- Linus Torvalds, creator of Linux, does not believe in cryptocurrencies, calling them a vehicle for scams and a Ponzi scheme.
- Torvalds was once rumored to be Bitcoin creator Satoshi Nakamoto, but he clarified it was a joke and denied owning a Bitcoin fortune.
- Torvalds also dismissed the idea of technological singularity as a bedtime story for children, saying continuous exponential growth does not make sense.
It’s interesting to see Torvalds emerge as a kind of based tech hero. I’m thinking here also of his rant not long ago on social.kernel.org (a kernel devs microblog instance) that was essentially a pretty good anti-anti-leftism tirade in true Torvalds fashion.
EDIT:
Torvalds’s anti-anti-left post (I was curious to read it again):
I think you might want to make sure you don’t follow me.
Because your “woke communist propaganda” comment makes me think you’re a moron of the first order.
I strongly suspect I am one of those “woke communists” you worry about. But you probably couldn’t actually explain what either of those words actually mean, could you?
I’m a card-carrying atheist, I think a woman’s right to choose is very important, I think that “well regulated militia” means that guns should be carefully licensed and not just randomly given to any moron with a pulse, and I couldn’t care less if you decided to dress up in the “wrong” clothes or decided you’d rather live your life without feeling tied to whatever plumbing you were born with.
And dammit, if that all makes me “woke”, then I think anybody who uses that word as a pejorative is a f*cking disgrace to the human race. So please just unfollow me right now.
Holy shit, the crypto bros are really triggered by this, out in full force in the comments. If the only argument you can bring for crypto is that you make/made money on it, that sounds a lot like a Ponzi scheme
It is a Ponzi scheme. Very clearly one. How that garbage is legal, I will never know. I could have gotten into crypto from the ground floor eons ago and made tons of money but I didn’t because I knew it was illegal and figured the whole thing was going to collapse as soon as governments found out about it. Imagine my shock when most legitimized the damn thing. Still wouldn’t bother even if I could go back and do it again knowing the brain dead, money-greedy idiots are going to legalize a literal Ponzi scheme because I have values and morals.
Yeah, it’s relatively easy to make good money in crypto if you understand investing. There are a lot of things that are illegal in regulated securities markets that are not yet illegal with crypto.
I intentionally don’t invest in crypto, because it doesn’t produce anything. Any money you make is just taken from another investor, usually because they don’t know what they’re doing. When you invest in a company, you make products and sell them to customers. Something is created and rarely are people cheated.
The people investing in crypto are intentionally cheating uninformed investors in a way that is not possible in regulated securities markets.
When you invest in a company, you make products and sell them to customers.
You mean, executives with “fiduciary responsibility” take extremely irresponsible actions to “maximize shareholder profits” and gut the company that produces those products such that the product is minimally viable, borderline shit, and might even kill the end user (Boeing, Tesla, GE, etc etc). Oh and jobs and the economy are on the line too, so that’s great.
All of that is way more productive than crypto because something actually gets produced. Crypto is literally only gambling and scams, plus it’s bad for the Earth. And I have nothing against gambling, it’s the fact that vulnerable people lose tons of money thinking it’s an investment.
Plus actual gambling is way more fun.
You’re not making the gambling more productive, you’re making the production worse.
That’s why you need to think about the company you’re going to invest in.
Your critique is accurate for too many companies, yes. But by far not for all.
intentionally don’t invest in crypto, because it doesn’t produce anything. Any money you make is just taken from another investor, usually because they don’t know what they’re doing. When you invest in a company, you make products and sell them to customers. Something is created and rarely are people cheated.
Isn’t that the same as investing in any currency?
No one is investing in regular currencies. You’re supposed to use it to buy stuff.
No, people absolutely do invest in currency. It’s quite a big thing actually.
https://www.investopedia.com/financial-edge/0412/the-basics-of-currency-trading.aspx
Forex traders are shocked.
See, the real crypto people are not in it for the number go up. They are in it for the technology and the human freedom that it can bring. So we don’t like those people either.
Then it’s weird how they keep telling me how much money they’ve made (and even sometimes ridiculing me for choosing not to participate).
I mean, hell, I would like you to participate too. But I understand that may not be your thing. And that’s okay. I don’t want you to participate for some number go up mad gains stock casino thing. I want you to participate because I seriously believe that Monero can help move human freedom forward by eventually replacing government money.
I don’t have a problem with government money. If the government money no longer has value, I’m fucked regardless.
I mean fair enough just that another money could get you out of that situation before it gets that bad. If nothing else than through bribes.
How many people got in early, made some money, lost it all getting scammed or just making bad choices, and will spend the rest of their lives chasing that dragon? How many drunks are at some bar right now talking about how much money they could have made if they had waited to sell, or how much their nft portfolio is gonna be worth when the market rebounds?
I actually had the same thing happen to me because I discovered Bitcoin in 2011 and dismissed it as crazy and that the governments would never let it exist. And then several years later heard about it again in a news article and was like, wait, the government hasn’t shut that down yet and started doing some reading and really understood
I mean not to mention the ridiculous amount of electricity it uses, and heat generated. but hey it’s low priority even though every year lately is the hottest in record.
For clarification. To my understanding, the older cryptographic currencies use an immense amount of power (Proof of Work). But newer models have solved that issue by switching to a Proof of Stake model instead.
You are correct, but that doesn’t mean they all use the same model. Apparently in the USA, it’s as much electricity as the entire state of Utah. Also apparently Texas is a big home for it:
Locations of 52 U.S. cryptocurrency mining operations, as of January 2024
So you’re saying it’s “Hot! Hot! Hot!”
Fully agree. I think there exist both good and scammy-bubble types of blockchain and crypto. Crypto can be a scam, memecoin rugpull, ponzi scheme, …etc, but it can also be the peer-2-peer decentrilized self-custody borderless international currency of people away from governments manipulation, inflation, banks and middlemen, which is something that has its own advantages and negatives as we’ve seen it with criminals, tax evation and money laundering, but also used by people fleeing war zones after their banking come down and escaping trumbling government fiats. However, it also needs regulations and the protections of world governments to work but also claims to want governments and regulations off.
To clarify my position honestly, I think blockchain programming is here to stay but today 99% of it including BTC could be the scammy bubble type and does not represent or have most of the therotical advantages of the bitcoin’s original white paper which I listed above.
I agree. Every crypto except XMR seems to be only seen as an investment to make more money.
based monerochan pfp enjoyer
Why XMR and not BTC? Do the privacy defaults change how it’s seen?
BTC is not private. XMR is actively being used mainly on the darknet because of its superior privacy guarantees. BTC is mostly sold and bought just like investments.
BTC is solely a mode of investment, it offers no real benefits over fiat except decentralization. At least XMR is as or even more anonymous than cash, whereas Bitcoin has zero utility.
If there was a way to use Bitcoin more privately than USD cash, would that give it utility?
Yes. I suppose it would also have a sort of utility if it was mass adopted and therefore practically spendable for the average person, but I would argue that there is no inherent utility to Bitcoin.
Trust me, real crypto people hate those guys as much as you do.
Nope you must be trying to make money off me /s
Alright, as a crypto entrepreneur myself, I’ll bite and try to break down exactly what the appeal of crypto is. But b4 I do I would appreciate some updoots since I have a new account. Anyway, crypto, it’s a way to do transactions anonymously. You know how when your wife frequently accesses your bank account to meticulously track every offbrand sex toy you get on temu (at least mine does, filing a divorce at the time of writing, just trying to keep custody of the kids even though they hate me) so you can feel the sensation of plastic child labor alone in your bedroom? But yeah I don’t really use crypto that much personally, too many scams.
Cryptocurrencies in general are not anonymous. There might be exceptions, but all I’ve seen is pseudonymity. And an eternal backlog of every transaction ever, i.e., if your identity gets revealed for a single transaction, it will get you revealed for every transaction you ever did.
This is what Monero is designed to fix.
No, given that privacy can be turned off.
No, it can’t. It’s built into the protocol and enforced. On other currencies such as Zcash, you can turn off privacy if you wish. But on Monero, it’s not possible to opt out at all. You either have privacy or you don’t use it at all.
They downvote because they hate what they don’t understand, not because you’re incorrect.
To the crypto haters, take a real 5-10 minutes to learn about Monero and see if you can apply the same hate afterwards.
Oh, I know. And for pointing that out, you will get downvoted as well.
Or you can record yourself buying stuff holding a newspaper and your ID.
lol nice rage farming 10/10.
The fuck is a crypto entrepreneur?
It sounds a bit like when arbitrage entrepreneurs were hoarding toilet paper during covid.
I fucking hate that the crypto currency ghouls have captured the word “crypto”. When I first read this I was wondering why in the fuck would Linus not like cryptography. My brain is old and crypto will always mean cryptography.
Smart man!
The modern tech industry needs the old Linus to pay it a visit. Too many grifts
Linus Torvalds, creator of Linux, does not believe in cryptocurrencies, calling them a vehicle for scams and a Ponzi scheme.
To be fair, that’s because Crypto is a vehicle for scams, and a Ponzi scheme.
The line about safety regulations being written in blood? Financial regulations are written in bankruptcies.
I’m not gonna put my foot down for either side here but, to be completely fair here, so is for example the us dollar.
I’m pretty sure most scams and ponzi schemes use US dollars.
Interestingly, for a currency to actually be useful, there needs to be a demand for it, something that you can only pay for in that currency. For real currencies that is normally taxes. England only accepts taxes paid in pounds, so there’s a demand for pounds from every person who has to pay taxes in England. For crypto, extortion is basically the only source of demand.
Sure, occasionally there are places that accept both real currencies and crypto currencies, but for legit businesses almost none of the revenue comes from the crypto side. But, for ransomware, etc. the hackers only accept crypto. That means there’s a demand for crypto, which means that it has some value.
My drug dealer only takes payment in crypto and I think he’s too lazy to extort anyone.
Ok, so ransomware and illegal goods, that is the demand for crypto.
do not forget unregulated crypto casinos
It’s mostly a threat to the state’s tax revenue and power.
No, no it isn’t.
It is a threat to the finances of any crypto user:
Crypto means cryptography, stop using it to talk about cryptocurrency.
good luck, I’m sure this comment will change how everyone talks from now on.
Crypto means hidden, stop using it to talk about cryptography.
It’s also sometimes used as shorthand for crypto-orchidism -undescended testicles.
Ahh, so… crypto, which is based on crypto, can be used to pay for treatments to crypto.
Got it.
Crypto currencies doesn’t mean “hidden currency”, it means currency based on cryptography.
Do you mean to say that crypto is based on crypto? Crazy!
They meant that choosing one possible definition and saying it’s what the word means is stupid. Words mean pretty much what everyone agrees they mean. Look at all the words that have basically flipped definitions since their inception. Just because the modern derivative of a word means something literally everyone understands but is slightly different than what it used to mean doesn’t mean the oldest answer is the correct one. Unwad your jock.
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Is it not clear which definition of Crypto he’s using?
Linus coming out against cryptography seems so unrealistically silly to me that it’s not even worth considering.
The security of Linux 2000 will be based entirely on steganography, Linux founder announces
Yeah, that headline is very misleading. Crypto(graphy) is essential for the digital world to exist whereas the other stuff is a pyramid & money laundering scheme.
It’s not “misleading,” because the vast majority of people understand what the current colloquial use of crypto is.
Not the nerds on Lemmy.
A certain irony in a synonym for “secret” being a term everyone’s implicitly familiar with.
It’s useful for buying drugs online on the dark web so I for one like it
my man
All the fentanyl you can snort.
Which market are people using nowadays? I haven’t kept up to speed over the last few years.
“Have you invested in crypto?”
Do you think anyone anywhere will misunderstand this as investing in cryptographic research/development?
The mainstream usage of the word isn’t always aligned with what is good for society or even the original usage of the word.
I guess I’m getting old then 😜
So the equivalent of the population of the United States plus 40% are money-londerers. Because somewhere between five and seven percent of the world’s population uses cryptocurrency and that’s 400 million to 550 million people.
I doubt it
Increasing demographics might initially be attributed to a rise in the number of accounts and improvements in identification. In 2021, however, crypto adoption continued as companies like Tesla and Mastercard announced their interest in cryptocurrency. Consumers in Africa, Asia, and South America were most likely to be an owner of cryptocurrencies, such as Bitcoin, in 2022.
That’s functionally the nut of it. People in countries that lack a traditional western banking sector but enjoy internet access can piggyback on the network of banks with crypto-interfaces. This is more a consequence of the unregulated wing of the financial sector than an raw utility of cryptocurrency itself.
If WellsFargo won’t ratify me as a client, but Coinbase will, I’m stuck dealing in bitcoin simply because I can’t get a credit card denominated in USD.
No some of them are the marks.
But if we want to play bad faith statistics games then 5% is roughly the percent of Americans who have gone to prison.
Cryptocurrency is a currency based on cryptographic keys.
That’s like asking people to say kilograms instead of kilos
Ok based upon one dude’s opinion I’ll purposely create a communication problem between me and anyone who ever tries to discuss this stuff with me.
Or I could just toss this opinion in the garbage…
Decisions decisions
Never heard it commonly used as a short form for “cryptography”. But did hear it commonly used for “Cryptocurrency”. Why not let the morons have it? Do you have a scam running that relies on “Crypto” being short for “Cryptography”? Using “cool” brevs is the mark of the amateur anyway, if someone said “crypto” to me when he meant cryptography, I’d forever judge them as a silly person.
Before 2010 it was almost exclusively used to refer to cryptography, outside of some even more niche fields (parts of biology, political sciences, etc)
I run /r/crypto on reddit, for cryptography, and the spam is horrendous and the flood of idiots is never ending
You are aware that the “crypto” part of cryptocurrency is short for cryptographic, right?
No I’m not
Ah ok, sorry
Wait… whose the moron here? Lol
If after 16 years you still have to be asked if you believe in crypto, then chances are that it is a scam.
The focus of what Torvalds said is the concept of tech singularity. TL;DR “nice fiction, it doesn’t make sense in a reality of finite resources”. I’ll move past that since most of the discussion is around cryptocurrencies.
Now, copypasting what he says about cryptocurrencies:
For the record, I also don’t believe in crypto currencies (except as a great vehicle for scams - they have certainly worked very well for the “spread the word to find the next sucker holding the bag” model of Ponzi schemes). Nor do I believe in Santa Claus, the tooth fairy, or the Easter bunny.
For those who understood this excerpt as “Tarvalds thinks that cryptocurrencies dant ezizt lol lmao”: do everyone a favour and go back to Reddit with your blatant lack of reading comprehension. When he says that he doesn’t believe in them, he’s saying that he does not see them as a viable alternative to traditional currency. (He does not say why, at least not in that message.)
And for those eager to babble “ackshyually ponzi schemes work different lol lmao”: you’re bloody missing the point. He’s highlighting that a large part of the value associated with cryptocurrencies is speculation, not its actual usage. Even cryptocurrency enthusiasts acknowledge this.
I apologise to the others - who don’t fit either category of trashy people I mentioned above - for the tone. Read the comments in this very thread and you’ll likely notice why of the tone.
Nor do I believe in Santa Claus, the tooth fairy, or the Easter bunny.
How we supposed to get people to switch to Linux with this guy spouting nonsense? /s
Nowhere does he say that he doesn’t believe in Wunterslash, so I’m cool with him.
The vast majority of the crypto world failed to understand one key concept, money is not the value for which goods/services are exchanged, it is the value by which they are exchanged. People do not have a use or value for money beyond what it can be exchanged for, if no one is willing to exchange for it, it has no value.
Crypto only had value as a currency if people would accept it for goods or services, and the only thing people ever accepted it as payment for, in any meaningful capacity, were illegal goods and services. The value beyond that was purely based on a speculative ideological assumption that people would abandon the traditional banking system for a new system that they couldn’t buy anything with.
the only thing people ever accepted it as payment for, in any meaningful capacity, were illegal goods and services
That used to be true. Hardly any BTC is being spent on drugs nowadays. It’s not anonymous enough. However, people are buying high value items like real estate and luxury goods with BTC.
Bitcoin is mostly being spent on electricity and new hardware.
Bitcoin is mostly being spent on
electricity and new hardwaremore Bitcoin.Ftfy
most of the bitcoin being spent on electricity and hardware gets exchanged for actual currency before it is spent. And most of the luxury goods sales are gimmicks and limited time.
And there is a huge amount of criminal activity with bitcoin still, they just mainly use it to launder money now as the transactions are impractically slow and costly for anything but particularly large trades.
“The multi-chain era has had a sweeping impact on the distribution of illicit crypto volume as a whole, where Bitcoin’s share plummeted from 97% in 2016 to 19% in 2022. In 2016, two thirds of crypto hack volume was on Bitcoin; in 2022, it accounted for just under 3%, with Ethereum (68%) and Binance Smart Chain (19%) dominating the field. And while Bitcoin was the exclusive currency for terrorist financing in 2016, by 2022 it was all but replaced by assets on the TRON blockchain, with 92%.”
TRM illicit crypto ecosystem report 2023
I don’t know much about crypto but this doesn’t seem right?
Didnt it hit an all time high recently? All while no one is using it to buy anything anymore?
A coin is worth what someone will pay for it, and people are paying lots because they think it will be worth more later.
It has no inherent value or utility.
Not sure if has hit all time high, but I doubt it. But even if it did, the reason why it did is pretty simple. It’s unregulated and a scam. So, get a bunch of sociopaths and let them target people, get them to invest in crypto and then they will be able to sell their own imaginary money to these people for real money. This is how it works in its most raw form. Someone invents monopoly money, convinces someone gullible that it’s the future and sells the people the monopoly money for real cash.
Of course there’s a whole bunch of obuscation and hype talk to hide what’s really happening, so it’s not immediately obvious to those people.
Muddying the waters is also the small group of true believers who really think that it’s only matter of time when the monopoly money is going to take over and via the power of magical thinking completely fix capitalism and the rich bastards who have money instead of them.
So the signal to noise ratio is pretty bad for really seeing what is actually going on.
Which is EXACTLY the same as all other fiscal vehicles. Except in the case of USD, the group of sociopaths you describe are the elected representatives of USGOV. What defines money as real, Vs not real? The fact that it’s backed by the central bank? Is that actually a good thing and positive for anyone? Decentralised finance as a concept is a good thing. Sometimes it takes a little froth for something to take hold. I’ll bet there were a bunch of people who said similar things about trading shares and futures trading. You can argue that both of those things are ultimately scams. They are legitimised only due to the fact they make capital. Crypto makes capital. And it’s now easy to swap between fiat and crypto.
I LOL at OSS people who say that a government backed crypto currency is a good thing. Explain how monolithic control of finance is good for everyone. Please
Ok, no, Crypto in any form is bad. But unregulated is not an improvement.
Also, money has always since the very beginning been monolithic control finance, the first money were printed by kings. There just were a lot instability with the coins.
The other options are not to have capitalism at all, go back to bartering, or reach the hallowed myth of post-scarcity.
You are ignoring the huge number of crypto, or to be more specific, Blockchain projects that have inherent utility. There are many, and few will survive but some assuredly will. I do believe in DePIN as a concept, and I think it’s likely the immediate future. And it’s not the only buzzword that does actually have potential. Quantum computing seems like Fusion to me. Always a mere decade away, with only a few insurmountable problems to solve.
Decentralised does not mean without governance. Many of the newer lesser known tokens are governed by the projects they are used for. This, I believe, is a good thing, Each project returns us closer to a world where currency is linked to tangibles. And the control remains with the communities that built them.
Imagine being a business that trades with other nations, and the collapse of the government in the country you operate in results in a once profitable business losing 100x the value of the product over night.
It’s harder for that to happen with tokens linked to the businesses that offer a good or service.
How are we now linking crypto to anti capitalism? It’s quite the opposite and it’s nothing to do with a post scarcity world ideal. I do believe that crypto currency will return finance to something that is closer to the people that use them, and provide a means to involve people more widely, give them a stake, if you will, in the policy surrounding them.
Any centralised regulations need to focus on preventing fraudulent systems. And they are innumerable, which is how we end up with statements like Linuses. I suspect you’ll find this comment ages like Bill Gates and his infamous statement about networking.
It got the initial true push as an anti capitalist reaction, well if we ignore the scammers and gamblers. But more in the sense that “hey you got money but I don’t have any so imma make my own and be just like you”.
Also when did I ever link it to post scarcity? I said, the only “solution” to monolithic money is either bartering or post scarcity, or abandoning capitalism in some fashion.
Crypto is just another immutable database, except shared. It’s not a silver bullet or solution for… anything really. The validation methods are cute or terribly resource intensive and they add no real value, aside from consolidating power within the network.
That is not true, for the vast majority of the history of money it was based on a commodity that was valuable in its own sense. It is only in the last century that we have begun experimenting with currencies that are not pegged to the value of a commodity.
Cryptocurrencies derived their value from being a network of users (metcalfe’s law) so they are more like a commodity money. Thing about something like Meta, which has a valuation in the trillions despite its physical assets not be worth nearly that and its functionality as a website being easily replicated on an alternative platform. The users are what is valuable.
for the vast majority of the history of money it was based on a commodity that was valuable in its own sense.
True, but using grain or tools as a currency would make the modern financial system pretty much impossible. Even for simple banking, you need something small and light like gold or currency notes.
Its just a big money laundering scheme
And/or a fucking casino
A bad one, at that. I think the reason many governments are going with it is because it’s far less untraceable than some idiots like to believe.
So you are saying more than the population of the United States as money launderers because somewhere between 400 and 550 million people use cryptocurrency. I kind of doubt they are all money launderers.
Why not? Couldn’t crypto be enabling money laundering on a massive scale?
This one is a bit old, but… https://medium.com/@MUBC/privacy-coins-debunking-myths-about-illegal-usage-9150c49a31a7
I can’t find it at the moment, but I saw a report for 2023 or 2024 that something like 0.4% of all crypto transactions are illicit activity. So that would mean roughly 1.9 million people use it for such activity, which is a far cry from 400 million.
Oh yeah? Then explain this!! /s
I actually considered a non-governmental, community regulated currency as a pretty good idea.
Problem is, crypto is too ecologically expensive and wasteful to fit the bill.
While there were some interesting ones, that actually used the processing power for something useful, most are not. So for now, I’ll just go with governmental currencies.
I actually considered a non-governmental, community regulated currency as a pretty good idea.
That goes against the entire history of currencies. Every successful currency in history has been controlled by either the state or a religion (which was effectively state-like).
That goes against the entire history of currencies.
How come? Decentralized currencies were in place long before the dictators enforced their own private currencies on to all their subjects.
Decentralized currencies were in place
Uh huh… like when?
It does go against the history of currency. And most of that history tells us why it’s a good idea to democratize currency.
It’s also an impractical idea because most governments would not be happy about it.
And most of that history tells us why it’s a good idea to democratize currency.
No… that history tells us that currency only exists when there’s a state / religion in control. There’s no reason for currency without a state / religion. Not only would it not work, it’s also unnecessary.
most governments would not be happy about it
How come?
Energy production companies would be happy no?
Shouldn’t that make at least some govt. happy?It’s because they can’t control it in order to adjust the economy.
Yeah, it’s bad at being a currency. I don’t think it’s a scam or was ever intended to be. It does however suck. Currency serves convenience. Crypto sucks at that.
crypto is too ecologically expensive and wasteful
Only some (proof of work) crypto is ecologically expensive and wasteful.
Oh there’s other’s? Guess I haven’t read enough.
But how to they manage to be decentralised?
Proof of stake is one method I’ve seen, but I’m sure there are others.
Interesting, but, giving it a quick scan, some of them look like based on personal trust and others feel kinda chicken/egg-ish.
And I may need to read it properly first, but “holdings” feels like you probably need to buy some of it first, presumably using some other currency.Yes, that’s the usual criticism. To be able to stake, you need to have currency, promoting a rich get richer kind of scheme.
As long as they use energy they are wasteful, considering they don’t provide anything constructive for that wasted energy which could have been used for better things.
By this argument any website is wasteful. There’s always a “better thing”.
Banks also use energy, so banks are wasteful too
I think there was a potential future where cryptocurrency could’ve actually been useful, but it was ruined by scammers, rug pullers, and of course, speculators.
I’ll still hold a little bit of Monero, since it holds the most potential for being a real currency in my opinion. But otherwise, I fully agree with the sentiment.
It’s always only going to be useful for things like buying drugs, cases where you want to skirt regulation or you really want privacy. Which is fine. It can have it’s niche. Pretending it was ever going to be more than that was a mistake.
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I agree but at least the PoS cryptocurrencies seem to have solved the energy use problem.
When the Wild West was around Medicine was used as a scam too. Snake Oil salesmen aren’t very nice people. But that doesn’t mean medicine is a bad idea ya know?
I agree that there are a lot of snake oil sellers in the cryptographic currencies realm. But that world is basically the digital wild west at the moment to me. I too am waiting to see what happens.
The difference is that medicine, as a concept, is useful.
Is not currency, as a concept, useful? How about transfer of value over vast distances instantly? Is that not useful?
Well know you are just using circular logic. The thing is that cryptocurrencies aren’t currencies.
I hear what you’re saying. But USDC is absolutely a token on many different ledgers that represents a currency.
I’ve been deep in decentralized finance for years as an investor and fulltime software dev. I get the whole “hur hur Bitcoin is dum” but you’re really missing the forest focusing on a tree.
USDC is absolutely a token on many different ledgers that represents a currency.
No, it is a speculative investment. If it were a currency it would be something people were using to buy things, accepting for selling things, using to pay taxes and fines, using to invest in something else, etc.
It’s not a currency, it’s at best some kind of intermediate thing used to buy even more speculative “investments”.
Didn’t you repeat what I said? It’s a token on decentralized ledgers that represents a currency. Like a number in the database at your bank. No different than that.
You deposit your currency at a bank, it’s a number in a database. You earn interest on your investment.
Are you saying that is a different concept than usdc deposited into a lending market on a decentralized ledger and earning interest?
Also, usdc is accepted places. In fact Stripe is adding it as a payment method very soon. Would that make it a currency, or does it have to reach some level of acceptance? What about PayPal balance? Currency?
To me, the difference there is that the jokes about snake oil and homeopathy, healing crystals, or essential oils are roughly the same - e.g. “what do you call X that works and has been peer reviewed? Medicine.”
So far, there has been no equivalent positive usage in the crypto sphere. Medicine, though often administered to different levels, is a good idea in itself.
Actually, for most uses of crypto it’s attempting to muddle in and “add” value to a previous known-good thing. Is the comparison here that crypto is snake oil currency, snake oil databases, or snake oil contracts? In every case, to me, crypto is the snake oil salesman trying to sell you the brighter tomorrow - without adding anything positive, and often getting the heck out of dodge (or folding a company and moving on to, e.g. LLMs) before delivering on promises.
Now a days we peer review medicine. As I mentioned, in the “wild west”. There’s no peer reviewing. The metaphor of the wild west was also pointing out the infancy of a technology. Another example could be how the “self driving cars” aren’t actually that self driving. However I suspect that over time even those cars will actually become peer reviewed, functional and what not.
The example that I saw that I liked the best was video games. Just because someone sells bad video games. Doesn’t mean all video games are a scam. Ya, know?
The problem is that snake oil stuff was (mostly) solved not because snake oil salesmen decided to be nice and close up shop, but because regulations and laws were put in place to protect people from them.
Likewise, we’ve seen crypto get hit with pretty much every issue that has ever afflicted fiat over the entire history of money. The only reason we’ve seen anyone get punished for it is because governments still have some jurisdiction over crypto traded by their citizens. People will say “but smart contracts!”, but the only proven way to be safe with those is to verify the code is both bug-free and not malicious, and that’s a lot to ask of someone trying to buy dog food. A lot of exploits have been executed on contracts that were marked safe by audit companies.
I think the idea as a concept is interesting, as I don’t exactly trust the government or banks either, but I trust random black box companies and individuals a lot less.
Like I said. It’s the wild west in that sphere right now. No rules no nothing. But I also think that even the wild west was tamed over time. Meaning I’m not sure if it will stay so unregulated forever.
Right, but the wild west was tamed by increasing regulation, which is precisely what crypto fans want to avoid. The truth is, though, most people won’t trust crypto without some kind of centralized authority guaranteeing that their money is safe, whether that be a government or a private entity. This pretty quickly materialized with the NFT craze, which saw the vast majority of NFTs were created on the same two sites, with only the biggest names having their own domains and redundant storage for their images.
All the ‘advantages’ to crypto seem to me to really be ways of avoiding regulation (or are only advantageous without regulation)
That may be true. To me, however, not all regulation are ethically or morally sound. I hear people in countries with corrupt governments can use these new fangled monies to avoid the regulations/sanctions put on their countries.
The example that comes to my mind was some guy in Turkey buying medicine. I guess Turkey isn’t allowed to trade many countries because they government is corrupt? And this person was unable to get the medicine they needed in Turkey. Only way was to in port I guess? So they converted their local turkish currency to something the medicine maker would accept.
I can’t really verify such claims but seemed like an alright “breaking of the rules”.
That’s definitely true. I’ve always liked the concept, but never bought into this hype around the speculation, which really gives it a bad name.
That’s why I think Monero is really the way forward to a good cryptocurrency. It’s price is fairly stable and makes more sense than Bitcoin in many ways. I’d use it more if there were more vendors using it. The most I’ve done with it is buy a Mullvad subscription.
Cryptocurrency is a useful technology that has some real-world use cases - for example, living in Russia, I use it to circumvent sanctions to donate to some of the crypto-friendly creators, pay for a VPS abroad, and I keep calm knowing I can transfer money to my relatives abroad.
However, it is obviously not the answer to how we should build the financial system. The problem is not environment, actually - many Proof-of-Stake blockchains allow to transfer crypto with minimal environmental impact - but the poor on-chain regulation (including taxation, too) and potentially excessive infrastructure, as well as little protections against malicious and fraudulent actors.
Besides, inability to control emission, while helping maintain the value of the currency over the long run, also means that many interventions that can save economy in a crisis are simply not available. And a deflationary nature is known to cause bubbles.
Exactly! My usecase is exactly the same as yours.
While massively flawed, for now it is the most viable alternative financial system we have.
Russians working abroad might find cryptocurrency useful.
And a deflationary nature is known to cause bubbles.
I mean centuries of inflationary monetary policy also caused bubbles, sooo…
Yes, but that was caused by other factors, while deflationary policy directly leads to them as it punishes spending, but rewards accumulation. As a result, everyone sits on a pile of cash, and they either don’t spend it, like, ever, grinding economy to a halt, or start buying, strongly depreciating the currency and forming a death spiral.
I am aware of the basic arguments behind inflation/deflation, and neither is good in excess.
Typically central banks targets inflation of 2% these days, but we all know the real inflation for necessities is far higher (>4%). Inflation disproportionately affects the poorer - rich people have the fast majority of their wealth “stored” in stocks or real estate, which rise in valuation as people rush into these markets to protect the little they have. I’d argue that inflation rates are artificially pushed far higher then is sustainable, simply because those who decide are the same people who benefit the most.
I consider a low but predictable inflation rate about 1% ideal (0-2% is acceptable short term variation) for the following reasons:
- No one has to worry about debasing/devaluing your currency by injecting more supply.
- Nobody “passively” gains wealth by sitting on it.
- If you want to keep your wealth, you have to take some risk and use it.
- Inflation rate is not so high, that you need super high risk investments to keep up, making it more accessible to small players.
- Large player can not as easily game the market by skimming of value from the lower to upper middle class.
Yes, this idea is not without risks. But the way I see it the forced “we have to improve value by 2% every year” exponential grow can only go on so long before we (humanity) hit the finite limits of this planet.
Absolutely! Inflation has to be lower, that’s for sure. I’d even argue that the need for inflation is more of a feature of a capitalist economy.
Having to force spending/investment is only important as long as the very economy is built around overconsumption and private investment.
We can absolutely live with a more or less stable currency if we focus on sustainability and put the people first. Money should return to be the means to just get what we need, and we should stop building the economy around creating artificial demand.
