If you watched the Super Bowl this year, it was hard not to notice that cryptocurrency had fully arrived. Even Larry David was hawking crypto. But over the past several weeks, the crypto markets, like other markets, have been melting down. Some coins have completely imploded. Some crypto banks have shut their digital doors, refusing to give customers access to their money. And companies like Coinbase are laying off workers. Crypto winter has arrived.
Much more hype than reality. Plus it's a world destroying disaster for the environment since it wastes so much electricity. And it's extraordinarily volatile. If I wanted to gamble, which I do not, I'd move to to a tacky wasteland like Las Vegas long before I'd invest a penny in bitcoin.
And NFTs are beyond belief, the height of absurdity. The Bored Ape Yacht Club (Bored Ape Yacht Club???) which has lost hundreds of thousands of dollars in the past couple of months proves there's a sucker born every minute.
We live in an insane time where the president of the United States, whom I made the mistake of voting for, thinks that men can be women. And people are afraid to state what was obvious over two years ago, that covid escaped from a sloppy lab in Wuhan. So it's not surprising that the whole world has jumped the shark.
While crypto is ultimately going to be a hollow failure, there is merit in the blockchain technology that enabled it. But even that has issues. I used to think that a non-managed system of financial settlement was an incredibly powerful thing.
But the fact that it relies on ever-increasing electrical usage (via mining) means that it is hard to imagine bitcoin lasting another 10 years let alone 100. Creative concept, but fatally flawed.
Being a cryptoskeptic to being with, after listening to this podcast I'm still with Mike. The questions Bari brought to the table were excellent but with one or two key questions of mine missing.
Pomp said crypto will get rid of the elites. Crypto is like every other new investment vehicle; the slobs (you and me) get in on the ground floor but after some evolution weeds a number out, they become the elites that count on you participating but NOT being successful. So, its nothing new in those regards.
Question 1: What about safety of my savings? If I deposit my meager savings in a bank and it goes under or gets robbed, then I know my government will protect me and my money is not lost. A run on the bank still protects me.
However, with crypto, if it gets stolen, the cryptovault goes bankrupt or out of business, or there is a run on the wallet company, then I lose everything. We can see this happens all the time! Maybe in the future it won't and maybe there will be insurance, but right now, its a wild west out there with NO US Marshalls hunting down bank robbers.. well, successfully. When hostile government backed entities (North Korea's hackers and Russia's Internet Research Agency) are out there to get your money with no recourse, why would I want to risk it?
Question 2: Like any investment vehicle it can be manipulated? What protects us from that? Nothing. The very fact that it exists outside government control or central supervision makes it ripe for evil actors. Let us say there was a farm where everyone can plant, grow, and harvest. Evil Bob decides to wait for you to plant and grow. But, without contributing anything he comes in a day before you plan to harvest with his buddies and their trucks, and they take everything.
Ridiculous? What about the stock manipulation of GameStop? You want that for your currency?
Furthermore, the fact that its not based on a country's debt, performance, monetary policy (etc.) and has NO governance , leaves it completely open to random market forces and the whims of bad actors.
As much as you want to tout the ability for evil governments to be unable to track or control transactions, Pomp completely ignored that this also makes it ripe for evil governments and terrorist organizations to exploit it. One of our biggest IT threats, ransomware, is paid in Bitcoin. I propose that ransomware has become an even bigger threat BECAUSE of Bitcoin.
The final thing I want to add was kudos to Mike's last couple of points. Pomp and other supporters of the crypto world appear to either live in an extreme fantasy world or have ulterior motives for you to get in and try to buy thus driving the price up.
The ONLY actual benefit I see is that its a way for countries like the Ukraine to receive funding; in an unfortunate situation. However, I propose that without Bitcoin, the world would find another way.
Lack of security of my money, high volatility, no oversight, easy manipulation, ideal vehicle for criminal funding... you want THAT for your currency? No way.
It was bizarre to hear Pompliano talk about Bitcoin's "monetary policy". Bitcoin has no bond market, where it's lent at an interest rate, usually with collateral. And it can't in any meaningful way, because loans imply contracts between two parties, and a legal system to enforce those contracts.
"Smart contracts" can do this with some non-tangible goods, but almost all wealth exists in the real world, and courts decide ownership rights of real property, corporate assets, and profits. No government will ever hand over somebody's home to another person because a smart contract says they didn't pay their bitcoin loan.
As someone very deep in the crypto world (as a skeptic), listening to this podcast was infuriating, although Bari did a decent job mediating.
In the first 5 minutes, both debaters concluded that Bitcoin is fundamentally different than the rest of crypto. This is a complete farce. Bitcoin is only different in that it was first and that it is the largest by market cap. There are many BTC clones out there that operate in a similar capacity. I could fork Bitcoin tomorrow and create the same thing.
Bari, I’d recommend bringing an actually technologist to debate next time. The Internet magic Pomp touts is fundamentally a useless snake oil technology. Mike only understands its shortcomings from an economic perspective.
Crypto might be useful in some unique, tumultuous circumstances, such as living in a sanctioned or failed state where the official economy barely functions. (Even in such places, you'd be surprised to see that the cell phone network still works, and cheap Chinese Android phones are a dime a dozen.) But that's not enough to overhaul the whole financial system.
From Bari's questions as moderator, I think she shares my crypto-agnosticism if not outright skepticism.
Much more hype than reality. Plus it's a world destroying disaster for the environment since it wastes so much electricity. And it's extraordinarily volatile. If I wanted to gamble, which I do not, I'd move to to a tacky wasteland like Las Vegas long before I'd invest a penny in bitcoin.
And NFTs are beyond belief, the height of absurdity. The Bored Ape Yacht Club (Bored Ape Yacht Club???) which has lost hundreds of thousands of dollars in the past couple of months proves there's a sucker born every minute.
We live in an insane time where the president of the United States, whom I made the mistake of voting for, thinks that men can be women. And people are afraid to state what was obvious over two years ago, that covid escaped from a sloppy lab in Wuhan. So it's not surprising that the whole world has jumped the shark.
While crypto is ultimately going to be a hollow failure, there is merit in the blockchain technology that enabled it. But even that has issues. I used to think that a non-managed system of financial settlement was an incredibly powerful thing.
But the fact that it relies on ever-increasing electrical usage (via mining) means that it is hard to imagine bitcoin lasting another 10 years let alone 100. Creative concept, but fatally flawed.
Being a cryptoskeptic to being with, after listening to this podcast I'm still with Mike. The questions Bari brought to the table were excellent but with one or two key questions of mine missing.
Pomp said crypto will get rid of the elites. Crypto is like every other new investment vehicle; the slobs (you and me) get in on the ground floor but after some evolution weeds a number out, they become the elites that count on you participating but NOT being successful. So, its nothing new in those regards.
Question 1: What about safety of my savings? If I deposit my meager savings in a bank and it goes under or gets robbed, then I know my government will protect me and my money is not lost. A run on the bank still protects me.
However, with crypto, if it gets stolen, the cryptovault goes bankrupt or out of business, or there is a run on the wallet company, then I lose everything. We can see this happens all the time! Maybe in the future it won't and maybe there will be insurance, but right now, its a wild west out there with NO US Marshalls hunting down bank robbers.. well, successfully. When hostile government backed entities (North Korea's hackers and Russia's Internet Research Agency) are out there to get your money with no recourse, why would I want to risk it?
Question 2: Like any investment vehicle it can be manipulated? What protects us from that? Nothing. The very fact that it exists outside government control or central supervision makes it ripe for evil actors. Let us say there was a farm where everyone can plant, grow, and harvest. Evil Bob decides to wait for you to plant and grow. But, without contributing anything he comes in a day before you plan to harvest with his buddies and their trucks, and they take everything.
Ridiculous? What about the stock manipulation of GameStop? You want that for your currency?
Furthermore, the fact that its not based on a country's debt, performance, monetary policy (etc.) and has NO governance , leaves it completely open to random market forces and the whims of bad actors.
As much as you want to tout the ability for evil governments to be unable to track or control transactions, Pomp completely ignored that this also makes it ripe for evil governments and terrorist organizations to exploit it. One of our biggest IT threats, ransomware, is paid in Bitcoin. I propose that ransomware has become an even bigger threat BECAUSE of Bitcoin.
The final thing I want to add was kudos to Mike's last couple of points. Pomp and other supporters of the crypto world appear to either live in an extreme fantasy world or have ulterior motives for you to get in and try to buy thus driving the price up.
The ONLY actual benefit I see is that its a way for countries like the Ukraine to receive funding; in an unfortunate situation. However, I propose that without Bitcoin, the world would find another way.
Lack of security of my money, high volatility, no oversight, easy manipulation, ideal vehicle for criminal funding... you want THAT for your currency? No way.
It was bizarre to hear Pompliano talk about Bitcoin's "monetary policy". Bitcoin has no bond market, where it's lent at an interest rate, usually with collateral. And it can't in any meaningful way, because loans imply contracts between two parties, and a legal system to enforce those contracts.
"Smart contracts" can do this with some non-tangible goods, but almost all wealth exists in the real world, and courts decide ownership rights of real property, corporate assets, and profits. No government will ever hand over somebody's home to another person because a smart contract says they didn't pay their bitcoin loan.
As someone very deep in the crypto world (as a skeptic), listening to this podcast was infuriating, although Bari did a decent job mediating.
In the first 5 minutes, both debaters concluded that Bitcoin is fundamentally different than the rest of crypto. This is a complete farce. Bitcoin is only different in that it was first and that it is the largest by market cap. There are many BTC clones out there that operate in a similar capacity. I could fork Bitcoin tomorrow and create the same thing.
Bari, I’d recommend bringing an actually technologist to debate next time. The Internet magic Pomp touts is fundamentally a useless snake oil technology. Mike only understands its shortcomings from an economic perspective.
Crypto might be useful in some unique, tumultuous circumstances, such as living in a sanctioned or failed state where the official economy barely functions. (Even in such places, you'd be surprised to see that the cell phone network still works, and cheap Chinese Android phones are a dime a dozen.) But that's not enough to overhaul the whole financial system.
From Bari's questions as moderator, I think she shares my crypto-agnosticism if not outright skepticism.