https://www.stephendiehl.com/blog/crypto-absurd.html
The Intellectual Incoherence of Cryptoassets
Early in my career one of my mentors gave me one of the best pieces of common sense advice on trading that I ever received. Never buy financial products you don’t understand. And in today’s market there’s one very pathological psuedo-asset class, that despite all the sound and fury, I dare say nobody fully understands: crypto assets.
As someone who studied German up to AP in highschool I got very excited reading
Some people have cleverly suggested we adapt the German compound word…
My mind feverishly concocted a 30+ character compound of 4 words smashed together only to sadly be offered
…schneeballsystem or snowball scheme to refer to this new type of scam.
Good article otherwise though.
Same feeling. It’s better than nothing, but hardly rates for the Clarifying Phrases thread.
ASCII art and everything.
This is nuts. It’s so nuts it hurts my brain. The whole story.
Here’s an insane excerpt:
Motherboard contributed a small amount of money to the project to see how this would play out in practice. Here is how it worked:
ConstitutionDAO accepted only ether, the token on Ethereum. For someone to convert USD to $PEOPLE tokens, the process had several steps. First, we had to buy Ethereum on an exchange (we used Coinbase). We bought $200 worth of Ethereum. Coinbase took a $3 fee. Then, we had to send the Ethereum from Coinbase to a MetaMask crypto wallet. To do this, we had to pay a $12 network fee. Then, we had to send the Ethereum from MetaMask to Juicebox. So-called “gas” fees vary wildly and depend on how busy the Ethereum network is at any given moment and the complexity of the transaction. Right now, gas fees on Ethereum are very high, and a highly complex operation could end up costing hundreds of dollars in fees. In our case, we paid a $75 gas fee to contribute roughly $75 to the project. Of the initial $200 we bought in ETH, $90 was eaten up in fees simply to donate to ConstitutionDAO.
It’s not just the fees, it’s the lie of decentralization. The one and only thing the coins always lean on to defend their usefulness is decentralization. If it’s actually decentralized, then that means you should be able to interact with the blockchain directly from your personal computer. Just like with Napster or Bittorrent where you share files directly from your computer.
But no, with the blockchain you have to go through one or more other centralized services that do that for you AND charge fees for it, defeating the entire premise of decentralization.
“Decentralization” really just means “I should be able to centralize it myself” when it comes to these things.
EDIT: That story reminds me of the “Libertarian PD” satire article from all those years ago.
“I put a quarter in the siren.”
The libertarian dream of an unregulated economy means negotiating fees for every damn thing.
“Home Depot™ Presents the Police!®” I said, flashing my badge and my gun and a small picture of Ron Paul. “Nobody move unless you want to!” They didn’t. is the line that kills me every time.
I always liked “I shot the mailbox again, on purpose.”
Looks like a major bank might actually try to centralize digital currency.
Japan is attempting the same.
I’m not alone in believing in the fundamental technical uselessness of blockchains. There are tens of thousands of other people in the largest tech companies in the world that thanklessly push their organizations away from crypto adoption every day. The crypto asset bubble is perhaps the most divisive topic in tech of our era and possibly ever to exist in our field. It’s a scary but essential truth to realise that normal software engineers like us are an integral part of society’s immune system against the enormous moral hazard of technology-hyped asset bubbles metastasizing into systemic risk.
Texas-Methane-Crypto…
If this isn’t brutally destroyed by constant and consistent vandalism, humanity has failed.
Good blog post about decentralized web3 talk:
https://blog.wesleyac.com/posts/web3-centralized
Quotes:
One of the main claims that blockchains tend to make is that they’re decentralized, but “decentralization” is not a single axis — while anyone can join the Ethereum or Bitcoin network, you can only join if you agree to follow the same protocol that all the other nodes use. If you spin up an Ethereum node, but set the block reward to something the network doesn’t agree on, you’re not going to get very far. The way this protocol is decided on is not exactly centralized, but it’s not exactly decentralized either. The entire blockchain world is focused on building systems for global consensus, but global consensus is a goal that is fundamentally at odds with the goal of decentralization.
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Ethereum is only decentralized in the way that doesn’t matter — you’re free to join the decentralized system, under the condition that you act in the exact same way as every other actor in that system.
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