1. We trust the coders to know what is best for us.
2. You can write perfect code so that our money is safe.
3. The price will never plummet.
I've observed:
1. Mt. Gox Failure
2. DAO Failure
3. First BTC price crash
4. USDT regulatory concerns
5. Lack of learning from failures
6. Politics still exist, they just moved to the coding layer
7. Willful ignorance of the scams and crimes cryptocurrencies has enabled
7.1 Because somehow cryptocurrency is better for us.
8. Hype over price security and software security
8.1 Because somehow cryptocurrency is better for us.
Trust in USDT is centralized in the corporation Tether and has none of the benefits you mentioned. Trust in BTC is hoping (praying?) that the price doesn't crash, and software doesn't control the price, humans do.
I can use blockchain apps all of my life and even if there are people (now) making billions of USD worth of Tether transfers, I never will be forced to accept it, because I don't trust them. That is exactly what "democratized trust" looks like.
> 1. We trust the coders to know what is best for us.
> 2. You can write perfect code so that our money is safe.
> 3. The price will never plummet.
Nobody is asking that. The source code is public, read it and decide for yourself. Good luck doing that at your local bank. There are plenty of stablecoins, you don't have to take on crypto exposure.
> 1. Mt. Gox Failure
Totally irrelevant.
> 2. DAO Failure
Sure, a public commons infrastructure will elicit a lot of bad projects. Just like the vast majority of open source projects are bad. This is not an indictment of open source.
> 3. First BTC price crash
Irrelevant.
> 4. USDT regulatory concerns
Use one of the many other stablecoins, then. This is the beauty of the system. It's actually open, so there are a diversity of issuers. You could even start one yourself, if you wanted.
> 5. Lack of learning from failures
There is an enormous amount of learning from failures. If you believe there isn't, you aren't paying attention.
> 6. Politics still exist, they just moved to the coding layer
Yes, this is true. However, this layer is thin, by design. That means the layers above it, which implement most of the relevant functionality, are a diverse ecosystem of choice. Contrast to the thickness of politics in other domains.
> 7. Willful ignorance of the scams and crimes cryptocurrencies has enabled
> 7.1 Because somehow cryptocurrency is better for us.
New technology brings about scams roughly in proportion to its power. The internet enabled tons of scams. Fiat currency enabled tons of scams. Coinage enabled tons of scams. And so did banks, particularly of the fractional reserve variety.
That doesn't mean scams are good or should be tolerated. But it takes time to develop the social and political conventions to deal with them. I believe that process is taking place in crypto, though perhaps not as quickly as we'd like. I think if you look back at the history of other comparable technologies, you will see that crypto is pretty far ahead of the game in this regard, though.
> 8. Hype over price security and software security
> 8.1 Because somehow cryptocurrency is better for us.
Sure. Lots of elements of crypto are overhyped. Overhype comes along with any transformative technology. See hype about carbon nanotubes, nuclear power, 3d printing, etc. Hype is an indictment of people, not technology.
> Nobody is asking that. The source code is public, read it and decide for yourself. Good luck doing that at your local bank. There are plenty of stablecoins, you don't have to take on crypto exposure.
Most people are not advanced coders and will never be. So most people still have to trust a random coder (be it close friend or someone on the news or online). If something happens to your money because someone took advantage of you in the code then good luck getting anything back. At least with banks there are laws around this stuff and you can actually get your money back. For average person this is still the way to go.
There's also a massive unregulated conflict of interest here: reviewing the source code will require experience which someone is unlikely to have without also having a financial interest in expanded use of cryptocurrencies. As we've seen so many times over from all of the cryptocurrency boosters who talked up code or services until a major problem occurred, this can cloud someone's judgement even if they're not intentionally scamming you.
That’s not what we’re talking about: if I hire a lawyer to review a contract, they’re not making decisions based on a need to boost USD to protect their ability to find a buyer.
Similarly, while they’re both fiat currencies the USD is orders of magnitude stronger (inordinately more use, links to durable value, etc.) which means that my hypothetical lawyer’s ability to shift the value is extremely small.
Even actual government officials have relatively little power this way: there are many of them and the need to get re-elected means they’re far less likely to try the kind of pump and dump scams which are routine in the cryptocurrency world, especially given the likelihood of scrutiny and punishment.
No need for pump and dump when they are raking in their money by trading on insider knowledge, getting favors from lobbyists and by getting their cushy board seats at banks after they leave office.
Really what is worse is that it will create "Software Lawyers", which are like lawyers but worse because they won't be members of a bar association, and might not have your best interest at heart.
> Most people are not advanced coders and will never be. So most people still have to trust a random coder (be it close friend or someone on the news or online). If something happens to your money because someone took advantage of you in the code then good luck getting anything back. At least with banks there are laws around this stuff and you can actually get your money back. For average person this is still the way to go.
That's certainly true. However, you have the option to learn, and the option to review it yourself. You also have the option to choose which experts to delegate your trust to. Whether or not this system is better than the system of just trusting big banks a lot with no ability to verify personally is up to you. It is, however, a novel trust model, and one that it's clear that some people prefer.
I think it's also clear that this model has advantages over the other. The traditional model has advantages as well. Neither is strictly better in all dimensions. Almost no technology is strictly better than its predecessor in all dimensions, though.
So this is like the "Software Lawyer" argument I stated above. If I hire a lawyer to review a contract in finance, I expect him to put his greed aside while he's working for me. This is well regulated, and while isn't perfect, keeps most lawyers honest.
With software there is no regulation. What happens when the software expert finds a bug in a smart contract? Is it illegal to sell the exploit? Can he exploit it for his own good? The smart contract is the contract after all.
Who defines what "conflict of interest" means? The software guy who wrote the smart contract or is it in the smart contract itself? How would I know if there's a backdoor in the smart contract if greed is the primary motivation for a software engineer, and every other software engineer I hire to look at that contract?
Yes, those are problems. Just like the existing textual contract system has problems, so does this new system. The new system is, obviously, much newer. The practices around the modern textual legal system have grown up over hundreds and thousands of years of refining practice. The fact that the crypto ecosystem is not yet as developed in terms of questions like that is unsurprising.
What is true is that crypto enables a new mechanism for doing something vaguely analogous to parts of the existing legal system. This new mechanism has disadvantages to be sure, but it also has advantages (for instance, it is border and jurisdiction neutral, the code runs the same everywhere, no matter what). I am certainly not arguing that crypto is strictly better than the existing legal system. It's not. It is just an alternative that is useful in some situations, and worse in others.
Over time, I think the domains in which it is useful are likely to expand. They are unlikely to replace the entirety of the existing legal system, of course. But I think the existence of a border neutral code layer for asset transfer and custody is a useful thing for certain applications.
There’s a difference between choosing to trust the claims of someone who you believe has expertise that would be expensive or impossible for you to develop yourself, and having no option but to “trust” a certain party in order to perform certain actions. I think when most people talk about “trustlessness” in the context of decentralized systems they’re not saying you would never trust a surgeon, or a pilot, or a YouTuber who reviews smartphones, or an audit of a computer system.
you don't have to trust anyone or examine the code -- simply watch what happens. btc as a protocol has gone a decade without any security flaws discovered or exploited. shitty smart contracts get exploited.
It's not open source versus closed source, and loss of money is never irrelevant.
It's the alignment of what I value (security, safety, government guarantees) versus what you value, which is ... well I don't know.
I feel it's one of the following though:
Decentralized trust is great for the world.
And/Or
You have a huge stake in crypto, and you need others to believe in it as well, or your crypto assets will fail.
I just can't tell whether you're in it for the money or to change society. It's fine if it's both, but your arguments justifying crypto don't share the greed angle.
I just feel like people should know who they're arguing with.
Banks are literally closed source. Crypto is literally closed source. So, yes, it is.
> and loss of money is never irrelevant.
Loss of money from centralized exchanges is irrelevant to the decentralized consensus technology. These are completely orthogonal concerns. Normal financial institutions get hacked, and they also operate ponzi schemes. The fact that this can happen to comparable centralized crypto services is orthogonal to the technology.
> It's the alignment of what I value (security, safety, government guarantees) versus what you value, which is ... well I don't know.
I think i've pretty clearly articulated what I think the technology is for. Just go back and read what i've said.
> I just feel like people should know who they're arguing with.
Of course i'm invested in it, to a degree. Anyone who believes in a technology should be invested in that technology. You shouldn't trust them if they're not, because if they haven't invested, they don't actually believe in it.
That being said, crypto very well may not turn out to be useful for the world. It enables new possibilities for social and economic organization. Technologies like that are very rare, and they are usually transformative and tremendously economically valuable. This one could be an exception, but it'd probably be the first.
Awesome. I appreciate that. That tacit acknowledgement is lacking in all pro-crypto posts.
Most silicon valley companies want to make a shit ton of money with their VC capital. They say things like, "We'll make the world better..." but that's really just what they tell themselves so they can feel better about making a metric shit ton of money. And there's nothing wrong with that since that's what drives the economy.
But it's unchecked greed that caused 2008, and that was human behavior.
If anything crypto appears to enable more bad human behavior: money laundering for drugs and human trafficking, rug pulls, stable coins that may or may not be literally printing money, payoffs for ransomware and blackmail...
At what point do you check your greed and want to solve the unsexy problems that crypto creates in our society?
> Awesome. I appreciate that. That tacit acknowledgement is lacking in all pro-crypto posts.
To put a more fine point on it, i'd say about 10-15% of my net worth is exposed to crypto.
> Most silicon valley companies want to make a shit ton of money with their VC capital. They say things like, "We'll make the world better..." but that's really just what they tell themselves so they can feel better about making a metric shit ton of money. And there's nothing wrong with that since that's what drives the economy.
This is certainly true, but I think it's a little misleading. If you actually believe a technology is transformative, investing in it probably makes sense. So the fact that VCs are talking their own book IMO is mostly just evidence that they believe what they're saying.
Certainly it's true that occasionally people say things they don't believe in order to offload bad assets on unsuspecting retail investors. And some of the crypto VCs might be doing that sometimes, but if they believed that, they wouldn't keep investing in the category, I don't think.
> But it's unchecked greed that caused 2008, and that was human behavior.
True, but unchecked greed also caused the industrial revolution, so, it has some benefits too.
> If anything crypto appears to enable more bad human behavior: money laundering for drugs and human trafficking, rug pulls, stable coins that may or may not be literally printing money, payoffs for ransomware and blackmail...
Crypto definitely enables lots of bad things. No question about that. It also enables some good things though, like the ability to safely (in relative terms) store value outside of kleptocratic and/or irresponsible regimes (e.g. venezuela).
It also facilitates a certain kind of forced transparency. For instance, let's say a country has problems with government officials seizing property deeds. The officials simply change the title and say "sorry you actually never owned this land". A citizen has no recourse here, they can't even prove the government did this, because the government warehouses all the records. If, instead, every property transfer had to be recorded on a decentralized blockchain to be considered legitimate, then at the very least any citizen to whom this happened could prove to the public that it was stolen from them. Of course, that doesn't mean they get it back, because physical possession still flows to the people with the guns. But it does mean they can no longer effectively deny it, and I think that has a lot of value in regions of the world with less trustworthy governance.
> At what point do you check your greed and want to solve the unsexy problems that crypto creates in our society?
Well, a lot of the problems crypto has created are really revealing problems that were latent anyway. Ransomware is really the problem of insecure software, for instance.
The problem of money laundering is an interesting one, and I think sort of poses a philosophical problem about event ordering. What I mean by that is that what crypto really gives people is genuine monetary self-sovereignty. Having that self-sovereignty enables money laundering and tax evasion, for sure.
However, I have to believe that in a world in which monetary self-sovereignty was the norm before the surveilled financial system (e.g. supposing crypto was created before SWIFT), we would view that sort of sovereignty as a fundamental right.
As a thought experiment, consider a world in which DNA sequencing was invented 100 years ago, and up until 10 years ago the government had been collecting everyone's DNA at birth. They had then been going on to solve all sorts of crimes with it, and probably occasionally harass protesters and dissidents and other undesirables and so on. But then in 2010 someone invents a pill that you can take that alters the DNA base pairs that are used for that surveillance (without side effects). This pill would re-establish the biological privacy that we accept as a natural right today. However, undoubtedly people would make the same arguments you're making now, that this is a great step backward in our crime fighting ability, etc, And they'd be absolutely right.
But I think the question we want to ask here is what makes sense as a set of natural rights in this context?Should people have sovereignty over their own money? Transactional privacy? If not, why should they have biological or medical privacy then? It seems to me that the lack of financial privacy is a contingent artifact of the evolutionary path of technology, not some moral truth arrived at through democratic means.
What you're asking us to trust is that:
I've observed: Trust in USDT is centralized in the corporation Tether and has none of the benefits you mentioned. Trust in BTC is hoping (praying?) that the price doesn't crash, and software doesn't control the price, humans do.