I couldn't agree more.

The only real value I saw with crypto was for anonymous transactions a la Silk Road. Turns out immutable ledgers aren't the privacy boon we thought they'd be.

It also provides a great way to pay ransoms, which allowed crypto locker ransomware to be monetized and scaled up to a new and exciting level.

I hate crypto.

If I were to receive a ransom payment, I'd much rather do it with cash rather than cryptocurrencies. Using a technology whose main point is to have a immutable ledger of all transactions, forever, seems to be against my interest of wanting to be able to hide the receive ransom transaction somehow.

I think the key is that if you have to pick up money it requires someone to be physically in some location. Where they can be arrested. The rest of the ransomware experience from the attacker side is hanging out in their living room in their non-extradition county. Why ruin a good thing by going somewhere were someone might have a gun.

[Of course an immutable ledger might allow people to use a gun on you in the future, but it pushes the experience into an uncertain and hazy future. Safe to ignore in the present.]

> if you can't realistically use crypto as money (which you can't), then there is no reason to hold it unless it is rising

i'm glad i've been able to convince those suckers over at Mullvad to continually sell me hours for this not-money btc.

They're really going to have egg on their face once they realize how I pulled the wool over their eyes.

The old “Madoff’s staff can buy groceries, no way it’s a scam!”

"Look, they're paying me 20% guaranteed yield! How can this not be real?"

I mean, some cryptocurrency projects do generate revenue and pay dividends because they are selling a service to people, whether it be storing files, transferring data, or running computations (encoding video, training AI models, etc.).

Can you name some of them? I'd be very interested to see what they're doing.

I guess? I will note, though, that if you search for any of the things I said--such as "video encoding crypto"--you'd find them in less time than it took to ask me for a list. Here are a handful of ones I can think off of the top of my head.

Storj, Filecoin, Sia; Golem, Akash, iExec; Livepeer, Helium, Orchid (the last one being mine)

Like, some cryptocurrency projects are working on "big business". I keep hearing that Helium has been getting carrier partners for its LTE hotspot rollout, and its IoT hotspot product is not inherently any more stupid than Amazon Sidewalk ;P.

https://twitter.com/MessariCrypto/status/1514694855070556170

Do these coins somehow actually verify that the storage sellers are actually storing the files they claim to store? If not, the introduction of blockchain to the equation sounds like an unnecessary externality.

Impossible to cheat: Assuming "ongoing storage costs", on every payment cycle, rotate the blocks somewhere else (non-predictably). The hashes are probably stored on blockchain, so the receiver can verify them. So to cheat, you need to produce a collision or miss out on your payment.

Practically that's impossible, since the network would need to swap the whole datastore once every payment cycle.

Say each block is stored on three nodes, then these nodes could each generate a nonce, compute a hash of the stored block (using all nonces as IV) and then vote on whether they still have the original file or not. This is much more feasible, as only nonces and hashes are transferred (a few dozen bytes instead of e.g. 64MB blocks). In that case they can store nothing and instead cooperate to generate spoofed hashes, so you probably want some auditor nodes.

I am not sure why any of these would strictly need blockchain to solve the problem of safely storing data in a pool of untrusted, unreliable nodes.

Yeah, I wonder how their pricing compares to e.g. S3. The Filecoin website claims "hypercompetitive pricing" but does not actuall dress that to numbers: https://filecoin.io/store/#decentralize

It sure is a neat hack if they have changed to PoW to Proof-of-Storage, but whether is it actually usable for real-world applications of storing data at scale?

I think the point of a lot of blockchain tech is not to actually solve a real-world problem. For most of these problems you don't need blockchain or there is little extra value to be derived from blockchain. Most of the time, the real-world problem solved by selling "something something blockchain" is that the person selling it needs to earn money somehow.

Honestly, if you pay me money for, I'd sell you "something something blockchain" if that's what you want me to do. Though shutting up about telling you my opinion ("fuck blockchain") will cost extra.

Not sure about others, but Filecoin uses cryptographic storage proofs to verify that data is stored correctly.

Otherwise I'd agree with you, if there is no guarantee that data is stored correctly, there is no point, might as well use S3.

Indeed, here is an explanation of the proof protocol used: https://spec.filecoin.io/algorithms/pos/post/

I wonder if that has ever been tested by bad actors. For Bitcoin, the proof of how the network is resilient against sub-50% attacks is simple enough.

For the file storage people, there's a bunch of startups (like Storj and SIA) that have an S3-like API but slice up the files and store the (encrypted) chunks on the disks of "miners" who get paid each month for disk space and bandwidth used. Because most were started during the ICO boom they all use a blockchain token, even though there are usually centralized servers keeping track of which client uploaded which file. The clients could pay normal currency to those servers, who could distribute it amongst the miners.

I used to have a spare PC with a 13TB HDD mining Storj for a couple of years and it worked fine, but converting the tokens to currency I could use was a major hassle.

What's the point here? Why would anyone use this over S3 or whatever?

S3 has quite a significant markup over the HW and electricity costs. Sometimes up to 10x, you can see this by how much discount percentages sales reps are willing to apply to cost of storage. Many of these smaller providers charge a smaller markup and are thus cheaper than (non-discounted) S3.

Cheaper storage alone is enough to lure some people away. There are also people that simply hate AWS for reasons of their own and choose a startup provider for ideological reasons. Finally there is the obvious application of encrypted storage, to store material that is illegal in your jurisdiction.

S3 is highly redundant, so there's quite a bit of software and networking alongside the HW and electricity.

And even then, go with Blackblaze or Wasabi or R2 or whatever S3 competitor that is cheaper.

Similar to IPFS or Freebase, these censorship-resistant distributed storage solutions can help oppressed journalists in third-world countries get the stories of their oppression out.

Still sounds useless. Those third world countries aren't blocking AWS..

For child porn

most of the dividends are in the native token (or the blockchain token) which, unless the price remains stable or up, constantly reduces in value

A great example is OpenSea. Their trading volume crashed at the same time ETH prices crashed. A sale of 100 ETH in January earned them $7,500 (@$3k ETH).

The same sale now will earn them $3,000 (@$1.2k ETH).

Selling shovels to prospectors is not the same as being a prospector yourself

In what way is selling video encoding or file storage to someone "selling shovels to prospectors"?

Are people buying it because they think it's fundamentally a good idea? Or because they think it'll go up amid the manic gold rush?

Humorously, if they're investing in your company that mines gold, that seems fairly equivalent to paying you to buy shovels and hire diggers.

Gold does not generate revenue... its still worth 11 trillion

At least you'd still have the physical gold (which has utility) if the price went to zero. With crypto, all you'd be left with is a wallet address.

If the market price of gold goes to zero, then no, by definition it has no remaining utility.

That's also why it'd probably never get close to zero - its utility means it'd always have some value to someone.

Even if we were to come up with a way to produce a synthetic gold, the price of gold would only fall as far the cost of synthetic gold.

Does this line of reasoning imply that if Bitcoin never goes to zero then it must have some utility even if the random person on HN cannot articulate it?

Crypto offers very little in terms of intrinsic value (it's not zero though)

Crypto’s problem is that it has the most actual utility when it goes sideways. Being a decentralizing cash equivalent has some value.

But, it can’t be stable. If it goes sideways long enough to demonstrate utility as a currency, then more people would want it, which would drive up the price and hurt that underlying value.

I think DeFi was an interesting idea with some potential. It seems like nobody was able to come up with a solution that found widespread use, but with the right application it might have worked. But for now, it looks like that window of opportunity is gone. Maybe with the next crypto generation...

The problem with DeFi is that can't be used for financing. Financing requires seizable assets whereas blockchain assets are intrinsically unseizable. It can still be used for things like swaps, but that market isn't very large.

You could create seizable assets if you find a way to create a legal framework that allows you to hold and transfer physical or intellectual property via NFTs. If you could own the copyright to an ape picture, instead of an NFT with the URL to an ape picture, it could be actually worth something.

Trading physical property as NFTs would create a lot of possible applications. I always thought that trading-property-as-NFTs and the insurance market would be the most interesting applications for DeFi.

If stocks and bonds were allowed to be traded as digital NFT-like contracts than true settlement could be completed in ~minutes rather than ~days.

Swaps aren't very large? It's very easily a trillion-dollar market even without the misleading quoting of notional as market size.

Where does this number come from?

Here's one source: https://www.bis.org/publ/otc_hy2111.htm

Reports notional as in the hundreds of trillions and market value over ten trillion.

Unless I'm misreading you and you're talking about defi swaps? Though surely the analagous tradfi market shows the potential there.

These are credit default swaps. I don't know if they are implementable as smart contracts (I don't think so, but I could be wrong). I was thinking about overcolateralised DeFi loans which can be seen as a kind of swap where two parties exchange the returns of two different assets.

What was the best application of defi in your view?

Bitcoin is a quantum leap. In history we have moved from single entry accounting to double entry accounting (the current traditional financial system despite the interconnectedness based on an ancient accounting system) requiring a 3rd party to maintain integrity a system open to and actively abused. Bitcoin is triple entry accounting an immutable trust-less based system. That's a huge huge innovation. The bitcoin token has been valued by the open market and is the fastest appreciating asset in history.

Fiats actually a flawed manipulated system, look over time at how much value the dollar loses in a generation and to countries that have been destroyed by inflation.

This has a high "Jesse, What the Fuck Are You Talking About" energy. The reason Terra fell is because most of the transactions that were supposed to assure its value were kept in a secret double accounting system. And that brought BTC down ~50% which shouldn't happen if it's not held up by magical behind the scenes accounting. There's no 3rd party integrity here and it's not been appreciating for weeks now.

Bitcoin's network has worked perfectly as designed so I'm not sure I understand where your coming from. The coin price will always fluctuate and be over speculated or over sold at times, its what markets do. Terra was described as an attack, I'd describe it as architectural failure and crap for anyone who had money in it.

I mean that it turns out the value of BTC is at least half backed by the original system, just skipping over the standard guarantees. And every other drop in stablecoins affects BTC further. That means for all the tech behind it, the value actually relies on good old fat funds that we hope are legit (but have no way to check)

Most transfers still happen off-network, so it's back to the double entry. Not that BTC is triple entry in any way - there's still two parties on each spend entry.

> Fiats actually a flawed manipulated system, look over time at how much value the dollar loses in a generation and to countries that have been destroyed by inflation.

Inflation would be a nice problem to have for Bitcoin: it would mean that it is de facto money, anchored to the real world by meaningful prices and conversions, and following the trends of actual economy and finance.

Well I guess you have that option with others that came after it. But to me what stands with Bitcoin is it can't be manipulated by inflation and its ledger cannot be tampered with that makes it technically superior to anything before it.

Technically superior for what use cases though?

What? :D