try robot law".

I don't think smart contracts are in that space and I don't think any level of maturity is going to get you there.

Imagine a future with multiple levels of smart contracts that allow for court intervention and arbitration. It starts to resemble the checks and balances we have in place now, but the rules are public and codified.

If, however, there are a limited number of known possible outcomes, then smart contracts offer advantages over court-based settlements.

You mean like, say, the current system of laws we have? (:

Sure, laws are strange and arcane and require expertise to translate them into understandable terms, but any form of code has the exact same problem.

Currently, the current system requires lengthy court intervention with interpretation done after the fact.

Smart contracts can allow for a fixed number of resolutions with a timeframe defined up front. Smart contracts won't work for everything, but they might be a better fit for some things.

That's great! Could you provide some details on what these projects might be and how they aim to reshape political and economic life to be more open, formal, and participatory?

As others have noted, and indeed the author might point to, this kind of response is sort of a quantum woo dodge. It asserts that some of the quantum woo is genuinely helpful and useful and functional with clear mechanisms, but by coincidence fails to point to any in particular or specify mechanisms.

Bankless | 90 - 5 Mental Models for Web3 | Chris Dixon https://www.youtube.com/watch?v=jezH_7qEk50

The solution to censorship definitely isn't non-deletion. Usenet died for a reason and 4chan is fringe for a reason. The solution to censorship is a healthy choice of venues, good discoverability, and low/no switching costs. Basically, modern phpbb forums or discord but searchable.

Many of the currently accepted ideas around these topics came from a pre-internet world. However, myself and others think that certain technologies have changed the game.

Maybe we need government or maybe we don't. Maybe we need a centralized currency, maybe we don't. The thing is we won't really know what we need until we run the experiments.

Personally I think these experiments are too important to silence them.

All of that without a popular usecase yet. Except for financial speculation, finance-of-last-resort, and crime.

I would say that laboratory is not using the research grants well.

When you can't open a bank account, are discriminated against by institutions, live in highly authoritarian environments etc. This type of finance is not a "last resort" it's your first resort.

The reason it's not "popular" however you want to define it is simply a matter of time and not function.

Asking about use-cases for crypto is like asking for use-cases for the internet in the 90s. It's so general purpose that there isn't a specific use-case to sell you on but instead a set of smaller use-cases that add up to a large use-case.

For example, I would love for charities to be built on crypto. Many of the larger charities only use a small percentage of their funds on the problem they're trying to solve. I'd love to see exactly what my charitable donation is being used for. Luckily crypto is public and therefore publicly auditable.

I could list off similar use-cases and each one doesn't seem to be a big deal. But put together it's a huge change in how we view the world.

And as for your other arguments like crime, these don't match up with actual data. Crypto being public is a large turn-off for criminals so they tend to prefer cash instead.

They have already released the first of three phases. It's live now. I currently have some ETH on the new Proof of Stake chain. Second phase (where they merge it with the rest of the network) got pushed back a few months recently, but it's still expected Q1/Q2 2022[1].

I see and expect this argument from people who aren't in software, who expect everything to happen perfectly and instantly. But you should have been involved in enough projects to know you can't just Thanos snap a major software upgrade into existence.

https://ethereum.org/en/eth2/merge/

Gamers: "No problem. Take the time you need to make it good."

Crypto developers (who are responsible for billions of dollars): "We need to push back the release date"

Techies: "How dare you. I'm going to imply you're incompetent even though I don't follow the development process at all."

Experiment away! But not with mega-scale proof-of-work projects that consume ungodly resource as a byproduct of securing the network (which is a financial problem in any case)

Are you familiar with any methods to achieve the same characteristics of Bitcoin but without PoW? Perhaps the energy is not the issue, perhaps it's your view to the importance of it.

CryptoA != CryptoB. Specifics matter, _a lot_

It takes 128gb of RAM just to run a Solana node. Higher system requirements = less decentralized. Fewer people can join the network. They also pump up their transactions-per-second numbers since they count proof-of-stake votes as transactions.

Cardano has a centralized development team. Whereas Ethereum invests in multiple, independent development teams. This means that a software bug is less likely to take out the entire network. Additionally the founder of Cardano is known to be a bit of a pathological liar and was kicked off the Ethereum team because of this and the fact that he wanted to take Ethereum private.

This is all stuff that anyone can look up.

In any case, the "unique characteristics of Bitcoin" are what makes it abhorrent.

I just mentioned the two top PoS crypto, but anything that doesn't gobble resources as a byproduct of the network security cost is fine. I agree that Cardano is run by a maniac and Solana is centralized and too affiliated with scammers (SBF)

PoS Ethereum would be fine by me, but they've been saying they'll switch forever, so I'll believe it when I see it.

Resorting to a such a fallacy is generally a sign you have nothing defensible to say about the absurd waste BTC produces

Even if you want to change the subject, I can't get a GPU because 1/5th of the GPU supply is shipped to ETH mines.

Regarding GPUs did it ever occur to you that YOU are wasting electricity? From my perspective I'm trying to use crypto to create a better world.

This criticism should really end - yes, it misleads many people!

Creating a decentralised app, or a token, is permisssionless! Yes, anyone anywhere can do it. Much like publishing a website, or writing a blog article, the costs are negligible. The fact that there are a lot of useless websites and blog articles does not invalidate the usefulness of the web!

The existence of shitcoins means absolutely nothing.