This is part of it, but that's faulty reasoning. Just because there's a lot of hype and fraud surrounding the technology and network does not mean that the technology and network is hype or fraud.
Another factor is that we're very talented at finding all the reasons something new won't work, and not so good at understanding how something flawed can still be useful.
Exhibit A is the infamous Dropbox comment: https://news.ycombinator.com/item?id=9224
But fundamentally, most of us, like most people generally, fail to understand what money is. We use it every day, so we all think we understand it. Money seems tangible and valuable, but it's all just a very powerful social construct that's backed by nothing more than collective belief and utility.
The mind rebels at such a flimsy foundation, so many of the criticisms aimed at cryptocurrency are equally valid when aimed at dollars or yen.
Maybe we're doomed to an Eternal September of repeating the same arguments in an endless loop for decades more. Please, let's hear the story of Dutch tulips again, or how dollars are actually backed by taxes or the military or buying cups of coffee.
If we listened to the nattering nabobs of negativism, we'd never invent anything truly novel.
It's a buzzword that's used blindly in the hopes of attracting capital [2] that has no real meaning. Out of a dozen blockchain related job offers I was approached with, not a SINGLE founder could answer simple questions about how to assure verification or prevent blockchain manipulation.
Blockchain is up there with fad diets, crazy health claims for boring foods, and nonsense cancer treatments. Does it have a potential role? Sure, it'd probably be kind of a cute feature in a game.
[1] https://www.investopedia.com/terms/1/51-attack.asp [2] https://www.wsj.com/articles/bringing-blockchain-to-the-coff...
1. It has become more of a speculative instrument than an actual currency. People are more concerned about making money buying/selling/holding BTC. Defeats the original purpose of a "decentralized currency"
2. Not sure that decentralized currency is a good thing. Some things need to be regulated unfortunately. Yes, we all hate the central banks etc but I would trust a regular currency anyday over BTC. Not to mention that you are at the mercy of these "wallets" or even worse "centralized wallets" like coinbase etc which again defeats the purpose in my opinion.
3. It wastes electricity. A lot of it just to mine. Why do we need to mine it again ? Oh it is because there is only so much of it ? Is that a good thing ? I don't know.
4. Most importantly: adoption. My mother has no idea what BTC is and will ever know. It is far too away from being a currency that can be used by regular people. Perhaps that day will come but not yet.
5. Too many scams due to the gold rush of BTC. Again, that is a bad thing.
Disclaimer: I don't know much about BTC but still have these thoughts about it.
My $0.02: it wastes electricity to solve a non-problem.
> From 1 January 2016 to 30 June 2018, we estimate that mining Bitcoin, Ethereum, Litecoin and Monero consumed an average of 17, 7, 7 and 14 MJ to generate one US$, respectively. Comparatively, conventional mining of aluminium, copper, gold, platinum and rare earth oxides consumed 122, 4, 5, 7 and 9 MJ to generate one US$, respectively, indicating that (with the exception of aluminium) cryptomining consumed more energy than mineral mining to produce an equivalent market value.
> During this period, we estimate mining for all 4 cryptocurrencies was responsible for 3–15 million tonnes of CO2 emissions.
That being said I still have not found the problem that it is the solution for other than addressing our CTO's case of FOMO.
Honestly, trust the companies that obey the laws more than those trying to create a lawless society
- Lots of crypto links posted to HN are scams or have no technical merit
- No one has come up[1] with a use case for blockchain that actually requires blockchain, outside of cryptocurrency (which is something non-technical people and speculators don't understand or won't admit)
- Because of rampant scams and speculation, a lot of online blockchain/crypto conversations have a high noise-to-signal ratio
1. https://hackernoon.com/ten-years-in-nobody-has-come-up-with-...
It's easy to create data that can't easily be destroyed. Back it up. You don't need a cryptographic, anonymous data mutation algorithm to do that. Just copy it to more places.
And as far as not having one gatekeeper... none of those things have one gatekeeper anyway. Who is lamenting that there's a single gatekeeper for their health history? If anything, people are lamenting the opposite -- that it's such a mess where multiple people have to cobble it together from disparate records formats.
To paraphrase something once said about JavaScript: the useful aspects of blockchain aren't new, and the new aspects aren't useful. Immutable (aka append-only), distributed, encrypted databases are useful! They are not blockchains, though.
Personal anecdote: a friend of mine was working on a project to utilize extremely counterfeit-resistant holographic tags to authenticate organic produce in China (where anything can be faked). 2-3 years and he still didn't have any significant customers. Enter Blockchain. They replaced the tag with a QR code, "blockchain cannot be faked" mantra, and within 6 months got $4 million investment and some customers. So when you scan the QR code, it opens a web page that shows some fancy data like id, date of packaging, etc. Who provides this data? The company. Who provides the web page? The company. Who can alter this data in any way they want? The company. And now the punchline: there is no blockchain in the code. Zero.
Look at how the concentration of wealth is more skewed in cryptos than IRL.
Other than Bitcoin, three other coins that are sometimes talked about here are Ethereum, Monero, Zcash.
Ethereum was the first ICO. Many other tokens operate on its blockchain.
Monero is an open source project with lots of development and progress (third behind Bitcoin and Ethereum). Its transactions are private.
Zcash is open source but mainly developed by a for-profit company and uses interesting mathematics. Its transactions are public, with the option of being private.
Disclaimer: I'm only "invested" in one of the three coins I mentioned.
The primary property of a good currency is stability. The crypto currencies are exactly the opposite.
I like smart contracts but I don't think public/permission-less blockchains are feasible/very useful in the real world. Engaging in a tech and electricity spending race doesn't look like a good way to verify transactions and protect the blockchain against attacks.
I like permissioned blockchains.
Why is it that blockchains weren't invented sooner? I'll contend that you'd be laughed out of any distributed systems conference if you suggested any protocol where the workload capacity doesn't increase when you add nodes.
If you have ten traders who trade under a buttonwood tree, then having ten copies of the database makes the system bulletproof. If you have ten million traders, there is no additional gain, but there is a huge cost because you have ten million copies of the database.
Blockchains attract people who know nothing about money or technology the same way that pot startups attract stoners. It's just a bad scene.
Ripple is nothing more than a bank coin. It's not a cryptocurrency.
It's over-hyped in general. Beyond that, often implemented in was suggested that don't really add much value compared to any number of other less complicated solutions.
If you are in a situation, where you have competing parties not aligned who want to ensure a given transaction is applied, and don't mind the implementation of that transaction being completely public, then blockchain might be the right solution.
If you are wanting to use cryptocurrency for financial transactions, then there is some merit, but in many cases suggested it's effectively a corporatist overload control over currency (such as Facebook's currency suggestion). If it's actual bitcoin or a handful of other alt-coins, at least it's decentralized but not as anonymous as many think. It's also, in general difficult to use without some centralization.
In the end, someone will win in this game. My guess is the banks behind the winner (MasterCard and Visa are backing FB's Libre venture). Given the actions against people with unpopular views (even if they are wrong thinking assholes), it terrifies me. Freedom to exchange property, and currency is a stand in for property, is a big deal and at least as big a deal as speech.
HN tends to shun Blockchain because it has a non trivial amount of fraud and amature hour to it... IMHO. Too much focus on the marginally useful tech, and not enough on the outcomes (i.e. CO2 from mining) and solving real problems. Too much neolib. Forgetting no one really wants their finances made public to the world.
Besides, I don't think it's particularly more negative on cryptocurrencies - go to any other internet forum (that are not specialized in cryptocurrencies) and I think you'll find a similar mixture of opinions.
Finally, "Google also invested in X" isn't a very good counter-argument here. Have you seen some HN comments when Google is being discussed?
That's where a lot of negative opinion comes from.
They work with data tracking companies, think Palantir for cryptos
Or it's psychological and many feel better believing that is a scam because they missed the run up despite likely being knowledgeable about bitcoin years ago and decided to ignore it.
The bigger picture, in my mind, is that in the future you should be allowed to choose your citizenship, which may be something like a digital country, and decide for yourself what sort of government you want to live in. Cryptocurrency enables that future more so than anything else that currently exists.
I can't speak for all of HN but I seriously doubt there was ever a need for the technology to begin with.
I've read numerous investigative articles on Bitcoin, in particular, that document the environmental impact and harm it does to workers who live in remote data centers. The situation is poor. And few, if any, bitcoin enthusiasts see these as problems. From what I understand the consensus among bitcoin enthusiasts is that we'll technology our way out of this and somehow we'll live in their techno-libertarian-utopia once they figure these things out.
Frankly I don't share their ideology.
Bitcoin decentralizes currency and leaves no one entity in control. Hurrah, the government can't stop you from moving money as you see fit. Except that most of the time, the government is stopping people from doing things that were made illegal for very good reasons. Money laundering of proceeds of crime, terrorist financing, tax evasion. You can debate all day about whether taxes are inherently evil, but right now the law says they are legal and you've gotta pay them. Saying "No worries man, I've got a NEW currency that the government can't stop" doesn't make it not a crime.
All the while, it's not actually free. We're burning huge amounts of energy to do mining, and the costs have to be passed on to someone. Miners get free BTC for mining, but that's a closed system- someone eventually must pay real currency for that energy being used. And it's getting expensive given the number of miners. (Plus, a lot of them are China which is using coal as it's primary energy source, which is killing people from pollution!)
And finally, there's no inflation/deflation controls. A currency's utility is increased by it's stability. Not knowing if my BTC will double in price or drop by half in the next 2 weeks means every day is a gamble. If this were my only currency, I'd be terrified about buying groceries.
Oh, and let's not forget that the huge spike in BTC prices in the last few years were found likely to have been caused by manipulation.
I love crypto and think bitcoin/blockchains are a really neat technology. But I just wish they weren't here, in the real world, because they seem to be a net-loss for the world, and a Ponzi scheme.
Edit after getting a coffee: ... okay, that was a bit of a rant...
In terms of reducing governmental control, sure this isn't much of a problem if your government is altruistic. Governments do not have a great long-term track record here. In Venezuela for example, many would say Bitcoin is solving a very real problem. You're right about its ability to be used for illegal activities, however the same could be said for most technology: encryption, the internet.
In terms of energy, this can be a criticism of almost all currencies and stores of value. This real-world expenditure is much of what gives it value, especially early on. Gold is valuable because of the difficulty in mining/acquiring it. Even national currencies are valuable due to the resources committed by their military, or the military's of that nation's allies. People might argue it is GDP, but GDP does not mean much if you cannot defend it.
Manipulation and price swings are a valid concern, but no other currency is immune to those either. Silver for example has had very widespread manipulation in the past. Silver and gold have probably still been a net-positive.
Bitcoins primary purposes today consist of: 1. buying bitcoins in the hope that they're worth more tomorrow, and 2. using bitcoins to buy illegal drugs on the internet. And the only reason #2 is declining is because so many people are doing #1 that it's getting too expensive in terms of fees to use it for #2.
> In terms of energy, this can be a criticism of almost all currencies and stores of value.
You're comparing fixed, one-time capital costs with ongoing variable costs. Transferring gold from one human to another involved handing it over. No costs there. Transferring bitcoins requires an increasing amount of energy as the rules make it harder and harder to complete a block.
> Manipulation and price swings are a valid concern, but no other currency is immune to those either.
When was the last time your USD bank account suddenly became worth twice as much, or half as much? Central banks can utilize price control mechanisms to carefully maintain inflation rates. Most aim for 2% per year, and most hit their targets pretty accurately. Bitcoin cannot offer that.
As for blockchain I think we've seen a number of "solutions" to problems that are adequately solved by a database.
Firstly its a panopticon, not anonymous
Secondly, it has a transaction rate of <10 a second Globally.
Thirdly, its chowing down huge amounts of power for no real gain
Fourthly, its snake oil. Its value comes from its mystique. As a store of wealth its horrifically expensive, as a trading currency, its too slow, you might as well buy gold.
Yes, its has a neat idea behind it, but blockchains are inherently niche. They have very few applications outside exceptionally high value, low transaction, zero trust systems.
Etherium and its smart contracts are inherently flawed, because they are not smart, or contracts. Unless your "contract" has a binary outcome, that is faultlessly measurable, then they aren't for you. The entire point of a contract is that there is a third party capable of issuing binding resolutions, using all available evidence. Etherium gives you none of that, despite the hype.
The only thing that might be worthy of a blockchain is something like the changelog of wikipedia, but then its not worth the spectacular cost. Just keep a couple of mirrors.
2) HN is for more accepting and enthusiastic about new ideas than the general population.
More like 40 years: https://en.wikipedia.org/wiki/Merkle_tree
The only thing that's new about blockchain is that on top of being a Merkle tree, it wastes a ton of energy.
Ethereum, for providing smart contracts, that enabled many ICOs.
Monero/ZCash for being private.
All other currencies are mostly just clones of the 3 (meaning they can suffer from 50%+1 attacks), or remove the main feature: trustless transactions.
In general, unless a currency provides a novel consensus algorithm, that brings something new to the table, it would actually be better off as a token on one of the above. If it is not, likely it is a scam/money grab.
All other projects do not really need blockchain, with a rare exception.
Disclosure: I own ETH and BTC.
ETH enabled a vast amount of scammers and BS artists. Monero isn't actually private, it's been broken. Bitcoin is the original, but even it has changed many times over the years.
Stellar is not trustless.
> ETH enabled a vast amount of scammers and BS artists.
I believe this is not relevant to a technical discussion.
You are probably right about Monero's limits in comparison to ZCash. But, TBH, I am not following their development, because I prefer lack of anonymity.
Funny story: I'm a non-believer. However sometime this year I bought bitcoin to buy some stuff. By the time I got home its value decreased too much and I no longer had enough bitcoin to buy what I wanted. Now I've found out that my bitcoin is worth a considerable amount. Did I cash out? Of course!
Do I feel "smart" about this investment? Of course not. It's just a gamble and pretty much this is the story of bitcoin. Would I "invest" again? Not really. I don't need this kind of investment for the same reasons I don't do gambling in my spare time. I think gambling is a weakness.
I would like to point out that I'm in a category that I think many HNers are: I'm critical of Bitcoin, yet I hold some (been involved since 2010, when I mined). Most of my criticisms are legitimate even while the price is rising; again, price is tangential.
Another bold innovation from the fintech industry! Imagine if that happened with regular bank accounts.
