Moxie Marlinspike takes a look at “web3”.
Despite considering myself a cryptographer, I have not found myself particularly drawn to “crypto.” I don’t think I’ve ever actually said the words “get off my lawn,” but I’m much more likely to click on Pepperidge Farm Remembers flavored memes about how “crypto” used to mean “cryptography” than I am the latest NFT drop.
Also – cards on the table here – I don’t share the same generational excitement for moving all aspects of life into an instrumented economy.
Even strictly on the technological level, though, I haven’t yet managed to become a believer. So given all of the recent attention into what is now being called web3, I decided to explore some of what has been happening in that space more thoroughly to see what I may be missing.
Cryptocurrencies are the MLMs and pyramid schemes for nerdbros. They are a complete waste of effort, hardware, and electricity, and literally do not serve any purpose other than drawing in more unfortunate suckers to broaden the base of the pyramid at the expense of the environment.
And NFTs are even worse.
There is definitely interesting technology behind these concepts, but for now, they’re being used for scams, pyramid schemes, and MLMs. Don get suckered into this dumpster fire.
Well said. A few people are making a lot of money and the costs to all of us are huge.
Lol, so much screeching in the article.
I don’t like cryptocurrencies either, and have even called for them to be banned globally in other forums, but I do have invested 5% of my savings in them as a speculative investment, because it’s just dumb not to.
You can scream about how they are supposedly MLMs, but it doesn’t make it so. People in countries like Venezuela use them as currency, criminals use them to move cash around anonymously (or anonymously enough), so there is demand for the things. I am not missing another Bitcoin and Ethernet rise or a possible Cardano skyrocketing when by risking 5% of my savings gets me in.
Venezuela is a good example. There are so many people there surviving on the crypto donations/remittances that flows over monetary networks that can’t be censored or shut down. Many of the cryptocurrencies they use have low to zero fees.
As for criminals using them, it’s worth reminding you that fiat cash is more anonymous that most crypto in use… criminals just love USD notes.
Yes but fiat cash involves moving suitcases full of banknotes through airports and such. With cryptocurrency they get all the convenience of Western Union with none of the regulation/oversight.
Criminals don’t like btc/eth/etc exactly because it’s more tracable, especially now that authorities cooperate with all the large exchanges. The “crypto is for criminals” angle is ridiculous.
Criminals don’t use the large (regulated) cryptocurrency exchanges. But they do use cryptocurrency and they do use smaller less-regulated cryptocurrency exchanges in weird countries. Remember, the blockchain is global so all it matters is to get the cash converted to cryptocurrency.
It doesn’t have to be perfectly anonymous, just anonymous enough (aka difficult enough to trace) so small-time and medium-time criminals have very low chances of getting caught.
It’s like people claiming criminals don’t use prepaid SIMs anymore. They do, just not UK or US prepaid SIMs. They use Pakistani prepaid SIMs which are still mostly unregulated anonymous. They are happy to pay the roaming fees if it means they can communicate anonymously.
Not really. Criminals always find a way to criminal. It is not a compelling argument against cryptocurrency. Noticing that criminals use it is no more insightful than coming to the alarming realization that terrorists use oxygen to stay alive.
https://www.icij.org/investigations/fincen-files/hsbc-moved-vast-sums-of-dirty-money-after-paying-record-laundering-fine/
Its a common misconception that web3 == cryptocurrency. It is not what is typically meant. Moxie does like cryptocurrencies, he wants to add them to his signal app. He just doesn’t believe in this whole dapp ecosystem.
Well, this is false. Moxie actually left Signal due to the MobileCoin controversies. That said, he believes in pure crypto currencies and certain defi applications. All easily available information if you search.
Yes, he announced he left, there was no mention of mobile coin that I read in the news. Maybe it was, maybe it wasn’t. In any case its very very fair to call it his app. He wrote it and basically was the company for years, will stay on the board.
It’s shocking to see how poorly the author understands cryptocurrencies and what the good projects are trying to do. Moxie Marlinspike may be against web3 (me too), but he holds a shit ton of ETH and BTC.
No long-timers believes in web3, it’s just one of many fads, but that doesn’t mean every cryptocurrency is a scam.
In fact, some of them are solving important problems. Yes, a lot of people are making a lot of money, but the same can be said about most substantial tech advances.
Take remittance, for instance. Before crypto, sending money back to loved ones in poor countries meant enriching blood-sucking banks. Now you can send, say, 100 Nano to Ghana and the recipient will receive 100 Nano which he can cheaply turn into fiat at the local exchange or spend it directly. I personally save thousands of dollars a year doing this, rather than enriching banks.
Then there’s decentralized finance which allows people to engage in loaning and providing collateral, i.e. give unbanked and underbanked people a chance at participating. This is already working, DeFi is definitely not a scam even if there are scammy projects.
As for NFTs, it’s per definition a decentralized and immutable digital ownership proof. That’s extremely useful. Thinking that’s only used for scams shows how little understanding the author of this post has.
My thinking is that he missed the crypto train and is now rather angry.
I never “got” NFTs personally. First of all, they are non-fungible, which means you can’t trade on them (which typically happens with fungible assets). Secondly, what good are they for other than being proof of owning what is essentially digital collectibles of uncertain collectible value?
Seems to me the only thing NFTs have going for them is being tangentially related to cryptocurrencies because they also use a blockchain.
Trading NFTs happens all the time. I don’t think you understand what non-fungible means.
You transfer ownership atomically by cryptographically signing the transfer using a smart contract. The non-fungible part means that token A != token B, which is the case on something like Monero where any monery looks like every other monero. But yeah, you can obviously transfer the ownership of token A from person X to person Y. That’s the whole point.
So, technical details aside, it’s basically like owning a unique painting (official proof of ownership and proof of authenticity from Sotheby’s and all). Which only has value if the painting itself has any collectible value,
Somehow, I doubt all those NFTs dumped on the market have any collectible value, considering most people heard of NFTs just because it uses blockchain technology.
Most are worthless, just like most drawings in the world… The valuable ones are valuable because of this: https://cryptohayes.medium.com/rock-paper-scissors-says-go-a3641dfe132c
No mystery here.
Inxi,
I think NFTs are a fad, people are cashing in on the fad now, but I have a hard time seeing it’s viability long term, say in the next century. Copyright over today’s new works will explicitly expire and unlike originals that hold long term value, digital copies can be exact duplicates. The NFT is more like a receipt for the work, but what good is that when you can no longer claim exclusive ownership of the underlying work?
No matter how many thousands or millions someone may pay today, I think all NFTs are ultimately destined to fall back to zero. Physical art is valuable in large part because museums and private collections are willing to pay a lot for originals and people want to see the physcal canvas the artist personally touched, but why would they pay millions for a collection that will only go down in value and exclusivity over time? Just so they can show their cryptographic receipt to museum guests?
I don’t think most people care about receipts, however now that I think about it I think a future museum probably will cover the crypto craze as an exhibit and it might be interesting to see the blockchain studied and visualized in a curated museum setting.
@Alfman
These are my thoughts too on NFTs:
“Imagine I had access to a perfect copy of the pixels that make up this NFT. You know, the same pixels my monitor is currently showing and I can save any moment I want.”
All you get with the so-called “smart contracts” is (in layman’s terms) a certificate that confirms you own the particular drawing. Which brings the question? Who cares about this stuff? Especially when the underlying drawing is of uncertain artistic/collectible value. Looks like something targeted at people with more money than sense.
That said, there are people out there with more money than sense, so there are indeed people who buy NFTs under the assumption they are likely to become collectible one day.
Cryptocurrencies and NFC’s are planet killers.
There are cryptocurrencies, based on proof of stake rather than proof of work, that use far less energy than traditional banking systems. The lack of knowledge on this forum is scary.
Citation please.
So even PoW is cheaper:
https://www.nasdaq.com/articles/research%3A-bitcoin-consumes-less-than-half-the-energy-of-the-banking-or-gold-industries
PoS coins wins hands down:
https://www.realsimple.com/work-life/money/money-planning/how-cryptocurrency-uses-energy
A proper citation not that crap written by people with something to sell backwards rationalising. I wasn’t born yesterday.
Inxi,
No, it’s not even close. Bitcoint is FAR more expensive to run per transaction, it’s actually insane how inefficient bitcoin is and how bad it is for the planet’s emissions when we factor in the amount of work it’s doing.
https://fortune.com/2021/10/26/bitcoin-electricity-consumption-carbon-footprin/
This is a quote from your own link BTW…
It gets even worse as bitcoin scales up, unfortunately.
You’re right to point out proof of stake is better. I’m not sure everyone is aware of what that is…
https://www.fool.com/investing/stock-market/market-sectors/financials/cryptocurrency-stocks/proof-of-stake/
Even a proof of stake blockchain is likely to be less efficient than a traditional transaction processor though because there’s less duplication of work. But at least POS doesn’t blatantly encourage energy consumption to create currency. POW is just awful for carbon emissions, POS is much better than POW, but will probably still be worse than traditional processors.
As others have said thats produced by a very biased source, it also neglects to mention the price per transaction, or include all of the other parts that are required for bitcoin to actually work ( you know the crypto exchanges and all other associated companies that the majority of people use) , and they include gold for …. reasons? Why does anyone think assigning value to gold or using it as a currency is a good idea in the 21st century is beyond hope at point.
So bitcoin uses half the energy of the banking industry when less the 4% of the population use cryptocurrency at all
https://earthweb.com/cryptocurrency-statistics/
and most of them will use cryptocurrency for most of their day to day transactions
Well that’s good, I screwed up my first ever OSNews comment, obviously I meant most crypto users will NOT use crypto for most of their transactions.
The link I gave states that there are about 400,000 transactions a day.
Compare that with old fashioned money.
nitram,
Welcome to osnews!
Don’t worry. Most of my posts could use more proofreading too 🙂
yes, there are. However, which are the two biggest cryptocurrencies in use by market share, and what do they currently use right now?
Bitcoin => proof of work
Ethereum => proof of work.
Yes Ethereum, is working on moving to proof of stake, “soon”. Its been delayed once already, and yeah if you use Ethereum right now, today you are killing the planet.
Instead of defending all cryptocurrencies, you should advocate for the ones that don’t kill the planet and refrain from those that do not.
LOL, such cherry picking. Plenty of energy efficient dpos out there, like Nano. They’ll eventually win.
Its not cherry picking when you choose the largest best know examples. If Nano is better, use Nano. Don’t use bitcoin, don’t use Eth. Or any proof of work.
As much as I consider BTC and NFT not much than money laudering schemes, ETH seems to have something going for it. The concept of algorithmic autonomous financial markets and services could be a game changer if scared bankers won’t shut it down. It could open access to cheap credit to millions of people and enterprises w/o wallstreet getting their rent.
I await eagerly conversion of ETH to proof of stake to see how does it work at scale in the real world in its first year.
I agree cryptocurrencies and NFT’s are speculative and shady (as well as being planet killers). The thing is cheap credit isn’t the nirvana you may think it is.
Debt is really direction of effort and that matters more than this abstract thing we call money. Effort is the real economy, and a free and unregulated market with the turbo chargers switched on is not a good thing. Welcome to price controls and rent controls and earnings controls and tariffs and wealth taxes and all the complicated and messy things which govern a society.
I see all these cryptocurrencies as a tech nerd libertarian fever dream. They’re a fantasy. A well crafted and persuasive fantasy bouncing from nerd blog to nerd blog. The answer to everything and solution to nothing. At least, that’s my view.
Maybe pass public policy so people don’t starve and have to chew their own arms off when they get ill?
No, ETH based credit seems like a good idea because anyone can promise anything right now and doesn’t actually have to comply with any regulations. Where there is an opportunity to take advantage of lax systems of credit, people will take advantage of it.
The article was actually interesting. Coming from a company that is actually doing web3, right now, I can see some of the issues talked about. It’s a good approach to dip your toes into the water to see how it works. It’s a big subject, and honestly there are few really doing web3 fully (crypto, Blockchain, decentralization, real tangible NFTs, solid business). Anyway, reading the comments here reinforce how early it is in the process, and how far there is to go. As an investor it excites me to be investing early. Enjoy learning more guys as this develops.
Oh look. Mr One Post is an (alleged) investor in this junk. Maybe just a marketing bot.
Yes, I’m a marketing bot. I’m marketing ‘web3’, you know from the amazing company that brought the ‘web1’ and ‘web2’. Buy and get two for the price of one! Free shipping!
Please, provide some examples of a good web3 company. I’m highly skeptical as my other posts have demonstrated but willing to change my mind if I’m wrong. Heck, I’ve been wrong before.
If you are curious I encourage you to do research. I believe I’m at a good company working towards this goal. I’m not going to self promote and any company I mention could be misconstrued as such, I think you can see that.
Personally, I’m excited for smaller companies with great products, shying away from venture capital, that leverage Blockchain and NFTs that add actual value to products. Decentralization should be the destination.
I believe, currently, there aren’t many companies doing this well. Many just focus on NFTs, or Blockchain… others focus solely on adding NFTs to their current product… and way too many will shy away from decentalization because it loosens their control / profits. Those are just some of my thoughts.
Yes, I’m afraid random questions to people in the industry ends up with
Q: What are the good web3 apps?
A: ” Well a lot of them are terrible now, but there are some good ones”
Q: ok, which would your recommend?
A: Do your research.
So ok. Flummoxed again.
It is the mining-based distribution process is broken and wasteful. But how do we otherwise go from zero cryptocurrency ownership to a world’s population storing part of its wealth in it? Only then an asset becomes a currency.
A naive approach would be for someone to generate all coins and sell them for existing currencies or gold. The problem with that is such individual/organization would become an owner of an unreasonably large amount of assets and would effectively control the cryptocurrency market.
Another approach would be to give each of 7+ billion people in the world a “coin”. Aside of logistic difficulties, it would trigger a large wealth imbalance, where initial distribution of money would be vastly different from the existing distribution of wealth. But given all problems with mining perhaps this would be a better solution?
The chosen solution was to mine cryptocurrency, that is to allow everyone to create a limited amount of money, and therefore distribute it gradually and fairly. By design this is a temporary solution. When the distribution target is reached, there is no real need to mine the currency any further and by then the currency is distributed (but not created) by people trading with each other. In theory, having sound currency is worth the cost of mining (temporary impact on real economy and environment) but no one anticipated BitCoin would have so many copy cats and that the distribution process would happen during the largest ever asset bubble, multiplying the cost and greatly slowing down the distribution by people hording BitCoin just like all other limited assets.
ndrw,
It seems to me that the growth of bitcoin seems to have revolved around using bitcoin as an investment rather than as a currency. I honestly don’t know that’s a healthy way to create a currency, but you’re right that it’s an interesting problem.
IMHO it’s never going to be fair because some people will start out with way more than others, enough to live as kings. I think distributing it would be better than “mining”, but that would be completely impossible to achieve in practice. Some would never get it while theives would surely get other’s shares. Maybe a DNA based distribution could work where presenting unique DNA automatically entitles one to shares. but you’d still need somebody to actually enforce it somehow. Might make for a good dystopia novel, haha 🙂
I don’t think bitcoin will ever become an everyday currency though. Even if we overcome issues like distribution, carbon footprint, etc, blockchain technology simply does not scale well as a real world currency. As it grows the resources required to run nodes phases out normal P2P miners and replaces them with institutionalized ones. The appeal as a P2P currency is somewhat marred by this reality. Granted, maybe we don’t expect normal users to mine coins or fees, but if corporations and elite end up raking in the lion’s share of profits, it does create some doubt as to whether it’s better than the institutionalized systems that we currently have.
Of course there are problems with today’s currencies, but there are also benefits. So many people have lost crypto money due to wallet and exchange theft with zero recourse. Transactions are too slow to realistically replace traditional cards. Blockchain currencies are nowhere close to being able to handle the world’s daily transaction load. It’s mathematically possible to trade off security for better scalability properties, but it reduces the attack threshold from the current 50%+ control required to own the chain, ownership of which is already very concentrated.
I’m not saying there can’t be any merit, but I do think crypto has been hyped as a sort of panacea. The reality is far more complicated.
Yes, and I think the difficulty of “becoming a currency” has been greatly underestimated. In theory, it just has to be widespread and sought after enough (which it isn’t) and better than existing currencies (which it is). But expecting governments to surrender their main source of power is naive. Distributing a cryptocurrency in the middle of an asset bubble is a double-edged sword as well – it certainly makes it popular to own but it strongly discourages trading with it.
I agree with you on that and the fact that available cryptocurrencies do not really work well as currencies. But I would like to remind you we are still seeing mostly benefits of fiat money (life on credit). The cost of uncontrolled money supply (hyperinflation, damage to productive economy, loss of savings/pensions, shortages of basic products, wars) is yet to come, so when comparing impact of currencies on our lives and environment we should really look at the whole boom-bust cycle.
ndrw,
That’s a valid point, but it isn’t clear to me to what extent crypto would actually help with that. For starters we have to assume “no forks”, but that premise has already been violated even for bitcoin’s blockchain. Look at “Bitcoin Cash” as an example, a fork which effectively gave users the ability to spend their bitcoins on two blockchains. Such forks are inherently inflationary and there’s an incentive to create them. Also the inflation argument only works if we assume there aren’t other competing cryptocurrencies. Currently this doesn’t happen much because of government regulation, but imagine if USD (or your local fiat currency) stopped being the standard for salaries and purchases, it could be a catalyst for the return to “company scrip” of the not so distant past:
https://en.wikipedia.org/wiki/Company_scrip
https://www.appalachianhistory.net/2018/09/company-store-scrip.html
It’s not hard to see how corporate oligopolies like apple, google, amazon would gain tons of power creating defacto cryptocurrencies that consumers would have to buy into and use. There may even be widespread backroom deals with employers to pay staff in these corporate currencies.
Of course this is nothing more than speculation for now, but more often than not deregulation leads to corporations gaining more power and control over our lives. It’s understandable that people talk about the positive changes, but they should also understand there’s plenty of risk too. Not only could switching to crypto prove far more devastating to victims of fraud -lifetime savings wiped out in a single day- but the crypto revolution may not be as liberating as people hoped.
My personal opinion is that we should fix the banking systems more directly without pinning it on blockchain based currencies. I would like to see a non profit FOSS alternative to visa/mastercard. They have held the world back for decades and will continue to do so until their duopoly is broken up.
I also think a technical-only solution is insufficient, which is unfortunate. We’ve already had perfectly good money (gold) and decided to stop using it because we were finding it too limiting. As in: gold didn’t allow us to borrow money and natural resources from our children. Perhaps there is no way around getting a memory refresher every 3 generations.
Bitcoin zealots don’t do themselves any favors focusing on this canard. There doesn’t need to be One Single Currency. There never has been, and I predict that there never will be. And there shouldn’t be. Everything we know about monocultures tells us that it is a bad idea.
When I point this out to these zealots, they usually “clarify” their position to mean that Bitcoin should serve as the baseline for all other currencies. There is a stronger case for this, but again I would argue that it really doesn’t matter. It is like arguing over using a pound of copper or a pound of lead as the standard for measuring a pound.
The real baseline for any currency will always be real world goods. That is why governments cannot simply print reams of it without consequences. And there are downsides to deflationary currencies that are just as serious as the charges leveled against fiat, while sacrificing much of the flexibility.
I’d be fine with the world staying on the dollar, or moving to some other fiat, as the economic baseline. But allowing other choices for storing and using wealth would actually reduce the risk to the world financial system caused by those that worship credit. Credit users are a bigger danger to economies than cryptocurrency, but most people have come to accept it as normal. Yet credit abuse caused ’29, caused ’08. and will likely cause the next crash. Not cryptocurrency.
A healthy diversity of choices, OTOH, offers a cornucopia of benefits. Among the thousands of cryptocurrencies, all have different properties. The baseline used becomes irrelevant when I have the choice of storing wealth in a multitude of ways. Deflationary, fixed supply coins are good for long term storage, and can help individuals weather storms suffered by the baseline currency. An unlimited supply, faster, more efficient platform would be better for “everyday” spending by many people. A privacy coin for buying porn and dildos. A coin that automatically generates and diverts fees & interest to charity or infrastructure could be a way to reduce the tax burden without losing services. &cetera…
dan_sickles,
Ideologically a healthy diversity of choices makes plenty of sense. However because of how cryptocurrencies work mathematically this can actually be quite dangerous. What keeps cryptocurrencies safe is the assumption that no group of miners has more than 50% of the hashing power because if they do they can then control the blockchain, even reversing recent transactions. This risk is mathematically inherent to all crypto currencies and due to how concentrated hashing power is, we’re really not that far off.
https://news.bitcoin.com/5-mining-50-btc-hashrate/
Still, it would be difficult to pull off a 50% attack in practice with popular currencies. However with the smaller crypto currencies, fewer resources are required to attain 50% control. Consider that having a mere 1% hashing power for a large currency can be more than 100% of the hashing power for small currencies. So for the more niche crypto currencies today, I wouldn’t be surprised if the risk of a single pool having >50% capacity approaches 100%. Granted the operators of these pools could be honest anyways but the security offered by the blockchain is technically broken.
Yep, web3 is absolutely a quick grab that is terrible for everyone but for the ones doing the grabbing in the short term.
Most of the ones that started it moved away and I’m amazed people have not caught onto it. They’re about to get a crash course as to why laws exist in the first place.
This is always their undoing.
The article talks about the general thesis being that web1 was decentralized, web2 centralized everything into platforms, and that web3 will decentralize everything again in a way of having the richness of web2, but decentralized. Additionally the article talks about people not running their own servers being a downfall of web 1, along with protocols moving more slowly than a platform.
When I analyze those points, web 2 become centralized due to a few large companies becoming monopolies (Google, Microsoft, Apple) and taking over the Internet by putting all the smaller businesses that provided the decentralized nature of web 1 out of business. I don’t think it required a level of decentralizion where everyone had to run their own servers, but it did require there to be a thriving amount of small business that could offer customers these Internet services. Most small ISPs and MSPs have been taken out by these very large companies, which killed the decentralized nature provided by web1.
When it comes to protocols moving slower, I think that brings along a level of reliability and less breakage that occurs with platforms that move quickly. For example, how many projects has Google just decided to kill on their own accord to leave all the people that invested time in them hanging. The really sad thing is that the only two protocols from web 1 that have not totally being eaten up from the web2 monopolies is HTTP and SMTP. Internet chat started with IRC then continued to be open with XMPP, which got consumed by companies with their own proprietary protocols, such as WhatsApps, Facebook Chat, etc. Internet file transfers started with FTP which got consumed by companies such as Dropbox, Google Drive, OneDrive, etc..
So basically instead of fixing the protocols or extending them, they got replaced by companies with monopoly powers with their own solutions and control to lock-in customers. The only thing that seems to have adapted and expanded over time is web browsers when it comes to HTML, JAVASCRIPT, and CSS. Even that is becoming more of a concern now that every browser uses a single rendering engine based on Chrome. If IRC, FTP, and the other legacy protocols would have been extended over time in a slow but reliable and well thought out manner with support of companies, we might have been in a different situation today when it comes to how centralized the Internet has become. One example of this happening would be the HTTP/1->HTTP/2->HTTP/3 extending. Unfortunately this has not happened with other core Internet protocols to that extent.
Sadly we are now trying to wrangle back control from these large companies, but as the article stated we just replaced one set of limited companies to function with another set of limited companies to function.
I think there are perfectly valid uses for web3 stuff.
* Trading platform using your wallet as a source authentication is nice and super secure. Fixes the “password” problem.
* DNS via ETH contracts secured by your wallet via web3 == Awesome (aka ens.domains)
* Logging images of monkeys as your own by writing them to the block chain via NFTs? Expensive and dumb.
I think blaming web3 as a scam overall because people are using it for dumb scammy things is overblown.
With that said, the price for ETH contracts is too damn high to make it useful.
Web3 isn’t dumb… it’s a novel idea to use your wallet in browser for a source of trust.
NFTs are just a dumb concept and giving web3 a bad name.
Wallet in browser as a source of trust? Oh Lord are you in for a shock.
source of trust not tied to a browser wallet? Oh lord you are in for a shock.
You didn’t really make a counter argument, you just… replied?
Sometimes I waffle,
Sometimes I’m concise,
Sometimes I’m mysterious,
Sometimes I’m nice.
That’s an original I just made up. Copyright, me.
I’m sure an idea can be novel and dumb at the same time.
First they say “never write your password down”, and then they say “use passwords that are too complex to remember”. Then they say “never use a single password for everything” (so if someone gets one password they don’t get access to everything), and then they say “use a single password to unlock a wallet that unlocks everything”. Then they say “Use 2 factor authentication (something you have and something you know)”, and then they implement a fallback in case “something you have” gets lost or broken.
Meanwhile; everything is shifting from “local apps that don’t need authentication because the data never leaves your computer” to “web/cloud crap”.
As a long time tech geek and free software enthusiast, I have been astounded at the negativity directed at cryptocurrency by people I otherwise usually agree with. I understand the concerns about electricity usage, but there are answers for that (proof of stake, better sources of power) and it is being worked on. But the majority of the hostility I see isn’t even about this, and it is pretty obvious that even if this problem is solved, opposition on other grounds would still be an issue.
My basis of support of cryptocurrency, despite it’s flaws, is very simply stated. It mirrors almost exactly another issue currently being discussed on this site: Trusted Computing. I oppose and avoid Trusted Computing on the grounds that “the hardware is not only secured for its owner, but also secured against its owner” (Wikipedia: https://en.wikipedia.org/wiki/Trusted_Computing) Like many, many others in the community, I have no desire to “own” a computer that can work against my interests. I don’t think I really need to explain why – reading the relevant thread (https://www.osnews.com/story/134429/pluton-is-not-currently-a-threat-to-software-freedom/#comments) reveals that many if not most people here agree with this sentiment.
While I could find a way to get by without a computer, I cannot get by without money. So why would I be comfortable storing my wealth where it can be “secured against its owner” and be frozen or taken from me without due process? And the easily verifiable fact is that all banks, all stocks, all traditional credit and fintech solutions – they are all “Trusted Finance” platforms. So while I do have a bank account, I treat it as a conduit, and regard any money temporarily stored there as unsafe from my perspective.
I understand why some people like it like this, but with all due respect, they do not pay my bills. They did not earn my money, and I do not respect their right to audit my activities. If I behave criminally, by all means prosecute those crimes. Short of that, if someone wants my money, I expect them to make a case to convince me to give it to them. It is a shame people followed the example of Elliot Ness, a lazy cop who scored a minor victory but changed the world for the worse.
I would expect people who understand why strong encryption is important, and why Trusted Computing is dangerous, to understand this. If the people against strong encryption, against cryptocurrency, and against other forms of privacy and personal sovereignty win, the Sophie Sholls of the future are well and truly fucked. Call it a libertarian fantasy if it makes you feel better, but these used to be indisputably considered to be liberal ideas.
Eh, I disagree with the trusted computing paranoia for what its worth. Also hugely negative on cryptocurrencies. You’re trading protection from criminals and your own stupidity for *maybe* some protection from government. I don’t think that is s a wise trade for most people in countries with reasonable governments.
If a government wants your money, it will get your money. This is realty https://xkcd.com/538/ Most users of cryptocurrency also rely on trusting one or many third parties the exchanges, and wallets etc.
Personally, I’m a big believer in “to each their own” and in allowing people their preferences. For some people, perhaps even many or most people, the trade might be a poor one. For these people, custodial solutions are entirely appropriate, and I have not called for banning them. As you point out they exist even in cryptocurrency, and plenty of people use them.
But I don’t require those protections. I have met too many people, and studied too much history, to fear only criminals and my own stupidity. There are plenty of other powerful forces to fear in the world, like corruption, jealousy, sanctimonious thinking… human beings are frightening creatures and the law actually covers very little of the worst things we do to each other.
I also happen to hold many unpopular opinions, making my threat surface very different from that of many other people. If I am oversensitive or seem paranoid, this is the reason. I cannot hope to prove it to you, but I have been persecuted for my beliefs in the past. So while I am prepared to bow to the courts, this is not the same thing as having my wealth exposed to the whims of individuals, multinational corporations or extra-judicial authorities, as it is under the legacy financial system.
My objections are not to custodial platforms, highly regulated marketplaces, and the like. There is a real need for many people to have those protections and safeguards, and I am sympathetic to that. However, mandating that everybody use them, or else live in the stone age, so that these people can feel super, super safe is a bridge too far. Now it is my needs and preferences that are not being respected; it is my sense of safety that is being violated. I can hardly be expected to go along willingly and to not explore alternatives.
dan_sickles,
I think bitcoin’s energy problem is a huge part of the dilemma. Proof of stake is interesting, but it’s still unclear that it will take over because the thing that made bitcoin popular with miners is the very thing that makes it so bad: people get to mine coins by plugging in these hashing computers and converting energy directly into money. So POS still needs to prove itself not merely in terms of the technology but also in terms of adoption.
Even disregarding energy altogether there are still all the other technical problems and limitations which some people tend to gloss over, but they’re still there and these are the reasons not everyone thinks it makes a good currency.
Many people have lost bitcoins though and as it becomes mainstream I expect theft could become an even more widespread issue.
Being skeptical of cryptocurrencies is in no way the same thing as being against strong encryption or personal liberty. I for one have been pretty clear that the incumbent transaction and banking institutions are holding us back with monopolistic tactics and poor security, but that doesn’t automatically mean people should flock to crypto. I understand that people have legitimate frustrations with the way things work today, but I also think many of them are naive about the realities of crypto currencies. Things like privacy are elusive when both governments and companies map out bitcoin wallets to real world identities. The people who refuse to cooperate will become criminally liable tax evaders. Every transaction whether from an employer or to purchase a legitimate product or service increases the risk that they will eventually be outed by those who are not tax evaders. Evaders will be tracked down and prosecuted, the evidence against them will be right there in the blockchain. People are sold on the allure of cryptocurrencies as a way to liberate themselves from elite institutions in the hands of the few. Those motives make sense, but crypto currencies are merely creating new institutions, the control of which is already consolidating into the hands of new elites. Power corrupts and I don’t think crypto currencies are an exception.
To be clear, I’m not entirely against crypto currencies, especially if they manage to get away from the energy problems, but sometimes it’s portrayed as a cure-all, which it is not.
I think you’ve been clear, but perhaps I have not. Your observations are fair, and I share some of your concerns. If my enthusiasm comes across as kool-aid induced mania, I regret that. My enthusiasm is not so much for the solution, but for addressing the problems I mentioned. If, somehow, tulip bulbs could be used to solve or at least mitigate these problems, I would be equally enthusiastic, though admittedly less interested in the workings and mechanics of the system.
Cryptocurrency, both as a concept and the various implementations, certainly has problems. I advocate for it’s legality, availability, and use. But I find plenty to criticize, and do so in the relevant forums. Sometimes I can’t tell who dislikes my opinions more – pro-crypto or anti-crypto people. And that’s just about the tech. Don’t get me started on some of the personalities in the community. Some of the worst among us have indeed gathered there.
But I have lived long enough to learn firsthand, sometimes at the cost of pain, that perfect is the enemy of good. The problems that disturb me are here now. They are with us. Cryptocurrency is also here, now. It (mostly) works, and addresses these concerns to some degree. If somebody conceives of a better solution, I am all ears and stand ready to drop cryptocurrency like an old fish. I am all for doing better wherever it is possible.
What I am staunchly against is the idea that the concerns I have are features, and not bugs. Plenty of people believe this, and their belief system requires crushing me, and my concerns, under the heel of their boot. So you’ll forgive me if I don’t feel too kindly towards them, and their own concerns. Even if there are more of them than people like me.
I am also in opposition to the idea that, because cryptocurrency has problems, “we” should scrap it and wait for a better answer. I agree that people that preach it as a cure-all are taking things too far. If you’re bald, it will not give you hair. There are very real social and political problems that are not addressed and, yes, perhaps even worsened by cryptocurrency. But while a stick is less ideal than a hammer for driving a nail, it is surely better than using my fist. Or, as in this case, to “just live with” those problems that you concede exist, trusting others to play fair and hoping for the best. I already know that most will not play fair, just as soon as it suits them. As you point out, power corrupts.
dan_sickles,
I don’t have an issue with your opinion either. I mostly responded because you asked why tech & FOSS people would express such a skeptical attitude towards crypto currencies.
I think a lot of cryptocurrency’s advocates only talk about it in an idealized fashion and not necessarily a realistic one. I’m still very concerned about cryptocurrency fraud and scams because all of the laws on the books to protect consumers from theft become unenforceable and go out the window. It easy enough to say that’s not our problem, but if we can’t have oversight somehow then it’s going to be a huge problem for society. I’m not trying to hold preconceived notions against crypto, but I think the risks of catastrophic loss are very high for ordinary families.
Take something as common as inheritance, how do we distribute bitcoin assets to those who legally inherit it? Do we expect families to just take the loss? Should everyone in the family have access to each other’s crypto wallets? What if the kids are still too young to be financially responsible? Maybe there needs to be an institution to protect your wallet and make sure your family gets your property on your death…see what I’m getting at?
I think there are lots of ways to improve banking and credit services without having to resort to cryptocurrencies…in my view the problem isn’t the lack of solutions so much as the lack of good governance.
Alas it’s hard to overstate the corruption, we’ve even got police and law enforcement agencies in the US whose activities meet the literal definition of theft and will take thousands of dollars from their victims without any allegations of a crime.
Here are particularly egregious instances that made the news, but it happens all too frequently.
https://www.youtube.com/watch?v=MsIxzQXdWzY
https://www.youtube.com/watch?v=MkeS_0NQUZs
I feel really bad for these guys, it could happen to anyone. The veteran clearly had a lot of trust for the police and they royally screwed him for being honest. The were unscrupulous. US agents even gave my uncle trouble over a credit card when they asked him about it’s credit limit. If he was carrying cash I have little doubt he would have lost it.
Cash is too risky to carry around in bulk. Crypto seems much safer than cash for people who don’t believe in banking. I do wonder if people in the future could end up being deprived of their devices under the same censure laws though. Why police are allowed to get away with this is beyond me though. I was utterly stunned when I learned about it.
* As an aside, in the US you should never consent to a police search because you loose a lot of legal protections in court that way. They are not allowed to search without cause and judges will side with you if they lacked cause. Otherwise they don’t need to prove cause if you gave consent.
Unlimited jail sentences are the inevitable solution for people who want to store their wealth beyond the reach of the courts.
Liberal is an often abused term which means different things in different jurisdictions. A liberal minded person could be progressive but usually only to a degree. Liberal is more a right wing thing and often deeply wired into a class system with consequences like mill owners versus cap doffing peasants and all that goes with that.
The question really is why do some believe cryptocurrency et al is a solution? They never give reasons other than handwavy paranoia often fueled by decades of right wing media indoctrination. This alleged freedom they crave? Don’t they realise the kinds of right wing people who behind the scenes groom and prop up and fund populist authoritarians and who throw them trinklets and whom they slavishly follow because that is worth more than the loaf of stale bread in their home are laughing at them? Why do they believe cryptocurrencies are a solution to this? Why do they believe cryptocurrencies are an answer to abuse of power, or restriction of rights, or gerrymandering? Why? Why do they believe cryptocurrencies would prevent another Holocaust? Why?
The more I read this site in the last year, the more I think Thom is my spirit animal. I can’t stand hearing anything about “web3” and whatever this new definition of “crypto” is. And anyone who dares question it all is suddenly swarmed by crypto bros and other associated snake oil salesmen. Leave me out.
Folding Ideas just came out with an excellent two-hour deep dive on cryptocurrencies, web3, NFTs, and everything else in that sphere called “The Problem With NFTs” that I highly recommend watching:
https://www.youtube.com/watch?v=YQ_xWvX1n9g
The TL;DR which he addresses in great detail is that the technologies don’t really solve what they often claim to solve, the problems they do solve aren’t really very useful to solve, there are a ton of flaws, the people behind them are essentially rich programmers, frustrated at having been frozen out by the ultra-rich, who are trying to synthesize a new opportunity to become the next Bill Gates or Jeff Bezos, it’s all fundamentally a zero-sum game with the profit potential best described as a “bigger fool scheme”, you almost never want truly immutable storage on a global scale, the effect is to try to turn everything that can’t currently be speculated on into a vehicle for speculation and gambling, and the whole thing has become “Amway, but with everyone wearing ugly-ass ape drawings”.
(It’s two hours long because it’s also an excellent primer on all the relevant concepts and history.)
I don’t disagree with the thesis you summarised. There is also the matter of the law. How is “immutable storage” going to navigate human rights legislation? Environmental concerns? Fraud?
I’ve been watching my share of multi-hour long videos myself. One I watched tonight discussed a few points including the concept of society based on shared truths as opposed to fringe views such as flat earthers anti-vaxxers, and all the other silly nonsense. There was one wet behind the ears guest on the show who was trying to peddle disruptive libertarian ideology with all the zeal of one of these born again coders. He was very forceful and gee-whiz in a hurry but the well regarded social commentator guest on the show was having none of it. I personally thought the host let him off lightly but I’m pleased he was countered effectively.
I’m old enough to have heard it all before so long past needing primers on anything but they can be useful for people other new to a topic and those who are still learning their way through life.