Comment by tombert
4 months ago
The entirety of the cryptocurrency world is so obviously a "Chesterton's Fence" situation.
Every pseudo-intellectual thinks that the fiscal world is "too complicated" and they're going to "simplify" it by making some token, only for people to realize that the monetary world is just complicated, and they have to reinvent everything that already existed in the traditional banking system.
I had to do some work on an ACH system a couple years ago [1], and I read through a large chunk of the ACH standard, which was about 800 pages. It's easy to see and hear that and think "that's way too complicated, what could possibly be so hard about money transfers that necessitates an 700 page specification??", but as I read it and saw how many edge cases it took into account, it was easy to see why it got so huge. It turns out that dealing with money is just a really hard problem at scale.
I fell for the cryptocurrency hype of 2021, and I will fully acknowledge that that came out of a complete lack of understanding of how fiscal systems work. I wish everyone else would just grow up already.
[1] Usually disclaimer: not hard to find my work history, it's not hidden, but I ask that you do not post anything about it (or at least any proper nouns about it) here.
For what it’s worth, I’m a “crypto believer” and I have never considered ease of use to be one of its selling points.
What you are describing are the systems of power which create a stable financial system. That is, one where you can put a nickel into a bank account and expect it to be there in a year or a hundred years.
That indeed requires a complex web of power structures, because its top line goal is to be stable and dependable. And stability within a complex landscape requires an equally complex network of power.
Crypto provides the exact opposite value: it cannot be controlled, no matter how robust your power structure is. It can be insured, at a significant cost, but not controlled.
That means in the face of even totalitarian powers someone could still move crypto across any boundary that is permeable to information, which it turns out is a set that roughly approximates the set of all boundaries.
This is a terrible way to pay for candy bars, because candy bars are not worth insuring.
But what I think the crypto opponents miss is that there is a set of transactions—some criminal, some legal, some immoral, some righteous—which cannot be made in a state controlled financial systems.
And that these transactions are what gives crypto value as a currency.
To me, where I would like the debate to go is not “is crypto a scam?” but “how does society protect people from the violence facilitated by crypto?”
Yes, financial “violence”, which can be insured against, but also real violence: human trafficking, extortion, etc.
We anarchists sometimes like to pretend that without rulers we will be freed to care for each other. But in the shadow of a history of violence, there will be more violence too.
And the “crypto is a scam” argument I fear is a red herring that distracts from this, the real issue.
Power structures can absolutely control crypto. They can make it illegal - it won't eradicate it altogether (see: war on drugs), but it will severely decrease its influence. No one is bragging about investing their retirement savings into cocaine, and Paypal does not offer it to me either.
Or if government is smarter, they can slowly gain control over it. Allow trading traceable currencies via official channels, but with good KYC measures. Do not allow fully anonymous systems. Go after mixers. Prosecute exchanges which do not verify their customers. Once there are plenty of government-sanctioned exchanges in the country, there will be little incentive to create unsanctioned ones, and someone with coins that were marked "North Korean-originated" won't be able to spend them in the country.
Your “if government is smarter scenario” is exactly what’s playing out right now.
> Crypto provides the exact opposite value: it cannot be controlled, no matter how robust your power structure is. It can be insured, at a significant cost, but not controlled.
This is such a naive claim parroted by crypto enthusiasts. Lots of criminal things can't be 'controlled' (e.g. stopping people murdering, stealing, etc.), but there are consequences if you do them.
Crypto could easily be controlled by laws or punitive taxes. KYC is a step in that direction. But still this claim keeps coming out. All they need to do is control the off-ramps.
It's like the one "but, but, there will only ever be a fixed amount of BTC, so it's valuable!". There will only ever be a fixed amount of my turds, but I don't see them up for auction. It also doesn't explain why BTC is the valuable one but not all the clones (spoiler: it's the brand name).
It's easier to just parrot some grifter's justifications than actually thinking for yourself I guess.
You wouldn't be the first person to pump and dump their own turds.
Some people even brand their own turds with their own name, and drop a $TRUMP and dump.
The crypto community continues to speed run the history of traditional finance. [1] https://news.ycombinator.com/item?id=31777761
It's only a matter of time until we get a railroad track laying network secured by proof of railroad track (PoRT) and recreate the panic of 1873.
I don’t know anyone working in crypto who complains about the physical world being too complex. Imaginary dragons are easily slayed.
If you read the original bitcoin paper, it complains about bank centralization and “issues” with traditional finance for a not-insignificant amount of it, and presents cryptocurrency as a solution.
I will admit I used a bit of shorthand, but the paper is providing a “simple” solution to a “complex” problem.