And unfortunately I think the tech industry unintentionally enabled it in a few ways.
The internet/mobile boom was a real leap for humanity. (Not an unmixed one, any more than the printing press was. But a real leap nonetheless.) This left a lot investors looking for the Next Big Thing. I think it made regulators very cautious of possibly harming something that could be The Future. Journalists were accustomed to telling uncritical gee-whiz and great-man stories about tech. And we ended up with a cultural archetype of the genius tech founder in the Steve Jobs/Tony Stark mold.
All of these things were vigorously exploited by the cryptocurrency fraudsters and blockchain grifters. That harmed all the people they suckered, of course. But I also think it was terrible for the tech industry. The culture flowed back into tech, and also created an incentive toward hype. All the years and all the money spent on the mining/blockchain/smart contract/ICO/DAO/NFT/DeFi/Web3 series of bullshit "innovations" could have gone to real technology and real companies. All the bright young people distracted by that stuff who instead of learning the fundamentals of real business and real tech who will have to spend years deprogramming themselves.
Hopefully next time around we can be more discerning, more usefully critical.
I said unintentional because a lot of the same factors were helpful for the tech industry and we as an industry just blithely accepted their continuance. That includes the VC money spigots for sure.
But there are plenty of actors, specific VCs included, where I have a hard time believing they didn't know better. In my view it was often their job to know better.
Very much intentional, especially after the first couple rounds of fraud/theft/bad behavior, it's obvious that the downsides and risks were known, but the promotion of the tech kept being promoted.
It's understandable why these were modded into invisibility ;)
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@nancyhn: “The banking industry is a fraudster's paradise. The difference is they don't get arrested, they get bailed out with bonuses. It seems there are a lot of short memories here who don't remember 2008.”
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icepat: “If you rolled back every bitcoin transaction ever made you would end up with people in debt because the transaction fees were paid. This makes bitcoin into a scam. The miners in total are guaranteed to win, everyone else in total is guaranteed to lose. Some people haven't realized their loss but it's there. It is an ingenious scam because it's not the scammers who hype it up, no, it's the marks because the only way they can get ahead if they hype it up. The miners get their cut no matter what.”
“This is not the same for say, gold, because gold can be made into, say, electronics which now can be sold for more than the sum of the cost of the components. Stocks pay dividends etc.”
“Since so fundamentally it's a scam, is it a wonder other scams are built on top?”
Strongly agree with the point made about the miners being criminally overlooked in all of this. If crypto and Bitcoin are camouflaged pyramid schemes, the people at the top of the pyramid- even above the exchanges and the hucksters and the VCs, are the small handful big miners who have been doing it even before BTC was a few dollars each.
There's a huge misdirection in the very thin narrative about minors, which is that "everyone knows" they've always had to sell the entirety of their coin bases to break even. This is completely taking the miners at their word when there is absolutely no reason to believe any of it.
The reason the price is stabilized every time it should fall is because the miners, and the OG miners alone, have the ability to collectively throttle back on selling their newly mined coins to the market and can do so almost indefinitely because of the massive profits they realized on early gains held long term. This is the true source of number go up and I'm surprised how little attention it's been given, probably because miners are notoriously publicity shy. You'll notice they're never talked about it any of these articles.
> All the years and all the money spent on the mining/blockchain/smart contract/ICO/DAO/NFT/DeFi/Web3 series of bullshit "innovations" could have gone to real technology and real companies.
Really? I imagine all the effort simply redirected towards social media (bad), adtech (bad), fintech (mostly based on ZIRP, like BNPL), self-driving cars (pie in the sky) and gig economy. The only truly useful thing SV worked on in the past decade was Cloud.
Yeah, fair point. We could also include all the "blitzscaling" nonsense, which, given its ability to soak up far more capital, is much more attractive to VCs, allowing a pump-and-dump on a titanic scale.
But I saw so many entrepreneurs getting pulled into blockchain-ish spaces thinking they could do some good. Even given that most of the money would have gone to something else terrible, there were a lot of people who might have focused on actually useful things.
> Hopefully next time around we can be more discerning, more usefully critical.
Like after the destruction of democracy by social media? Or the implosion of the dot com bubble? How many more times does the tech industry get to just say "Hopefully next time!"
For what it's worth, I think that whatever we choose to do, we're going to get a lot less leeway in the future. I was just at a Trust & Safety conference. European legislators and regulators are very much cracking down on the social media space, and it's clear that years of slippery behavior from places like Meta have burned a lot of goodwill.
> If you rolled back every bitcoin transaction ever made you would end up with people in debt because the transaction fees were paid.
This can be said about every bank transaction that charges a fee as well. Not a crypto fan at all (I find it rather silly overall), however this is not a particularly strong angle to attack it from.
Are you really quoting fucking human trafficker Andrew Tate on economics?
Electronic funds transfer (including credit cards) increase the velocity of money significantly. This means more transactions, which means more overall wealth creation.
To say nothing of the fact that of that 1.5% fee, I'm recovering most, all, or more than it with things like cashback, rewards points, etc.
As noted by another poster, all transactions cost someone something on every monetary network. You're also completely ignoring all the benefits miners provide by securing the network etc...
Celcius, FTX, et al the many thousands of shitcoins are all scams or pyramid schemes without merit. Bitcoin, despite that fact that early adopters profit greatly, has many benefits to individuals and society as a whole but many people have simply closed themselves off to the possibility because they're unwilling, for mostly selfish reasons, to even consider the benefits.
> but many people have simply closed themselves off to the possibility because they're unwilling, for mostly selfish reasons, to even consider the benefits.
And many people have considered the benefits and have rejected the scheme anyway.
I'm curious, though... what do you mean by "selfish reasons"? That implies that such people are making a decision that disadvantages others in order to give themselves an advantage. I'm struggling to see how that concept applies here.
It's selfish to reject something beneficial to everyone because you won't benefit as much as others, no? Maybe jealousy is a better adjective.
You continue to call it a "scheme" but it was literally invented due to the corruption and malfeasance and "schemes" of the current banking system. Do you call those schemes and scams as well or are those just the ones we've deemed acceptable and necessary for some reason?
FWIW, I think the current system is unstoppable and inflation is necessary theft because that's just how it works but I do believe people should be able to save and not lose value. On a long-term basis, Bitcoin achieves that when essentially nothing else can because we've designed it that way.
We're all "rich" here and I get why most of us simply want that to continue.
> It's selfish to reject something beneficial to everyone because you won't benefit as much as others, no?
If I decide not to use cryptocurrencies, I am not denying anyone else from using cryptocurrencies. My decision disadvantages nobody. There is no social duty to use cryptocurrencies.
Also, if I disagree that cryptocurrency is "beneficial to everyone" (and I do), then I'm not being selfish for not taking part no matter what.
> You continue to call it a "scheme"
I did not intend "scheme" as a pejorative. I meant it to mean "plan" or "system". My apologies for the miscommunication here.
> We're all "rich" here and I get why most of us simply want that to continue.
Umm, what? I honestly don't understand what you mean by this.
