I'll start by noting I am a skeptic of virtually all cryptocurrencies, though I am semi-bullish on crypto-goods, if that makes any sense at all (shorter: Crypto-kitties makes perfect sense to me as a big hit, if not terribly different from rare goods in video games already; ICOs strike me as a great way to take money from inexperienced investors).
The one aspect of this article that the people who are most angry about it seem unable to defuse is that while the blockchain is getting less hackable over time, the irreversibility of its transactions to date (with forkability the only alternative in some cases) is an extreme bug. There's an argument to make that whatever is in the software is the correct judgment, but that's cargo culting. It's making the software the middle man, making software the government, in the absence of a perfect system. That's catastrophic for voting, home ownership, and many other things.
Some might see making the software God as an upgrade over governments of varying corruption levels God. I have my doubts but remain eager to listen.
I can't believe this is the first I'm hearing of CryptoKitties. It looks like blockchain Tamagotchis and I couldn't be happier about that. I also have to admit that I don't really understand ICOs. I've only read about it in passing and it just seemed totally sketchy and nothing that I would ever want any part of.
There is no question that the irreversibility of transactions causes a huge number of issues but I also don't see any way around it and do ultimately believe it is necessary for long term trust in the network. One of the biggest downsides is that handling Bitcoin (or any crypto) is terrifying no matter what methods you employ. You're either responsible for keeping your private keys safe or you're trusting some 3rd party which comes with a whole heap of additional risks and downsides. Moving/storing even a small amount of Bitcoin makes you realize just how much we take the FDIC and other guarantees in our banking system for granted.
So if we need to get insurance companies and government regulators involved in order to make it user friendly then aren't we just back to square one? It's a tough question but I feel there are at least two really important points. First, the technology is truly global and decentralized in nature so anyone can build additional services on top of it and consumers are free to choose who they trust instead of being stuck with a singular government monopoly (way worse in some parts of the world than others!). Also, even if it never takes off as an every day currency, I still feel like the blockchain as a form of "digital gold" has enormous value. The US dollar is designed to lose value over time which essentially forces people to invest their savings. The Bitcoin blockchain is deflationary in nature and at least more convenient than storing gold bars in your apartment!
Quick background/bias for me: I’m very skeptical of the crypto‘s applications; and as this article states, the only intrinsic value is ‘illegal purchases’ and currency speculation. All of the article’s examples are really strong (each has some nuances and references that could be discussed at length). However, this does not cover all potential use-cases. And crypto only needs one, two, or a few proper applications to become legitimately used by everyday people.
A good example is payments: visa/credit transactions are better suited for small, frequent transactions, but what about comparing this to wire transfers? The current financial system is built around an infrastructure that has slowly evolved over decades (centuries, maybe?) to leverage middlemen to verify legitimacy. There are various payment/transaction types, perhaps there’s one that crypto will potentially break through?
Regarding public demand and government regulation: currently there’s no ‘legal’ use-case for crypto, which automatically sets all the regulative bodies against it. If interest, applications, and demand continue and eventually succeed, regulators will have to participate.
As long as people are interested in the technology and investing, the search for applications will go on. It could be good and make financial transactions better for the world of users. Maybe it will remain an illegal haven for funds and continue to be a black market currency. Time will tell.
These are smart comments. Thanks for sharing! I'm genuinely curious to hear the "skeptic" perspective because I, personally, am the opposite of skeptical. (Although I do think that Bitcoin and all cryptocurrencies are probably overvalued right now. The price is likely to drop a lot more in the coming months/years, but I don't care. If they drop to 2k next month, it won't matter to me because I know they'll still hit a million in my lifetime.)
Here's my question: Isn't it enough that Bitcoin is a currency that's not controlled by any political State?
That's what got me initially interested in the whole concept and it's what sustains my belief that this technology is a total game-changer. It's just that one simple fact. Everything else is noise. For hundreds of years we've had to rely on governments to provide us with our mediums of exchange - coins, treasury notes, banknotes, cash. And, in doing so, we have had no choice but to cede full control over our currencies. BTC frees us from that trap.
So why are we still talking about whether or not blockchain has uses? Quite literally, its value is proven by its existence. It's happening. Nothing else needs to be proven. Now we just sit around and wait for the technology (speed, scalability) to bring us to the promised land.
When considering applications of cryptocurrencies I think it's important to take a step back and recognize that there are billions of people that don't have access to the banking system that we take for granted in developed countries. The author is writing about a truly global technological revolution through the lens of an aggressively unimaginative member of an exceedingly privileged society. The entirety of the definition of success for a cryptocurrency isn't a bunch of people in wealthy nations buying their morning lattes from Starbucks using Bitcoin.
Access to capital and a means of moving it around are crucial for economic development. For the unbanked and underbanked living in developing nations, cryptocurrencies could provide a very real alternative to a corrupt or non-existent government-run banking system. I believe there are people alive today whose first foray into the world of financial independence will be sending or receiving a cryptocurrency on a mobile device instead of opening a checking or savings account with what we think of as a traditional bank.
Interesting dissenting opinion about the utility of cryptocurrencies/blockchain. The author does a fairly detailed review - curious to hear some counter-arguments from informed really-readers!
I'm pretty sure that it wasn't Kai's intention, but the article actually got me even more fired up on blockchain because it exposed me to some new angles that I hadn't previously considered. :P
Two times I almost had to stop -- but kept going, because, whatever, gotta really read ;)
#1) THIS UNDERSTATEMENT OF THE CENTURY: "In many countries, and often our own, a little bit of ability to keep a few things private from the authorities probably makes the world a better place."
#2) "Government policies are designed to disrupt terrorist financing and organized crime, and prevent traffic in illegal goods like stolen credit card numbers or child pornography." Give me a break. Government policies are actually designed to keep the power in power. Blockchain (and, specifically, Bitcoin) will transform finance in the same way that the internet transformed communication & media.
I am legit concerned about this question of power/electricity use. Apparently Bitcoin uses more electricity that Ireland now. However, I'm tentatively optimistic about the lightening network, and looking forward to really reading about that.
I'm also concered about the power-demands for transactions. It should become more efficient with newer cryptos, and they just need to find a use-case where transaction rate & efficiency are negligibly small concerns compared to what it delivers.
the author needs to buy some drugs with bitcoin then he'll know whats what.
when the Wright brothers were first trying to get planes off the ground, someone somewhere was wondering if those idiots really thought that people could fly
The author's tone made me laugh out loud several times. He's clearly terrified of cryptocurrency. He does make good points about the current state -- bitcoin can only process a small number of transactions per second, it's energy inefficient, bitcoin traders are being hacked, etc. But this is how technology works. The first iteration is never perfect.
The author thinks the government is a super duper entity that he trusts absolutely and takes it for granted that everyone else is on the same page. He never even questions that the government has the best interests of its citizens at heart. It's so naive that it's adorable.
He's very anti-progress, which makes me embarrassed for him. His stance seems to be, there are other better ways to do what the blockchain is currently trying to do. However, the blockchain will improve, and if what all these other things can supposedly already do is consolidated into a single computing system, that's progress.
I totally disagree with this: "The tough problem in voting is keeping who voted for who anonymous and yet making sure that voters and votes are one to one. Paper does this so much better than blockchain." Voting needs to be digitized. Less than 60% of Americans voted in 2016, and the percentage of blacks, Asians, and Hispanics who vote are significantly lower than whites. It's extremely inconvenient for people to go to voting booths. And paper is not superior to technology! This guy needs to wake up.
I was so with you up until this part! Paper ballots forever. It doesn't matter how secure, trustworthy or accessible a voting system is if participants can be coerced into casting their vote in a certain way. All the proposals I've read about for digital voting schemes rely on voters being able to validate that their vote has been recorded which means that someone could be forced to prove how they voted under duress. I feel like there are so many improvements that can be made to the current system to improve accessibility, starting with the most obvious like making election day a federal holiday.
I'll start by noting I am a skeptic of virtually all cryptocurrencies, though I am semi-bullish on crypto-goods, if that makes any sense at all (shorter: Crypto-kitties makes perfect sense to me as a big hit, if not terribly different from rare goods in video games already; ICOs strike me as a great way to take money from inexperienced investors).
The one aspect of this article that the people who are most angry about it seem unable to defuse is that while the blockchain is getting less hackable over time, the irreversibility of its transactions to date (with forkability the only alternative in some cases) is an extreme bug. There's an argument to make that whatever is in the software is the correct judgment, but that's cargo culting. It's making the software the middle man, making software the government, in the absence of a perfect system. That's catastrophic for voting, home ownership, and many other things.
Some might see making the software God as an upgrade over governments of varying corruption levels God. I have my doubts but remain eager to listen.
I can't believe this is the first I'm hearing of CryptoKitties. It looks like blockchain Tamagotchis and I couldn't be happier about that. I also have to admit that I don't really understand ICOs. I've only read about it in passing and it just seemed totally sketchy and nothing that I would ever want any part of.
There is no question that the irreversibility of transactions causes a huge number of issues but I also don't see any way around it and do ultimately believe it is necessary for long term trust in the network. One of the biggest downsides is that handling Bitcoin (or any crypto) is terrifying no matter what methods you employ. You're either responsible for keeping your private keys safe or you're trusting some 3rd party which comes with a whole heap of additional risks and downsides. Moving/storing even a small amount of Bitcoin makes you realize just how much we take the FDIC and other guarantees in our banking system for granted.
So if we need to get insurance companies and government regulators involved in order to make it user friendly then aren't we just back to square one? It's a tough question but I feel there are at least two really important points. First, the technology is truly global and decentralized in nature so anyone can build additional services on top of it and consumers are free to choose who they trust instead of being stuck with a singular government monopoly (way worse in some parts of the world than others!). Also, even if it never takes off as an every day currency, I still feel like the blockchain as a form of "digital gold" has enormous value. The US dollar is designed to lose value over time which essentially forces people to invest their savings. The Bitcoin blockchain is deflationary in nature and at least more convenient than storing gold bars in your apartment!
Kai Stinchcombe isn't thinking about the future, he's thinking about how to sell investment services to retirees.
More like Kai Stinkbomb! 🤣🤣🤣
Quick background/bias for me: I’m very skeptical of the crypto‘s applications; and as this article states, the only intrinsic value is ‘illegal purchases’ and currency speculation. All of the article’s examples are really strong (each has some nuances and references that could be discussed at length). However, this does not cover all potential use-cases. And crypto only needs one, two, or a few proper applications to become legitimately used by everyday people.
A good example is payments: visa/credit transactions are better suited for small, frequent transactions, but what about comparing this to wire transfers? The current financial system is built around an infrastructure that has slowly evolved over decades (centuries, maybe?) to leverage middlemen to verify legitimacy. There are various payment/transaction types, perhaps there’s one that crypto will potentially break through?
Regarding public demand and government regulation: currently there’s no ‘legal’ use-case for crypto, which automatically sets all the regulative bodies against it. If interest, applications, and demand continue and eventually succeed, regulators will have to participate.
As long as people are interested in the technology and investing, the search for applications will go on. It could be good and make financial transactions better for the world of users. Maybe it will remain an illegal haven for funds and continue to be a black market currency. Time will tell.
These are smart comments. Thanks for sharing! I'm genuinely curious to hear the "skeptic" perspective because I, personally, am the opposite of skeptical. (Although I do think that Bitcoin and all cryptocurrencies are probably overvalued right now. The price is likely to drop a lot more in the coming months/years, but I don't care. If they drop to 2k next month, it won't matter to me because I know they'll still hit a million in my lifetime.)
Here's my question: Isn't it enough that Bitcoin is a currency that's not controlled by any political State?
That's what got me initially interested in the whole concept and it's what sustains my belief that this technology is a total game-changer. It's just that one simple fact. Everything else is noise. For hundreds of years we've had to rely on governments to provide us with our mediums of exchange - coins, treasury notes, banknotes, cash. And, in doing so, we have had no choice but to cede full control over our currencies. BTC frees us from that trap.
So why are we still talking about whether or not blockchain has uses? Quite literally, its value is proven by its existence. It's happening. Nothing else needs to be proven. Now we just sit around and wait for the technology (speed, scalability) to bring us to the promised land.
When considering applications of cryptocurrencies I think it's important to take a step back and recognize that there are billions of people that don't have access to the banking system that we take for granted in developed countries. The author is writing about a truly global technological revolution through the lens of an aggressively unimaginative member of an exceedingly privileged society. The entirety of the definition of success for a cryptocurrency isn't a bunch of people in wealthy nations buying their morning lattes from Starbucks using Bitcoin.
Access to capital and a means of moving it around are crucial for economic development. For the unbanked and underbanked living in developing nations, cryptocurrencies could provide a very real alternative to a corrupt or non-existent government-run banking system. I believe there are people alive today whose first foray into the world of financial independence will be sending or receiving a cryptocurrency on a mobile device instead of opening a checking or savings account with what we think of as a traditional bank.
Interesting dissenting opinion about the utility of cryptocurrencies/blockchain. The author does a fairly detailed review - curious to hear some counter-arguments from informed really-readers!
What an Article of the Day. And what a day!! BTC trading at $17.6k right now :) https://coinmarketcap.com/currencies/bitcoin/
I'm pretty sure that it wasn't Kai's intention, but the article actually got me even more fired up on blockchain because it exposed me to some new angles that I hadn't previously considered. :P
Two times I almost had to stop -- but kept going, because, whatever, gotta really read ;)
#1) THIS UNDERSTATEMENT OF THE CENTURY: "In many countries, and often our own, a little bit of ability to keep a few things private from the authorities probably makes the world a better place."
#2) "Government policies are designed to disrupt terrorist financing and organized crime, and prevent traffic in illegal goods like stolen credit card numbers or child pornography." Give me a break. Government policies are actually designed to keep the power in power. Blockchain (and, specifically, Bitcoin) will transform finance in the same way that the internet transformed communication & media.
I am legit concerned about this question of power/electricity use. Apparently Bitcoin uses more electricity that Ireland now. However, I'm tentatively optimistic about the lightening network, and looking forward to really reading about that.
I'm also concered about the power-demands for transactions. It should become more efficient with newer cryptos, and they just need to find a use-case where transaction rate & efficiency are negligibly small concerns compared to what it delivers.
3 different smileys in one comment. that's gotta be a reallyread.it record.
good writing. good learning. glad i read this.
the author needs to buy some drugs with bitcoin then he'll know whats what.
when the Wright brothers were first trying to get planes off the ground, someone somewhere was wondering if those idiots really thought that people could fly
Great article. Thanks for sharing :)
The author's tone made me laugh out loud several times. He's clearly terrified of cryptocurrency. He does make good points about the current state -- bitcoin can only process a small number of transactions per second, it's energy inefficient, bitcoin traders are being hacked, etc. But this is how technology works. The first iteration is never perfect.
The author thinks the government is a super duper entity that he trusts absolutely and takes it for granted that everyone else is on the same page. He never even questions that the government has the best interests of its citizens at heart. It's so naive that it's adorable.
He's very anti-progress, which makes me embarrassed for him. His stance seems to be, there are other better ways to do what the blockchain is currently trying to do. However, the blockchain will improve, and if what all these other things can supposedly already do is consolidated into a single computing system, that's progress.
I totally disagree with this: "The tough problem in voting is keeping who voted for who anonymous and yet making sure that voters and votes are one to one. Paper does this so much better than blockchain." Voting needs to be digitized. Less than 60% of Americans voted in 2016, and the percentage of blacks, Asians, and Hispanics who vote are significantly lower than whites. It's extremely inconvenient for people to go to voting booths. And paper is not superior to technology! This guy needs to wake up.
I was so with you up until this part! Paper ballots forever. It doesn't matter how secure, trustworthy or accessible a voting system is if participants can be coerced into casting their vote in a certain way. All the proposals I've read about for digital voting schemes rely on voters being able to validate that their vote has been recorded which means that someone could be forced to prove how they voted under duress. I feel like there are so many improvements that can be made to the current system to improve accessibility, starting with the most obvious like making election day a federal holiday.