It was supposed to be a financial revolution. Instead, crypto has become an environmentally disastrous gift to con artists, says academic David A Banks
Sr Estegosaurio
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23 dni

If someone refers to cryptocurrency as crypto again I’m going to jump from a 6th floor.

@guojing@lemmy.ml
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12 dni

crypto

@rysiek
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13 dni

Thank you. I dropped into this bad habit, this is a much-welcome prod to shake it off.

@ree@lemmy.ml
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25 dni

Really good article. Is there other resource about the “geopolitic of crypto” as they put it?

@rysiek
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14 dni

Not that I know of, but if I find one, I will post it.

@ree@lemmy.ml
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24 dni

This website is a good resource on crypto critique. You might like it.

https://the-crypto-syllabus.com/

@rysiek
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14 dni

Thanks!

@guojing@lemmy.ml
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15 dni

Fading fast, just because of a 50% crash in price? Did everyone already forget that such crashes happen about once every year? Its not a big deal, and in a few months prices will probably go up again. Agree about NFTs though, their only purpose seems to be scamming.

It’s mostly fair.

A currency is just a currency. An NFT is something unrelated. A currency being crypto doesn’t stop it from being mostly used for evil. Cryptocurrencies are an important advance for mankind, but they does not solve all of the world’s problems.

Bitcoin specifically even has a few of its own new problems, which newer currencies have solved.

@rysiek
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36 dni

I honestly don’t think they solve any problems, at all. I have not seen any proof they actually do.

They’re a great way to make a quick buck if you get in early enough, just like any pyramid/ponzi.

Though it does seem it’s not early enough anymore. 🤷‍♀️

@guojing@lemmy.ml
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5 dni

Have you ever sent money to someone outside the EU? Its very expensive, and takes a few days. With cryptocurrency you can make the transfer within minutes, and it costs a couple cents (unless you use Bitcoin of course). You shouldnt think of crypto only as an investment.

@rysiek
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4 dni

You shouldnt think of crypto only as an investment.

Oh not at all. I mostly think of it as a scam, with some Hoggish Greedly (ever watched Captain Planet?) type greed-induced crawling environmental disaster bolted onto it.

Have you ever sent money to someone outside the EU? Its very expensive, and takes a few days.

Sure. But I am sure we can find solutions that do not require buying into Ponzi schemes, if we just decide to focus on that, instead of on shilling said Ponzi schemes. 🤷‍♀️

@guojing@lemmy.ml
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12 dni

And you really think that banks are any better than crypto? In my opinion they are much worse, and I would be happy if they die out. Its true that the technology is in an early state, but there is lots of development in the area, and it will lead to improvements sooner or later.

@ree@lemmy.ml
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34 dni

Honestly one shouldn’t dismiss this side of crypto. The relative ease of transfer is an important technological advancement.

Too bad the rest is riddle with that huge bug : mining reward…

@guojing@lemmy.ml
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12 dni

Better mining rewards than wasting more money on bankers.

None at all?!

  • Has intrinsic value due to scarcity, like a gold-standard currency (as opposed to today’s fiat currencies). So it can’t be devalued or manipulated by a central bank.
  • You don’t need to hold physical coins, or ask a 3rd party (like a bank) to store your money for you
  • Can be send instantly anywhere in the world, without going through expensive money-transfer agents
  • Money cannot be created out of nothing. If you want to loan somebody money, it has to really exist.

There are multiple important benefits. They may not all be important for you right now, but saying it doesn’t solve any problems at all is just ridiculous.

The people who say it’s a ponzi scheme are people who don’t know what ponzi schemes are.

@rysiek
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3 dni

Has intrinsic value due to scarcity, like a gold-standard currency (as opposed to today’s fiat currencies).

In other words, it’s designed to provide pay-off to those who jump-in early, as long as they convince more people to jump in, and assuming they get out early enough.

So it can’t be devalued or manipulated by a central bank.

Well, I don’t what we call a thing that manipulates them. Sure, it’s not called a “central bank”. But clearly cryptocurrencies can be manipulated:

Not to mention manipulation by dudebros like Elon Musk, whose one tweet can just send cryptocurrencies up or down like a roller-coaster.

You don’t need to hold physical coins, or ask a 3rd party (like a bank) to store your money for you

And yet pleny of cryptocurrency people ask 3rd parties to store their assets for them. Which leads to pain.

Also, with cash you also also technically don’t need physical coins. Banknotes are a thing, you know. 😜

Can be send instantly anywhere in the world, without going through expensive money-transfer agents

Well, as long as you pay the exorbitant transaction/gas fees (which are there because the supply of particular cryptocurrency is capped, and so some form of rewarding miners is needed, apparently), and if you can afford to wait sometimes days for the transaction to be confirmed.

Money cannot be created out of nothing. If you want to loan somebody money, it has to really exist.

I mentioned Tether above, in that exact context. Consider the following:

Tether only holds a part (a “fraction”) of the actual hard cash they would need to back it 1:1 with USD. You know how much? A whole 2.9%, last time they produced any numbers on it, as far as I can see. Everything else is commercial paper, bonds, etc. They are literally gambling on the stock market with their supposed “backing cash”. This is basically what the Big Banks were doing before the 2008 crash, by the way.

Congratulations, you just invented (badly) fractional reserve banking. One of the core things cryptobros pinky-promised never to do. 🤣

No wonder people lost their minds when Tether de-pegged by roughly 5% this week!

Oh and by the way: Tether was in turn used to manipulate Bitcoin prices.

If all this is not “creating money out of nothing”, I don’t know what is. Think about it: one of the biggest cryptocurrencies out there, and pretty damn important one, literally just goes “I promise, just trust me” on the whole “every USDT is backed 1:1 by USD” thing, and everyone is just, you know, fine with that.

There are multiple important benefits. They may not all be important for you right now, but saying it doesn’t solve any problems at all is just ridiculous.

So far you have not named a single problem that cryptocurrencies actually solve. You mentioned a bunch of features some claim they presumably have, but not a single actual solved problem. It’s like saying “cars are great, they have wheels, and you don’t need a bus, and they come in all sorts of colors, too!” in response to a question “what problem do cars solve?”

The people who say it’s a ponzi scheme are people who don’t know what ponzi schemes are.

Well, Financial Times might actually have a reasonably good understanding what a Ponzi scheme is. And so, here we are. The whole article is basically this scene from The Office, and it’s finger-lickin’ good.

@guojing@lemmy.ml
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12 dni

Well, I don’t what we call a thing that manipulates them. Sure, it’s not called a “central bank”. But clearly cryptocurrencies can be manipulated:

on a blockchain level (example, another example, and [https://web3isgoinggreat.com/single/juno-accidentally-transfers-36-million-in-seized-funds-to-inaccessible-wallet-address](Juno is thinking of doing this a second time in a row))
on voting power level (here, for example);
on “we will block you from doing any business” level, blacklisted wallets are a thing.
and on monetary “create money out of thin air” level — Tether always claimed that it’s backed 1:1 with cash; well, it isn’t.

Yes there are risks when you invest money in cryptocurrency, just like there are risks in every investment. The market is also much more volatile than stocks, so I wouldnt recommend to put your life savings there. And to be honest, I have never seen anyone suggest that.

Well, as long as you pay the exorbitant transaction/gas fees (which are there because the supply of particular cryptocurrency is capped, and so some form of rewarding miners is needed, apparently), and if you can afford to wait sometimes days for the transaction to be confirmed.

Yes, Bitcoin isnt really usable as a currency (unless you are rich). Has been the case for many years. There are many other coins that can be used instead.

I mentioned Tether above, in that exact context. Consider the following:

Tether is not a real cryptocurrency, exactly because a single company has full control over the supply. Again, I wouldnt recommend you to invest your money in Tether.

Oh and by the way: Tether was in turn used to manipulate Bitcoin prices.

Of course crypto markets are manipulated, just like stock markets are manipulated. If you dont know that then you are really gullible.

So far you have not named a single problem that cryptocurrencies actually solve. You mentioned a bunch of features some claim they presumably have, but not a single actual solved problem. It’s like saying “cars are great, they have wheels, and you don’t need a bus, and they come in all sorts of colors, too!” in response to a question “what problem do cars solve?”

If it doesnt solve any problem for you, then you can simply ignore the topic. The rest of us will still discuss about it.

Lots of interesting links there. But the pieces of your arguments are so diverse, there is no single coherent answer. In the technological field so diverse, you can always find bad things, if you are looking for them.

I’ll just answer the first and the last point.

In other words, it’s designed to provide pay-off to those who jump-in early, as long as they convince more people to jump in, and assuming they get out early enough.

Here you really are describing a Ponzi scheme. By this logic, every currency (with the possible exceptions of gold and bitcoin) are ponzi schemes. Central banks print banknotes (or X tokens) which are worthless. They only have value because people start to believe they have value. And the central banks use this confidence trick to make money. They more tokens/banknotes they print, the more money they make.

Financial Times might actually have a reasonably good understanding what a Ponzi scheme is

This does not describe a Ponzi scheme. It describes a fiat currency. “Ponzi was paying earlier investors using the investments of later investors”. He created an investment fund, not a currency. There is no way you could confuse those two things. And a pyramid scheme is also an unrelated thing. But you’re just as capable of looking this up as I am.

@rysiek
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34 dni

The more I think of it, the more I come to the conclusion that cryptobros looked at the banking system and broader financial sector, correctly figured out there are a bunch of serious problems with them, and then misidentified the underlying problem as technology used instead of greed.

They are basically focusing implementation details instead of figuring out how to fix the actual source of the problem.

@roastpotatothief@lemmy.ml
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3 dni

That’s a good way of looking at it.

I guess part of the idea way taking the power away from the greedy people, which fixes one small part of the problem.

Part of it was fixing the implementation details, which solves another part of the problem. But yes a purely technical solution is not enough on its own. Bitcoin is not a magic bullet to solve greed. My answer below talks a bit about that.

@rysiek
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13 dni

Bitcoin is not a magic bullet to solve greed.

It’s way worse than that. Cryptocurrencies are a way to supercharge greedy and corrupt people, by giving them a powerful unregulated tool to play with. And all at a tiny cost of emitting thousands of tons of CO2 at a time when parts of India are already starting to become uninhabitable.

@guojing@lemmy.ml
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12 dni

How many emissions do you think millions of bank employees cause with their cars, flights, heated houses, and general consumption? Particularly as most banks are located in the U.S, which has the highest pollution levels in the world. Surely thats much worse than mining farms.

@rysiek
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12 dni

This is hardly a reason to add more to that, is it?

  • Johnny, everyone’s trying to clean up and you’re making more mess!
  • Yeah, but Adam also made a mess!

Seriously. 🙄

Plus, the financial sector can process thousands of transactions globally per second. Bitcoin, on the other hand, about (checks notes) seven.

@guojing@lemmy.ml
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21 godzin

Here you go again, taking a weakness of a single cryptocurrency, and pretending that it applies to all coins. No point arguing with this nonsense.

@rysiek
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17 godzin

Look, cryptobros have been pushing cryptocurrencies using cherry-picked “arguments” for years. I don’t see why this can only work one way?

On a more serious note, I am quite tired of the moving of goalposts practiced by cryptocurrency shills. “Oh, no, that only applies to some coins, not all of them!”, “hey, that one also only affects some blockchains!”, “no no, you can’t say that, there’s this coin out there that happens to not have this one specific problem”.

Somehow problems they point out with the financial sector are supposed to apply to the whole sector, but problems with cryptocurrencies are only ever relevant to one very specific coin and in no way should reflect on the whole scene.

Give me a break. 🙄

Also, nice evasion there, just ignoring the main part of my post, which was: the fact that some other industry happens to generate emissions doesn’t make it okay to create a completely new source of emissions.

Torrid
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35 dni

The crux for all of those points is that the value is affected by fiat investments. It may not be able to be manipulated by a central bank, but it is influenced by the amount of investment put into it, which gives it the dangerous edge of being a very convenient ponzi-scheme, not to mention an incredibly unstable form of currency that most of the proletariat can’t afford to risk using for their day to day expenses. That alone turns it from “currency” to “high risk investment.”

Being able to send it instantly without fees is a great dream, but the above points kind of spoil the intent.

We don’t need to get into the environmental aspects, or the sinful impact it’s had on the price of GPU’s (further pushing the proletariat from being able to fully participate in the blockchain), and the equally terrible chip shortage combined with the continued purchase and use of GPUs by crypto miners.

But blockchain cryptocurrencies have several serious problems beyond any technical oversights with the actual implentation.

arguably, your biggest stake holders now are the incredibly wealthy -> those who can afford to mine (therefore, those who can actually participate in the blockchain), and/or those who have invested the most fiat into the currency. I know what the original goals of crypto were, but the unfortunate reality is that as soon as fiat got into the mix, the dream died. Capitalism strikes again, and no one with real money being made is going to change the way it works now.

If there’s a crypto out there that isn’t available for fiat investment, that’s the best hope to actually having a decentralized currency for all people

@roastpotatothief@lemmy.ml
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5 dni

it is influenced by the amount of investment put into it

All currencies have this problem. Bigger ones suffer less from it, so you might not notice it. In fact it’s even worse than you say.

  1. Whales actively manipulate the price for profit. It’s not a ponzi scheme. You’re confusing two different things. If you want a buzzword it’s a pump and dump.
  2. This doesn’t affect only currencies but any commodity. Look at oil or food or land or gold. All have exactly the same problem you cite for bitcoin. In fact gold is a very good analogy for bitcoin. You can understand it better by thinking of it as “digital gold”.

We don’t need to get into the environmental aspects

Thanks. That’s a tired auld one.

your biggest stake holders now are the incredibly wealthy

I’ve thought about this a bit. Right now, I don’t think the currency itself can or should solve this. The only working solution is redistributing wealth through the tax system. It works very well when done properly. So profits from bitcoin should be taxed like any currency trade. Income in bitcoin should be normally. Inheritance tax, and all the rest, should all be agnostic to which currency you use. This is the only proven way.

If there’s a crypto out there that isn’t available for fiat investment

That’s a very good idea. How would it work? Have you seen been anything written about this already?

Torrid
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12 dni

For ponzi-schemes, you have to look at the crypto industry’s lesser known feature: Tokens

Long before NFT’s, companies have been manufacturing systems to create “tokens” (usually utility tokens) and trying to sell them to other people. This usually happens through crypto conferences, crypto meetups etc. Typically, the plan is to convince people of their impending value growth by going on a long complicated sounded explanation of how tokens are earned and how many people are buying into them, and then get that person to by a bunch of cheap tokens. The promise is that they can then sell them to others to make more money, or (in quite a few cases), sell tokens to someone who will sell tokens and give the initial seller a small percent… and so on.

Bitcoin did not start with fiat-investment opportunities, but with the way the entire crypto market is operating, that’s the goal now: creating investment opportunities. It’s proven to be a very effective means of making fast-money, so there’s no incentive for the market to move away from pushing crypto as an investment hole rather than focusing on value control and stability to make it a more accessible form of currency. It also makes me wonder about how functional a lot of these coins even are in terms of utility. How many stores will accept every single kind of crypto?

And nobody wants to talk environment… but it’s a really huge point to bring up, especially now that the environment is worse than ever. I’ve really dug into the impacts on other posts, but I try to at least mention it because this is the one big aspect outside of the “currency” itself that actually impacts people who choose not to participate. The GPU shortages, the giant mining farms, growth-driven-proof-of-concept-difficulty-increases, etc. I get it, they’re working on something better than proof of work in terms of energy consumption. But look at how many of the damn things exist! And since all crypto currencies work alongside fiat, it’s not like we’re replacing traditional banking.

Sure, the energy consumption and carbon dioxide output is roughly ~50% of traditional banks, but unless everyone suddenly decides that they don’t care about their fiat investments, that output is just going to grow alongside traditional banks

@guojing@lemmy.ml
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15 dni

sinful impact

I thought this forum is about technology, and not religion.

and no one with real money being made is going to change the way it works now.

Of course, no one is going to change the way an existing currency works, that would cause major trouble. If you want a different type of cryptocurrency, it should start as a new project.

Torrid
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1 dzień

And what exactly do you consider as “sinful impact”? Everything that you personally consider “bad” for some reason?

you have to be delusional to not objectively assess the state of gpu prices and the environmental impacts as “bad”

https://priceonomics.com/how-has-cryptocurrency-mining-influenced-gpu-prices/ here’s an interesting bit on the prices

environmental impacts are largely: Carbon dioxide output, resources required to accommodate expanding blockchain, increase in proof-of-work requiring even greater resources and even higher carbon output, greater strain on gpu demands etc. then take those reasons and consider ever single crypto with these issues

all in all, you could say that those things are all bad

@guojing@lemmy.ml
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21 godzin

I think the label “bad” is very clearly subjective. For example, gpu manufacturers clearly benefit from this.

Torrid
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2 dni

I have no desire to start any new crypto currency. I’ve worked development in that business for long enough to have completely lost the taste for it. Most coins are poorly planned and run by con men. It’s no surprise that things are slowing down

I thought this forum is about technology, and not religion.

Just noticed this. Didn’t think exaggeration or metaphor was beyond the scope of people’s comprehension?

@guojing@lemmy.ml
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12 dni

If we are talking about most coins, then its definitely true that they are poorly run. But surely you can agree that there are at least a handful of technologically interesting crypto projects. For example Sia

And what exactly do you consider as “sinful impact”? Everything that you personally consider “bad” for some reason?

@rysiek
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3 dni

I thought this forum is about technology, and not religion.

Cryptocurrencies etc are religion at this stage, debating cryptobros is eerily similar to debating religious fanatics. You get a recital of the “truths of faith”, and any scratching off the surface and pointing out how they are demonstrably untrue gets people angry and start calling you names.

Plenty of threads here over the last few weeks that prove it.

Except it is constantly manipulated by, for example, Elon Musk on Twitter and celebrities who then procede to rug pull. And it’s not even really decentralized, because when needed, the blockchain can be changed (like what happened with Ethereum years ago, that got split into two blockchains) or blocked (like what is happening now with Luna). But you also get all the cons of decentralization: you got robbed by an hacker? Well, fuck you, no one can do nothing about it. Someone sent a malicious NFT to your wallet without your consent? Too bad you clicked on it, now your wallet’s empty.

"Can be send instantly anywhere in the world, without going through expensive money-transfer agents ": except transitions on a blockchain are incredibly costly.

@guojing@lemmy.ml
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15 dni

Yes there are risks with everything, and if its too risky for you thats okay. Others will keep using it. Btw blockchain transactions are only expensive with bitcoin and ethereum, most others are extremely cheap.

@rysiek
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14 dni

Yes there are risks with everything, and if its too risky for you thats okay. Others will keep using it.

Can they then please not make a big thing out of losing everything because of gambling in a cryptocassino? And maybe please do not ask the Fed to step in?

Can they please stop appropriating artists’ works, or activists’ faces?

That’s what really gets me going. I don’t care what cryptobros do with their money and if they want to put it in a machine that spits out random amounts on the other end, be my guest. But can they please stop insisting on affecting everyone else in the world?

@guojing@lemmy.ml
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12 dni

Can they then please not make a big thing out of losing everything because of gambling in a cryptocassino? And maybe please do not ask the Fed to step in?

I did not ask this so-called Fed anything. And of course some people will lose money, thats what happens in a market. If you want zero risk, play some video game instead.

Can they please stop appropriating artists’ works, or activists’ faces?

Yes it is very easy to copy or pirate digital art, big surprise. And some people combined that with cryptocurrency. Do you think no crime has ever been committed using us dollars?

That’s what really gets me going. I don’t care what cryptobros do with their money and if they want to put it in a machine that spits out random amounts on the other end, be my guest. But can they please stop insisting on affecting everyone else in the world?

It is obvious that you care a lot about “what cryptobros do with their money”. The only question is, why?

@roastpotatothief@lemmy.ml
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5 dni

like what happened with Ethereum

It happened to bitcoin too.

Well, fuck you

In this sense cryptocurrency is just like cash. It can be a blessing or a curse depending on your situation.

It’s possible to build a banking system, with chargebacks and insurance and all the rest, on top of any currency. It doesn’t exist AFAIK for bitcoin yet. But there’s nothing stopping governments or businesses from introducing it.

You could also argue that bitcoin doesn’t need any of that because it’s inherently more secure than the banking system. But that’s maybe another day’s argument.

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