I've heard a lot on both sides. I very much respect Catherine Austin Fitts, and she says bitcoin is not safe from government intervention - so I think that means I'm on your side, Joel.
Bitcoin just doesn't work. BTC was taken over by hedge funders so it could be centralized. They insisted on hard limits so that the peer-to-peer network can only process 7 transactions per second. If every American used BTC, we could each make less than 1 transaction per year.
Bitcoin Cash (BCH) is a branch-off that increased those limits, but remains limited to low hundreds of transactions per second. Raising this would require a computer science breakthrough. Meanwhile, VISA achieves 20,000 tx/s or more. Without this, there is no Christmas shopping.
There is currently no cryptocurrency that can provide both security and the speed required to support a world economy. Possibly a system of cryptocurrencies could do it, if each town had its separate cryptocurrency, and a convenient system to trade them.
Joel, I consider myself an expert in large scale transaction processing. And I can prove it. Blockchain is completely unsuitable for large scale transaction processing (assuming a user like to receive a response within milliseconds rather than hours).
Bitcoin and blockchain should not be confused. Bitcoin is a pyramid game that ran out of control. Blockchain is a hyped software architecture that at best can be used for some small scale applications.
I have known this since the early days (after reading how blockchain works) but stayed out of this debate. I am not a very good debater, but trust on common sense.
By the way, fully on your side on all your covid related articles. Same thing, lack of common sense.
I have no time or interest in an online debate (not being a native English speaker), but willing to support in any other way I can.
My position on crypto is that it exists because the people who run the show want it to exist because we live in a world where upwards mobility has almost vapourized.
If one does not come from money - and have access to the best educational opportunities from a very young age - living the dream is close to impossible.
Lotteries exist to give the blue collar crowd hope that they can escape what is increasingly a difficult life - recall the days when a man could work and support a family and the wife was able to stay home and take care of the kids (or vice versa). Those days are long gone. The lottery is way to let off steam.
I see crypto as the educated man's lottery --- such people aren't going to be fooled that mobility exists by buying a lotto ticket. Rather they need to believe that if they work hard and intelligently they can still hit it big.
I know loads of young guys (I play hockey with some of them) who are playing the crypto game ... they live for it. They truly believe that it's more than a Ponzi scheme - if they make money it is because they are crafty investors.
Of course this all works when you have trillions of cheap $$$ surging through the economy + as Wolf explains incestuous cryptos pumping each other's numbers up and borrowing from each other to do so + a very good PR Machine to build hype and FOMO .... it works while it works... and it convinces these young fellas that they are Masters of the Universe (when all they really did was put money on red on the roulette wheel...)...
Even those who are not participating perceive this as upward mobility -- it creates a bit of general euphoria .... and it prevents people from becoming disenchanted with their lot in life and causing trouble.
The Fed could smash this in a minute - they could simply make crypto illegal -- and any bank assisting with converting crypto to $$$ gets hit with a massive fine.
Remember the NSA knows all - they KNOW who has traded --- prosecute a couple of people as a warning - and crypto goes to 0. In the blink of an eye.
Crypto exists because the Fed allows it to exist... it serves a purpose.
On a final note - great if people can play the ponze and get rich -- the problem is when you believe the hype and enter the cult --- you believe Bitcoin is going to 500k and you keep buying even at 60K+ ... cuz it's cheap .. you mortgage your house cuz you believe... then it crashes through 20k...
Then you are suicidal (or you rob your mother and buy at 19k to average down - and cuz it's still going to 500k).
Although Matt may think you are behind the Fast Eddy alias if you use it haha
It is difficult to engage in a debate with people who are captured by mass psychosis - I believe Crypto is another flavour of that... it's much the same reaction as I would get if I put your Australia analysis in front of a CovIDIOT.
China has repeatedly banned crypto, yet it's still being traded within that country. I'm reasonably certain that government is effective at shutting most other things down, but has failed everytime when it comes to crypto.
That's the essential beauty of the crypto concept and proven use. Anyone can send/receive crypto to/from anyone else as long as the receiving wallet address is provided to the sender. The wallet cannot be confiscated without the security key, which are very robust.
I see the current crypto market as similar to the dot com boom/bust of the late 1990s/early 2000s. The vast majority had no idea what they were doing, but it was the next big thing. Most dot-coms were worthless and had no actual value or use. However, after the collapse of the bulk of the companies and hard lessons learned, can you imagine the world without internet business?
And you know they are still buying how? It's anonymous right?
As I type this - every key stroke is monitored - I am in New Zealand so the NZ is monitoring it and storing it. If I were to buy Bitcoin they would know.
Let me take you back to the mid-90's. I was playing hockey for a team sponsored by a major player in the telecoms industry in Asia - and one of the senior employees played on the team (ended up as a partner).
He specifically warned me to never say anything compromising on a telephone - land line or mobile (which were starting to become popular) because --- in every country governments require that we install software on our system that allows them to monitor calls. We MUST install it - it is The LAW.
The way it works is that if you say a word like cocaine - or kill - or any other word that that triggers the software to alert Big Brother -- you will then be monitored more closely -- someone may be designated to listen to your call history to see what you might be up to. If you were cryptically speaking about doing a coke deal then you have problems -- if you were saying 'have you seen that new cocaine movie - it's great!' you go back into the hopper.
This is nearly 30 years ago.... ya think you are anonymous as you clatter away buying Bitcoin at under 20k 'cuz it's going to 500k and it's a steal'
BTW - the same Telecom's guys funded me in business that I started just after the Asian Financial crisis -- we are in the dotcom space in HK China and the region to this day. I have a decent understanding of how all of this is used by Big Brother to ensure compliance.
I fully understand the desire for some of the technologically minded to have Bitcoin be the (or at least a) solution to the endless debasement of fiat currencies. Theoretically, the use of a decentralized ledger is elegant and independent of controlling bodies but in practice, the overhead of maintaining the Blockchain is prohibitively resource intensive.
Anyone who properly understands human psychology should see that the reward mechanism and it's stabilizing variable hash rate for processing transactions simply leads to a computational war - one that is far from being productive.
A good healthy discussion to introduce an audience that may not know as much to the collection of us who know enough to have a healthy discussion. Some of the space is a bit toxic, and I've grown to understand that's part of the layer of trauma associated with the intracacies of the current systems. But by having some straight forward conversations, sometimes we learn from each other, and sometimes we introduce others to the concepts where we have different perspectives---then more people learn and become part of the conversation.
I just read Mathew Crawford's stack https://roundingtheearth.substack.com/p/the-cantillon-effect-is-currency. It's a well-written article and I appreciate the education. I am very leary of bitcoin and other virtual currencies. I can't touch it, and if the internet is taken down for any reason, I can't have access. Granted, I won't have access to my bank accounts then either, but at least with some hard currency and precious mentals I have something tangible in hand to trade should everything go south. The wooden nickel comes to mind...
The only effective use cases of a blockchain are as a cryptocurrency (which is only of use to libertarians, criminals or those seeking an unregulated diversifier within a portfolio) and for timestamping (there is little demand for this), because any system that has any dependency on data in the real world requires a trusted third party to validate the data, which renders a blockchain pointless (a database system would be cheaper, faster, more flexible, more scalable and easier to use).
Joel, I'm very interested in the Energy vs Bitcoin mining & running the ledger, in other words what happens when there are no more rewards for bitcoin mining - how does the ledger keep working. In a traditional mining operation someone has to pay the bills or it all stops.
When you solve a block, you don't just get the mining reward, you get all the fees from the transactions on the chain. My guess is that the fees will eclipse the mining reward before the reward disappears.
Yes, I've never heard a coherent response from Bitcoin advocates on this. Most ignore it as something that won't happen in the time frame that concerns them. The remainder make wishy washy statements of cooperative behavior through agreed (somehow) transaction fees.
Joel you came across as honest and fair, even if you do have your own self interest in blockchain it seems that you've thought this through and know most of the pluses and negatives. I agree also that crypto currencies won't get across the line, at least not for several generations. And at that point their negatives need to have been addressed. The idea that you can't spend outside a 5km radius or that you can't buy something after 6pm or that you can't buy an ice cream is complete tyranny. If they want to address CO2 in the atmosphere, well they could start with Crypto's emissions but should ditch their other totalitarian ideas.
Bit of a surprise for me. I still don't like your Zanzibar idea though.
Mathew on the other hand, well you gave him too much info. Liam was fine. Kristov got snarky a few times when you told him that his pet project, bitcoin was not up to it. There seemed to be a lack of understanding of it as well and hopefully Mathew forgot any information passed on by now as it doesn't conform to his own financial interests.
Here's wishing you the best this evening Joel. If possible, touch on block-chain tech. Ostensibly developed to provide legitimacy and trustworthiness, it will be the tool used to weaponize any CBDC.
There are so many points of attack. In my mind Tether is a huge one, don't forget to bring it up. Lack of transparency = automatic assumption of fraud until shown otherwise.
I've heard a lot on both sides. I very much respect Catherine Austin Fitts, and she says bitcoin is not safe from government intervention - so I think that means I'm on your side, Joel.
Bitcoin just doesn't work. BTC was taken over by hedge funders so it could be centralized. They insisted on hard limits so that the peer-to-peer network can only process 7 transactions per second. If every American used BTC, we could each make less than 1 transaction per year.
Bitcoin Cash (BCH) is a branch-off that increased those limits, but remains limited to low hundreds of transactions per second. Raising this would require a computer science breakthrough. Meanwhile, VISA achieves 20,000 tx/s or more. Without this, there is no Christmas shopping.
There is currently no cryptocurrency that can provide both security and the speed required to support a world economy. Possibly a system of cryptocurrencies could do it, if each town had its separate cryptocurrency, and a convenient system to trade them.
I'm sending along best wishes for a productive and healthy debate, but if you're opposed to Bitcoin I hope you lose it.
😅 😂 🤣
Joel, I consider myself an expert in large scale transaction processing. And I can prove it. Blockchain is completely unsuitable for large scale transaction processing (assuming a user like to receive a response within milliseconds rather than hours).
Bitcoin and blockchain should not be confused. Bitcoin is a pyramid game that ran out of control. Blockchain is a hyped software architecture that at best can be used for some small scale applications.
I have known this since the early days (after reading how blockchain works) but stayed out of this debate. I am not a very good debater, but trust on common sense.
By the way, fully on your side on all your covid related articles. Same thing, lack of common sense.
I have no time or interest in an online debate (not being a native English speaker), but willing to support in any other way I can.
You may find this useful in the debate - I've already had this debate with Mat on his blog...
https://wolfstreet.com/2022/07/09/leverage-interconnectedness-are-blowing-up-crypto-defi/
My position on crypto is that it exists because the people who run the show want it to exist because we live in a world where upwards mobility has almost vapourized.
If one does not come from money - and have access to the best educational opportunities from a very young age - living the dream is close to impossible.
Lotteries exist to give the blue collar crowd hope that they can escape what is increasingly a difficult life - recall the days when a man could work and support a family and the wife was able to stay home and take care of the kids (or vice versa). Those days are long gone. The lottery is way to let off steam.
I see crypto as the educated man's lottery --- such people aren't going to be fooled that mobility exists by buying a lotto ticket. Rather they need to believe that if they work hard and intelligently they can still hit it big.
I know loads of young guys (I play hockey with some of them) who are playing the crypto game ... they live for it. They truly believe that it's more than a Ponzi scheme - if they make money it is because they are crafty investors.
Of course this all works when you have trillions of cheap $$$ surging through the economy + as Wolf explains incestuous cryptos pumping each other's numbers up and borrowing from each other to do so + a very good PR Machine to build hype and FOMO .... it works while it works... and it convinces these young fellas that they are Masters of the Universe (when all they really did was put money on red on the roulette wheel...)...
Even those who are not participating perceive this as upward mobility -- it creates a bit of general euphoria .... and it prevents people from becoming disenchanted with their lot in life and causing trouble.
The Fed could smash this in a minute - they could simply make crypto illegal -- and any bank assisting with converting crypto to $$$ gets hit with a massive fine.
Remember the NSA knows all - they KNOW who has traded --- prosecute a couple of people as a warning - and crypto goes to 0. In the blink of an eye.
Crypto exists because the Fed allows it to exist... it serves a purpose.
On a final note - great if people can play the ponze and get rich -- the problem is when you believe the hype and enter the cult --- you believe Bitcoin is going to 500k and you keep buying even at 60K+ ... cuz it's cheap .. you mortgage your house cuz you believe... then it crashes through 20k...
Then you are suicidal (or you rob your mother and buy at 19k to average down - and cuz it's still going to 500k).
Hope that gives you a bit of ammo :)
Although Matt may think you are behind the Fast Eddy alias if you use it haha
It is difficult to engage in a debate with people who are captured by mass psychosis - I believe Crypto is another flavour of that... it's much the same reaction as I would get if I put your Australia analysis in front of a CovIDIOT.
China has repeatedly banned crypto, yet it's still being traded within that country. I'm reasonably certain that government is effective at shutting most other things down, but has failed everytime when it comes to crypto.
That's the essential beauty of the crypto concept and proven use. Anyone can send/receive crypto to/from anyone else as long as the receiving wallet address is provided to the sender. The wallet cannot be confiscated without the security key, which are very robust.
I see the current crypto market as similar to the dot com boom/bust of the late 1990s/early 2000s. The vast majority had no idea what they were doing, but it was the next big thing. Most dot-coms were worthless and had no actual value or use. However, after the collapse of the bulk of the companies and hard lessons learned, can you imagine the world without internet business?
And you know they are still buying how? It's anonymous right?
As I type this - every key stroke is monitored - I am in New Zealand so the NZ is monitoring it and storing it. If I were to buy Bitcoin they would know.
Let me take you back to the mid-90's. I was playing hockey for a team sponsored by a major player in the telecoms industry in Asia - and one of the senior employees played on the team (ended up as a partner).
He specifically warned me to never say anything compromising on a telephone - land line or mobile (which were starting to become popular) because --- in every country governments require that we install software on our system that allows them to monitor calls. We MUST install it - it is The LAW.
The way it works is that if you say a word like cocaine - or kill - or any other word that that triggers the software to alert Big Brother -- you will then be monitored more closely -- someone may be designated to listen to your call history to see what you might be up to. If you were cryptically speaking about doing a coke deal then you have problems -- if you were saying 'have you seen that new cocaine movie - it's great!' you go back into the hopper.
This is nearly 30 years ago.... ya think you are anonymous as you clatter away buying Bitcoin at under 20k 'cuz it's going to 500k and it's a steal'
BTW - the same Telecom's guys funded me in business that I started just after the Asian Financial crisis -- we are in the dotcom space in HK China and the region to this day. I have a decent understanding of how all of this is used by Big Brother to ensure compliance.
And China is the Biggest Brother on the planet.
If they want to stop crypto - they will stop it.
If they want to adopt crytpo they most certainly would simply launch their own. It's not difficult - there are nearly 10,000 of them https://currency.com/how-many-cryptocurrencies-are-there
This is a massive Ponzi scheme.
As I said, China has repeatedly failed to ban crypto.
As to the question of "if" they will make their own, they already have.
https://www.bbc.com/news/technology-58678907
https://www.cnbc.com/2022/01/31/china-names-blockchain-trial-zones-after-crackdown-on-cryptocurrencies.html
https://www.coindesk.com/layer2/2022/05/22/china-cant-seem-to-stop-bitcoin-mining/
https://www.blockchaintechnology-news.com/2022/07/2-6-million-shenzhen-residents-sign-up-for-digital-yuan-airdrop/
How do you know they are trading it if it is anonymous?
Ah... the PR Team who are paid by crypto platforms planted paid placements telling you that - right?
Same people who place stories about how Safe and Effective Covid Vaccines are - right?
I fully understand the desire for some of the technologically minded to have Bitcoin be the (or at least a) solution to the endless debasement of fiat currencies. Theoretically, the use of a decentralized ledger is elegant and independent of controlling bodies but in practice, the overhead of maintaining the Blockchain is prohibitively resource intensive.
Anyone who properly understands human psychology should see that the reward mechanism and it's stabilizing variable hash rate for processing transactions simply leads to a computational war - one that is far from being productive.
A good healthy discussion to introduce an audience that may not know as much to the collection of us who know enough to have a healthy discussion. Some of the space is a bit toxic, and I've grown to understand that's part of the layer of trauma associated with the intracacies of the current systems. But by having some straight forward conversations, sometimes we learn from each other, and sometimes we introduce others to the concepts where we have different perspectives---then more people learn and become part of the conversation.
Cheers, buddy.
I just read Mathew Crawford's stack https://roundingtheearth.substack.com/p/the-cantillon-effect-is-currency. It's a well-written article and I appreciate the education. I am very leary of bitcoin and other virtual currencies. I can't touch it, and if the internet is taken down for any reason, I can't have access. Granted, I won't have access to my bank accounts then either, but at least with some hard currency and precious mentals I have something tangible in hand to trade should everything go south. The wooden nickel comes to mind...
If we're down to 'there's no internet and nothing is real that I can't touch', we've got far far far bigger problem than bitcoin not working.
Supply chains rupture - we starve
Trade-Off
Financial System Supply-Chain Cross-Contagion: a study in global systemic collapse.
David Korowicz
chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/http://feasta.org/wp-content/uploads/2012/10/Trade_Off_Korowicz.pdf
The only effective use cases of a blockchain are as a cryptocurrency (which is only of use to libertarians, criminals or those seeking an unregulated diversifier within a portfolio) and for timestamping (there is little demand for this), because any system that has any dependency on data in the real world requires a trusted third party to validate the data, which renders a blockchain pointless (a database system would be cheaper, faster, more flexible, more scalable and easier to use).
Joel, I'm very interested in the Energy vs Bitcoin mining & running the ledger, in other words what happens when there are no more rewards for bitcoin mining - how does the ledger keep working. In a traditional mining operation someone has to pay the bills or it all stops.
When you solve a block, you don't just get the mining reward, you get all the fees from the transactions on the chain. My guess is that the fees will eclipse the mining reward before the reward disappears.
Yes, I've never heard a coherent response from Bitcoin advocates on this. Most ignore it as something that won't happen in the time frame that concerns them. The remainder make wishy washy statements of cooperative behavior through agreed (somehow) transaction fees.
The agreed transaction fees are already a thing, they will simply be more of the reward as the reward halves repeatedly.
Really interesting debate! Agree with you that centralisation of bitcoin's development is a serious threat.
You mention you have a Telegram channel where you talk about blockchain, but I can't find it. Any chance you could link to it?
Joel you came across as honest and fair, even if you do have your own self interest in blockchain it seems that you've thought this through and know most of the pluses and negatives. I agree also that crypto currencies won't get across the line, at least not for several generations. And at that point their negatives need to have been addressed. The idea that you can't spend outside a 5km radius or that you can't buy something after 6pm or that you can't buy an ice cream is complete tyranny. If they want to address CO2 in the atmosphere, well they could start with Crypto's emissions but should ditch their other totalitarian ideas.
Bit of a surprise for me. I still don't like your Zanzibar idea though.
Mathew on the other hand, well you gave him too much info. Liam was fine. Kristov got snarky a few times when you told him that his pet project, bitcoin was not up to it. There seemed to be a lack of understanding of it as well and hopefully Mathew forgot any information passed on by now as it doesn't conform to his own financial interests.
Here's wishing you the best this evening Joel. If possible, touch on block-chain tech. Ostensibly developed to provide legitimacy and trustworthiness, it will be the tool used to weaponize any CBDC.
I'm with you!
I'm betting Mathew will convince you!
He has failed so far. That's why he's bringing support this time?!
There are so many points of attack. In my mind Tether is a huge one, don't forget to bring it up. Lack of transparency = automatic assumption of fraud until shown otherwise.