… the founding ideas are promising, and something I dream of.
Before I start, just a little bit of background on me so you can understand how biased I am (😅): I’m a 16 years old programmer and I won a few crypto hackathon/funding rounds and I made a lot of friends in the field. It allowed me to get quite a bit of ETH/XMR along the way!
I see cryptocurrencies getting a lot of hate, rightly so for the number of scams, shitcoins, NFTs bullshit, “governance”, DAOs and all those often useless & snob terms.
However the founding ideas of decentralisation and freedom with your money are very appealing to me. Smart contracts are really interesting for creating your own banking operation and tokens can represent anything! It’s a world of possibilities to play with, and you get to build something useful for people!
I’d just like to add a bit of nuance tho: I see a lot of apps being built and what’s really making me laugh is the lack of open-source, decentralisation and auditing on privacy. Granted, there is a lot of fake promises, but it’s like everything, you have to find the talented people to follow.
I find it fascinating to build unstoppable, decentralised, user-first apps. I just hope that web3 stays true to its founding principles.
Hope it was interesting, tell me what you think!
EDIT: title+typos+the game is not comfortably played in Act 2
At 16 I was a right leaning libertarian. By the time I graduated high school and had my first “real” job I realized how incredibly stupid right libertarianism is. The point being in high school everything I knew was true was actually “true”.
Crypto has more problems than it is worth. It fixes almost no problems at all because the people behind designing it were NOT in any way knowledgeable about how currency systems work.
Crypto might lose its appeal if you actually learn how banking works. I’m not saying don’t hold onto any, as I personally believe we have not hit peak delusion with crypto yet, but I wouldn’t think of it as a way of the future.
If crypto had any real value or use beyond speculation it would have manifested by now.
Okay! It’s interesting, where do I start to get educated about that? I would love to see my perspective shift!
Honestly at 16 it’s going to be trickier. You say you are into programming, are you WAY ahead of the curve on math (eg taking post-AP math now)?
Well I just have to be patient then!
My suggestion would be to see if you can audit online a political economics class if you aren’t that far ahead on math. Standard 101 math would be really really hard if you are in Algebra II. Political economics has a lot less math and could teach the basics of tax policy, banking, monetary policy etc.
Not to disagree, but if you have the energy to write paragraphs, maybe provide more than just your hand wavy opinion.
Saving this for when it’s not 2AM.
It’s not a good video, I’ll save you the biased rant.
Lol thanks mate :))
The concept of decentralized finance infrastructure without outside regulation and governance is interesting in a vacuume.
In practical reality, it’s by definition, a return to the century+ old unregulated financial wild west. Scams and stupidity were rampant. We had to create all the regulations and restrictions we’re used to now, for people to be able to use the system instead of their mattresses to keep their money.
Is using the mattress such a bad thing? Nobody is going to care as much about your money as you will. If you fuck up and lose everything you are devistated. If the CEO of Wells Fargo looses your money they have no need to care because the government will force their slaves to make it up to you, or not. At the end of the day they can choose not to help you and you can do nothing about it.
Edits: spelling
It all depends on how much money you stick in the mattress.
A mattress can burn, and you end up with nothing. A bank that burns, either gets saved, or you get the government pinkie swear it will give you up to some amount of money back.
Keeping less than the deposit guarantee in a mattress, is silly, the government has more guns than you have to defend it, and if it tries to go back on the promise, there are many more people willing to tear it a new one.
Keeping any excess above the deposit guarantee, can make sense… but most people don’t have that much cash, or are in debt already, and it’s more important for them to not get foreclosed on the house mortgage with the mattress in it.
BTW, mortgages rarely burn even if a bank burns, funny how that works.
BTW, mortgages rarely burn even if a bank burns, funny how that works.
Aint that the damn truth. Ask the Canadian truckers how safe their money was in the bank. Whether or not you agree with what they were doing its quite clear that the minute you put money in a bank its no longer your money. Its a conditial IOU that can be revoked at any time for any reason whatsoever or no reason at all. Donated tovthe wrong social cause? No groceries this month. Didn’t stay off the beach during a pandemic? No gas for you. Maybe ask cyprus what a haircut to your bank account is like.
Ask the Canadian truckers how safe their money was in the bank.
Their money was pretty safe, along with their debts; other people’s money… well, some money can be charged and convicted, never trust money. Or the wrong government, for that matter. Like, Zimbabwe, Iraq, Libya, Niger, North Korea, China, or Russia, are a no-go, but anyone with big guns and a vested (or existential) interest in looking like they’re honoring those IOUs, like the US or EU, can work.
Even if the CEO of Wells Fargo loses your money, you will still get at least $250,000 of it back (assuming you had deposited that much) via the FDIC.
The FDIC will honor their obligations because to do otherwise would be to risk a massive bank run, of the sort that started the Great Depression. This wouldn’t just screw you over, it would screw over the ultra-wealthy too, and we can’t have that.
At the end of the day, someone can just not take your mattress money and you might be out of luck. Your mattress can burn down and all that money is gone, which is far more likely than Wells Fargo taking your money and then the FDIC not giving you anything.
The FDIC only has enough to “insure” ~0.7% of all bank deposits under $250k. They pray that there is never a huge bank crisis. With the failure of SVB and the other 4 banks earlier this year the FDIC would have been totally out of money several times over already. The only thing that stopped that was the bigger banks like JPMorgan being told to buy them out. The FDIC is a house of cards just waiting to collapse. They only have enough money to convince everyone that they will be safe when in truth a few banks failing at once wouldnt even leave the couch to look for pennies in.
Congrats on winning some funding rounds, spend them wisely.
Crypto is great, but almost for all the opposite reasons:
- Smart contracts and DAOs, are the basis for a lot of financial instruments that would otherwise be a bureaucratic hell, properly used they’re beneficial for both investors and clients.
- NFT tokens (yes, I know what I did there) are worthless without an external element to recognize them (whether automated, legal, or human), but they tie well into the “code as law” ideal, and are a good fit for other… well, code. That means stuff like actually buying and owning digital goods, instead of the “buying” (until they decide to take it away) that media/software platforms are currently selling everyone onto (now that’s a scam). Or to be not worse, but quicker and more versatile, than a digitally signed notarized document.
- Decentralization is nearly worthless, except as the basis for independent verification of transactions. Whether they come from a more or less centralized source, is secondary.
- Self-custody is only for the really dedicated; 99% of the population doesn’t need it, doesn’t care, doesn’t want it, and would more likely be hurt by it. Check out the PGP “web of trust”, and Namecoin, for cautionary tales. Banks were created precisely to avoid self-custody, which used to be the norm before them. Also why the average person loves to keep all their data only “in the cloud”.
- Apps don’t need all to be OpenSource, decentralized, or audited; they can be private for a private purpose. Just don’t use someone else’s private app.
- The “web3”, is a nonsense buzzword. A “decentralized” web is just called “the web”, no need for any blockchains or anything, hyperlinks are more versatile anyway; the Fediverse or e-mail are “decentralized apps” working just fine, sometimes called “self-hosting”; token economy is simply called “economy”; storing data off-premises, is either “the cloud” or “someone else’s computer”; nobody wants “unstoppable” apps, just apps that fulfill their promises, then stop wasting resources.
I get how attractive all the buzzwords and ideals are, particularly for someone interested in programming, but as someone else said, get a sense of how, and why, the current systems work as they do, then you’ll be able to better separate what has some potential, from what’s just buzzwords to blind you to what’s going on in the back.
Unless, of course, you’re up to don a sparkly suit and try to con others… but beware, there are people with decades more experience out there doing the rounds.
I am a user of Monero. I purchase it with dollars and pay most of my bills with it. I hold some matic in aave to allow me to take out loans when i need them so i dont have a credit card. I saw a 9% interest rate to borrow recently and thought “damn that is expensive” and then i remembered most credit cards are 20%+ and realized my frame of reference had shifted without me even realizing it. I am about to borrow $500 usd to buy some insulation in a few months and it annoys me because that is 40% of my total credit limit when i would like it to be 30% or less. Nevermind that since its a crypto loan i dont have to apply for it, have a bank account to get it, worship at the alter of king FICO, etc.
I think the central problem with crypto is that it is a hammer in search of a nail. The founding ideas are great in the realm of ideas, but in the real world it doesn’t really pan out. A currency is only as valuable as the goods you can buy with it. For our most common currency, the USD, the value of an individual dollar is based on its near universal acceptance and its ease of use. The price of the dollar may fluctuate because of speculation (stock traders betting on what the dollar will be worth in the future), but without speculation, the dollar would still be valuable because you can use it to buy almost anything in the world that is for sale.
What is the use case for crypto? Where does using bitcoin or ethereum make more sense than just using USD or Euros? Crypto is secured via the blockchain, but it is not more secure than standard currencies. Quite the contrary - if i make a credit card transaction and the vendor doesn’t send me my goods, I can call my credit card company and dispute the transaction. If I do the same with crypto, I am left high and dry. There are methods like escrow to get around this, but those require the intervention of a third party. At that point, why not just use your credit card?
The only real world advantage that crypto seems to have over other currencies is that it is both difficult to trace and it is digital. To my knowledge, the only time one might need both these qualities is if you are making an illegal online transaction. If the transaction is not illegal, then using a credit card is always better. If the transaction does not need to be online, then using cash is always easier.
Illegal online transactions are a relatively rare use case, and so most people that are buying or selling crypto are doing it to speculate. They don’t believe in crypto as an idea - they dream of buying low and selling high, or mining the coin and selling it for more than the cost of the power to mine it. Because most people are only buying into crypto to sell it later (rather than exchange it for goods), coins have nothing to stabilize their value. It’s pump-and-dump schemes all the way down.
The only real world advantage that crypto seems to have over other currencies is that it is both difficult to trace and it is digital.
most crypto currencies (excluding Monero) are easier to trace than fiat money since every transaction is public to anyone as long as you know the public key (address)
relying on “Mixer” services require are third party in hope they don’t actually sell you out and most crypto exchanges have kyc implemented by lawgreat point, which actually helps further my point. Regulations passed over the past 10 years to clamp down on crypto have minimized its effectiveness as a less-traceable currency, which further reduces the cases where cryptocurrencies are better or easier to use than fiat currencies.
You can use both systems, and appreciate their advantages and disadvantages. Cryptocurrency is good for discreet transactions where you don’t mind sacrificing some of the protections of the traditional financial system. So far it seems that it’s mainly used to buy drugs and other illegal stuff, but I’ve also seen web hosting purchasable with crypto, and I’m sure there are plenty of other applications that I can’t think of now. Back in the first bitcoin boom, there were restaurants selling food for btc, but the confirmation delay was a concern. That wouldn’t be the case now with the lightning network, but the novelty is gone.
The web3 stuff built on top of blockchain seems to be 99% scams and grifts. I don’t subscribe to the value of adding artificial scarcity/provenance to digital goods.
I was an early adopter of bc and more than ten years later I am still waiting for it to be useful.
Back then the dream was that you would be paid in it and could pay your rent and food with it. But honestly it was just a fun experiment and not very serious.
Also I think a weakness is that you can’t print more when it is needed to prop up the economy, so USD etc will still be required to run things smoothly. Printing is just a way of distributing a little bit of value from everyone to a specific goal and sometimes this is essential.
I’m not saying that there isn’t a better system, but just that the current one needs this flexibility.
Yeah I never got the proof of authority thing, pretty ironic
For a start, bitcoin is revolutionary. It solves all the problems with the banking system.
For example, people’s card details get stolen all the time. Bitcoin had solved this by using a new public key for each transaction.
When something is purchased using a credit/debit card, you are effectively using the same public key for every transaction. So what is happening is replay attacks. This type of scam is inevitable because the banking system is insecure by nature. It’s built on a foundation of insecurity.
Bitcoin fixes all that. Bitcoin or similar is necessary for money-based economies to continue to work in the future.
Bitcoin and crypto are more than this. This is just one of the important innovations bitcoin makes.
Sorry but your examples of the problems are pretty minor and solvable by other means (you can’t do much with my credit card details because they require strong authentication which uses one-time passwords). Also, you conveniently leave out all the problems with cryptocurrency. It’s not like you’re protected in any way. We also do not have any adopted implementation of cryptocurrency that’s not slow and super wasteful of resources. So far they’ve also had the ponzi-scheme problem… first adopters can become very rich but late-comers get crumbs or lose everything.
You make a lot of points. To explain all of those things, I would news to make a very long post. i think i will do that when i get time.
I think it’s so exciting because those blockchains solve a lot of problems and are a land of possibility.
Yes block chains predate bitcoin and are very useful. Git uses them. A currency is a perfect use case for a block chain. You need to robustly store balances and transactions so they can’t be tampered with.
I would say it’s insane to have a currency which is not block chain based. Too easy to fiddle your finances.
