I feel people think “if everyone had bought Bitcoin when it was cheap, everyone would be rich now” and then think that Safemoon rugpull #42053 will somehow do it.
'The majority of cars worldwide are not electric. They are all petrol and diesel cars. That means that ALL cars are bad for the environment and that will not change and thus should be all banned.'
Not all cryptocurrency projects are scams, just like not all cars are burning up the planet.
The absolutism towards whether if all cryptocurrency projects will go away due to a 'bUnCH OF Scam PrOjEctS' or 'it's ALl a scAm™' is just as silly as suggesting that all cryptocurrency projects are guaranteed to survive, 'becAuse iT is the FutURE, bRO™' or 'JUst WaiT fOr ThIs PrOJEct ReAL sooN™'.
I'll tell you that both extremes are incorrect. That is even before accounting for regulations getting involved.
Okay, I'll bite.
What's incorrect at the anti extreme? In other words, what crypto-currency isn't a) burning down our planet and b) disproportionately rewarding early adopters?
It can just take a single example to invalidate that question and Nano [0] perfectly does so. Unlike the others, it is not 'burning down our planet', was not 'pre-mined' / 'pre-allocated' or ever did an ICO back when it was launched. sorry.
Now here's my question to you since I answered yours: Hence your support for the anti crypto-extreme: Are they all going to go away 100% guaranteed despite all the other scam projects existing and with looming regulations on the horizon?
And that's great. But why is everyone and their dog still using proof of work? Large nations worth of power is being burnt to process all the others.
Why would they go away? Regulation, even bans will only disrupt the price, push wallets offshore. While there's an anonymous currency you can throw around, accept K&R payments through, it's going to be popular with tax cheats and criminals for a very, very long time. See: the effect of regulation on drugs.
Are you sure that's an argument not to use 'cryptocurrencies' (since you tried to label all of them as 'burning up the planet' which that was debunked) or was that more to do with those using PoW? It's like asking 'Why is everyone and their dog still driving diesel and petrol cars and trucks, with those still emitting tons of CO2 into the atmosphere, despite the existence of greener alternatives?
> Regulation, even bans will only disrupt the price, push wallets offshore. While there's an anonymous currency you can throw around, accept K&R payments through, it's going to be popular with tax cheats and criminals for a very, very long time.
That's the same way of saying that they are not going away 100% guaranteed and there will be lots of regulatory compliance; exactly what I already said. That's why mining PoW cryptocurrencies are banned in countries like China [0] and Kosovo [1]. Instead with regulations, it is going to get a lot harder for tax cheats, criminals, etc to use their privacy coins as the exchanges will delist them to prevent undesirables from converting it to fiat. [2]
[0] https://fortune.com/2021/11/17/china-bitcoin-mining-ban-cryp...
[1] https://www.bbc.co.uk/news/world-europe-59879760
[2] https://www.coindesk.com/policy/2022/03/31/eu-parliament-vot...
Exactly. More crickets that are unable to respond to my question(s). Is that why you also haven't responded to my latest question and went on to vent your anger on to the latest crypto post?
> I'll tell you that both extremes are incorrect.
Being extreme or not have little bearing on an opinion being correct. Some opinions, such as "murder is bad", are both extreme (they suffer very few exceptions), and correct.
And it happens quite often that the most informed opinions also happen to be the most extreme. And as far as I can tell, this seems to be the case for crypto currencies: the more I look at them, the more I think they cannot be redeemed: to date, I have seen no problem that is best solved by a blockchain, and I increasingly doubt there ever will be.
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> Not all cryptocurrency projects are scams
I can believe that. However, I do believe that all crypto currencies, without even a single exception, are a net bad for the world. If we restrict that to proof-of-waste crypto currencies, that belief is a near certainty.
Long story short, it seems that in practice, all crypto currencies eventually devolve into a pyramid scheme. They're also used as an actual currency, but their volatility is such that it's not very practical to begin with, and that use is so marginal compared to "investment" that the financial freedom gained by people who actually need it is outweighed by the harmful side effects of the pyramid. (We ruin more people than we save.)
Add proof of work (or space-time, or whatever scarce resource you can think of), and you end up with a massive waste of resources on top of that. A waste so massive in fact that it manages to influence electronics prices around the world, not to mention the energy consumption of the Bitcoin network alone, in a world that really really needs to reduce its CO2 emissions. Like right now. https://en.wikipedia.org/wiki/IPCC_Sixth_Assessment_Report
They may not be all scams, but as far as I can tell all honest attempts are doomed to fail.
As opposed to our current financial system which is built on the idea of creating real (except when we reeeeally want some extra money, in which case we just make some more), regulated (unless your regulated activity is conducted by an entity that is sufficiently rich or powerful) money and then control a global hegemony with it.
Crypto is not a solution to every problem and it definitely makes some new ones, but it sure would make for an interesting redistribution of power. I think there reaches a point where the levers of the modern currency system are much, much too attractive for human governments to be trusted with.
No that's not what I was saying and this is one of the most terrible things about any cryptocurrency discussion. People can't seem to avoid viewing it as something "opposed" to any current financial system, when that's not true. Cryptocurrency at best is the same as the current financial system and that's a huge stretch if you can somehow avoid all the negative externalities created by the insistence on using blockchains. So I would really suggest you avoid this angle when talking about this. Yes, all money is technically "fake". The difference is that real currencies that function as currencies are backed by some kind of real productive human activity to sustain that thing. Cryptocurrency by definition is not this, and it never can be unless you discard the fundamental concepts of it.
>but it sure would make for an interesting redistribution of power.
No not really. If you define "interesting" as something unpredictable and dramatic, then it would be more interesting to have the government raise tax rates to 99% and then randomly redistribute the proceeds via lottery. But nobody wants to talk about that because it doesn't require any kind of tech solutionism like cryptocurrency does. And also it would just be awful for most people. But hey, if you just want to convince some rich people to voluntarily pool their money into a trust that then redistributes it via lottery, you might as skip straight to that and avoid all the cryptocurrency shenanigans.
As for your next point, I'm not sure in what sense our current currency is backed by real human activity in a way that crypto is not. Currency is backed by bullets, bombs, and bayonets ( and sometimes softly spoken implications of the aforementioned alliteration). I guess that's a sort of human activity.
"But the regular financial system is a scam too!"
It has lots of flaws, but it grew organically over thousands of years, and so did regulation that offers some reasonable protection that lets people use currency without massive risk of getting scammed (I'm sure there is a pedantic counterpoint to this, but overall, people get by on real money, much better than if they "invested" - because that's all you can do, you cant actually transact in any normal way - in the current crypto nonsense.)
Anyway, if your best argument is that real money is also a scam, it's hard to believe anyone would be lining up to switch to your scam
Cryptocurrency is not an industry and doesn't have any good parts. The technology itself is useless and universally bad for any practical purpose. It solves no problems, it only creates them. The "good things" done by companies using cryptocurrency are in spite of the technology, not because of it. Some companies don't even seem to bother with this though, and I'll call those out specifically.
I would also call out a virus-scanning company if we found out they were secretly developing and deploying the viruses on the side and then selling the solution to increase their own profits. The same thing is happening here with a lot of blockchain products except they aren't even trying to keep it a secret what they're doing.
Honestly, the arguments are basically the same as the gold bugs and the motivation is the same. People are invested in gold so they want it to succeed even at the expense of other people. Same with cryptocurrency.
As I understand it, “equality” in a society refers to people’s equal access and treatment in some aspect of society (health, education, financial, legal, …)
Whereas “inequity” in a society refers to different outcomes for people (billionaires vs the indebted unemployed, for instance).
Outside of scams and fraudulent or deceptive launches, crypto seems to be very equality supportive to me.
That it has magnified inequity isn’t a reliable indicator of a lack of equality.
Equality enables everyone equally, it doesn’t provide equally for everyone.
Even if everyone had equal access to capital, we would still be talking about the equality of restructuring economies to wildly benefit a minority who gambled and got lucky. Should a single currency gamble "win", it will be in no small part due to heavily invested and politically powerful people making that happen.
People pursue very different paths in life. People dedicate themselves to the paths they do take with varying degrees of effort, thought, etc.
Inequity is going to always be the result. Enforced equity has (so far) simply enabled enforcers to create inequity in there favor.
I think it is a mistake to treat all inequity as “the” problem. Because it isn’t, and because that distracts from solving problems that can be solved. (To a higher degree.)
The crypto holders not only would love if the whole world switched but they actually depend on it to realize their profits, and for the latest adopters to not be left holding the bag, which at least the last 50% of adopters will be holding some portion of the bag/losses before and once it collapses; the wealth transfer will already have happened to the early adopters, and so whether the "community" or army of HODLers pity themselves and keep dabbling in it to keep their dream alive or not, will be interesting to watch at least, perhaps if it's not too embarrassing for the majority; the ones who exited with millions to $100s of millions, at least some of them of course will proudly showoff their gains by being in the MLM-Ponzi scheme(s) early - not being shameful of the unknown harm and losses their gains caused others and society as a whole. A lesson, to say the least.
But the above is why those of us who see what Bitcoin et al are for what they are need to take a stand because regulatory/systems and policy capture will happen and is attempting to happen, perhaps the most extreme example of this so far being El Salvador - where their current "elected" leader at one point brought in military with guns into their parliament to threaten their parliament if they didn't adopt whatever he is/was gunning for; then you have a government/organization that's shown an example of what they're willing to do wanting to then influence the rest of the world (by whatever nefarious/violent means they may be so inclined to do) in order for a global-decentralized financial database to be required to be used, to then realize their gains, which richness wise, if they succeeded at getting the world to adopt - would make them as relative early adopters, very rich indeed - at least those in government who actually control the keys to their kingdom's crypto vault.
Once I saw a significant portion of the mainstream VC-finance industrial complex buy into it, arguably heavily lead by USV with their Coinbase and other ecosystem investments - gaps they knew someone would have to fill, including funding a crypto lobbyist organization, then I knew things would get too serious to ignore. The solution however simply seems to be thoroughly educate the population so they understand the mechanisms - as most of what they will have seen or heard about is easily considered propaganda to hype up to sell more of whatever flavour of MLM-Ponzi scheme they can convince/trick you into buying.
Edit to add: Forgot to link to article re: "Heavily-armed police and soldiers enter El Salvador parliament" - https://www.bbc.com/news/world-latin-america-51439020
I don't know what an equitable monetary policy would be, but I know that intentionally deflationary currencies look nothing like it.
[1] https://www.investopedia.com/terms/d/deflationary-spiral.asp
Every employee in Germany is required to pay a share of about 20% of their income (1) into the retirement „fund“ — which isn’t one really as the money is not invested to gain interest but instead is immediately payed out to the current generation of retirees. On the other hand, employees are promised to receive a future pension based on the payments by the next generation of employees (i.e. their kids). In Germany, this is called „Generationenvertrag“ („contract between generations“).
This is almost like a Ponzi/pyramid scheme where obscene „profits“ are payed out purely based on the exponentially growing number of payees until the day the growth stops and the system collapses like a house of cards.
This breakdown has been happening for decades already albeit at a glacial rate in the German public pension system as the population has been shrinking and therefore the number of payees. It is artificially kept alive as the German federal government pumps 100 billions of tax money every year into it which is 30% of the whole federal budget …
Of course, a redistributive pension system can sustain itself as long as the population age distribution looks like a literal pyramid. But that’s not the case for most Western countries.
(1) Formally, the employee pays only 10% and the other 10% are taken from the employer. But, of course, the employer could as well pay his 10% share as salary instead. So, either way, it’s the employee paying everything.
Now if we think about it for a moment: social security need money for 3 major things: unemployment, retirement, and health care. At any given point in time, you can divide the population in 2 categories: those who are currently working, and those who are not. And those who are currently working pay those who are not (gross oversimplification). The question is whether the workers pay enough money to sustain the idle.
Now health care and unemployment ought to be fairly constant (barring some major crisis), and you can have rules so people don’t abuse the system too much. So no pyramid there: we adjust how much workers pay for health and unemployment and that’s the end of it.
Retirement however is subject to longer term variation because of that age pyramid. And at a time where we have boomers retiring, we have less working people to sustain them all. And it’s made quite worse when the salaries of the working people don’t even keep up with inflation. We could have solved this by having an exponentially growing population, but that is bound to crash at one point.
So okay, I understand the pyramid analogy there. There’s a problem though: the boomers will die. Population will eventually get over that hump, and we’ll have a more reasonable proportion of working & retired people again. So the temporary deficit is just that: temporary.
And if that’s not enough, there’s something simple we can do to solve the problem. It’s so obvious that (at least in France) people don’t even dare utter it on national television: just raise contributions a little bit.
But no, doing this is so unthinkable that our rulers would rather have people retire later. Which won’t work, because of structural unemployment. So what we’ll have instead is lower pensions, and an increased reliance on pension funds.
There’s a snag however: pension funds are actually a form of redistributive system. Because redistributive systems are the only system there can ever be. See, even though you’re ostensibly investing money so you can retire later, what happens in practice is that your money is being injected in parts of the economy to fuel your investment. And ultimately, part of that money will be used to pay currently retired people. And when you retire, and the time comes to get your money back, you won’t get your money from a frozen value store. You’ll get it from the current economy, be it interest rates from your investments or currently paying people. However you cut it, your pension has to be taken from the current economy, and the only way you get paid is if your pension fund (and by extension the whole economy), can support it.
I’d rather have an explicitly redistributive system, it’s more honest that way.
On one end of the spectrum, you have personal and "defined contribution" saving and investment schemes: the individual carries a personal pool into their later years where they draw it down. How are differences between the contribution+performance and lifetime needs reconciled? Estates pass inheritances or individuals are bankrupt and we recursively ask ourselves what sort of system will cover their needs.
In the middle, you have what I think you want. An insurance pool redistributes the contributions, performance, and needs among a cohort. How are the aggregate assets and lifetime needs of the cohort reconciled? Contributions could be curtailed in response to excess accumulation or increased to cope with unexpected needs. Like any insurance scheme, the risk management has complexity around managing liquidity in the face of time-varying needs, contributions, and investment/economic performance.
But what skeptics see is an ugly reality unfolding further down that spectrum. Population growth and the long delay between contribution and withdrawal is (either naively or willfully) misinterpreted as excess accumulation. This is used to justify either insufficient contribution or "theft" of assets to fund other initiatives than the insurance pool. This leaves a hollowed out pension systems with defined benefits that cannot be satisfied with their meager holdings. As with a Ponzi scheme, they appear to work while the incoming contributions from an ever growing cohort are used to pay outgoing benefits to an earlier, smaller subset of participants. They collapse when the participation rate fails to grow fast enough to meet the ever growing needs of the aging cohort.
Even if you save your retirement in a real estate, it's value is tightly correlated to amount of people in productive age when you try to sell it.
The only thing that can save one, is to start saving money early and give it to componding effect. Albert Einstein once said “Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it”.
Anything else wont work because demographic at least for europe is bad.
The good information is that to make componding effect to work, crypto is much more compund effect friendly asset in the world. Of course, in the mean time you need to use your brain to not lose your priv key or being phished etc.
Good luck
If the future population does not drive a large enough economy, there are dwindling products and resources available to swap for all existing financial instruments. These real resources are things like clean water, food, medicine, shelter, energy, technology, and services which cannot be stored over a person's lifetime and then consumed decades later.
It seems to me that the instruments with meaningful value in this picture are those rooted in a right to capture future production. That is things like ownership shares in continuing business enterprises, industrial infrastructure, natural resources, buildings, and developed land for housing and commerce. Of course, infrastructure and buildings decay over time, but they do represent a kind of real stored value for a planned service lifetime.
An actual plan to take care of a shrinking population would need to think about how automation can increase the efficiency of production such that a smaller future generation can generate sufficient output to satisfy the needs of the whole population including the elder non-workers. To avoid the Ponzi threat or more generally the "musical chairs" game mode, this plan needs to accomodate continous, incremental decline. The important technological and cultural skills to operate this system need to be passed down to ensure continued production for all who remain alive.
In USA, social security and health care are different issues. SS can be patched up. Health care is on course to consume the entire federal budget.
Well, after the boomers have died, Generation X and the Millenials will demand their retirement package. The population age distribution will not become a pyramid with the next generations.
> just raise contributions a little bit
A little bit. Lol. In Germany the contributions are quite unpopular, too (and rightly so with 20% removed from your gross income), but the government just increased the tax subsidies over the years. Nowadays, they amount to about 30% of Germany‘s federal budget — on top of all the contributions. How much money do you think does a society need to pay for their retirees to make a redistributive pension system sustainable?
> See, even though you’re ostensibly investing money so you can retire later, what happens in practice is that your money is being injected in parts of the economy to fuel your investment. And ultimately, part of that money will be used to pay currently retired people.
No. You have a weird notion of how capital markets work. In a capital based system an individual saves for his retirement. Money is put aside every month and invested over a long time. The individual‘s money and its returns of investment are used to pay the pension.
You can make this a public system where everybody is forced to pay and even set up a national fund. It can be subsidied a little to support the poor when retiring.
This is how to render this system fair and sustainable.
My point is, you can't eat money. You can only exchange money for food. You can't heat your home with money. You can only pay for energy. You can't drive with money… well you get the idea.
So you're saving now so you can retire later. From an accounting perspective, sure, you increase a number there now, so you can decrease it later. What you cannot do is store actual food for several decades, accumulate enough energy for several decades, or store all the material you'll need several decades from now.
What you'll eat 20-30 years from now will not be taken from the current economy, it will be taken from the economy we'll have 20-30 years in the future. If there's no food there you will not eat, and that's the end of it. Maybe you'll have your money all right, but food will just have become too expensive for you to buy enough of it. (Now I talk at the individual level, but this is obviously a scale thing: some people will eat all right, just not everyone.)
Hence my argument that even capital markets ultimately are a form of redistribution. Because at some point, either the young work so the old can enjoy retirement, or we leave the old to fend for themselves. Or something between the two ends of that spectrum.
When you go from 10 active people to 1 retiree to 2 active people to 1 retiree, you can't solve a problem by increasing contributions by a little.
And no, investing money for retirement is absolutely different from spending it on the retirement.
I've addressed this remark here: https://news.ycombinator.com/item?id=31107334
I am not sure how it works in USA, but in Poland it's similar scheme as in Germany.
Pure Ponzi-like scheme, but if you decline to participate in it, then you go to fail for avoiding it.
Anyway, there are many more people who can join the crypto trend than polish Social Security system. Growth trajectory is downward, and only printing more many can save it from collapsing.
Had 4 points upvoted and now down to 0 points, arguably Bitcoin et al enthusiasts/gamblers who instead of actually responding to my points can suppress my comment from the top of a thread by a quick click of a downvote - giving them a reward, dopamine hit at the same time; ideologues who are financially incentivized to suppress counter narrative and promote their propaganda, whereas I'm not financially motivated or incentivized to spend all the time I have to write out what I do.
The crypto holders would love if the world switched to using the cryptocurrency they’re invested in because it would make them extraordinarily wealthy relative to the average person buying in late.
I don’t understand how anyone can honestly suggest that a gradual changeover to a specific cryptocurrency would be anything other than disastrous for financial inequality.