2y ago

Is Crypto Finally Dead?

Yes, I know that it still exist, and yes, decentralized currency which utilizes distributed, cryptographic validation is not actually a strictly bad idea, but...

Is the speculative investment scam, which crypto substantially represented, finally dead? Can we go back to buying gold bars and Pokemon cards?

I feel like it is, but I'm having a hard time putting my finger on why it lost its sheen. Maybe crypto scammers moved on to selling LLM "prompts?" Maybe the rug just got pulled enough times that everyone lost trust.

65 comments

As an actual currency, it's functionally useless. Even if every retailer on the planet were to accept it, the overhead for making the transaction is just a non-starter
Because of that, it's entirely just funny money. Even further, since it's entirely a virtual asset, if the power goes out, your wallet goes with it
The environmental impacts are horrifying. This fact alone means that it should all be eradicated. Destroying the planet for Internet funny money isn't an acceptable proposition
For a decentralized currency, people sure do love centralizing under large exchanges, and the massive losses, thefts, fraud, etc. have shown that no matter how "decentralized" it's supposed to be, it's still susceptible to the same bullshit as any other currency
Its high profile association with grifters, scammers, malware, and dark web shenanigans has completely soured its image in the public mind
It's entirely a speculative investment scam now. There's no way to decouple it from that.
- I have a few bitcoin that I got when it was new, and I was playing around with it; then I forgot about my coins until it exploded and made it into the public (non-tech) news. I luckily still had my wallet, and I bought a quite expensive watch with Bitcoin when it was near its price peak. The transaction was no more difficult than using Paypal. I could have bought a lot of things; at one point, I could have bought a car with it. There are many vendors who'll accept Bitcoin even today. So, regardless of your other points, saying that it's funny money that you can't buy anything with is simply false. It's worth what people will pay for it, just like the American dollar, or gold, or the artificially inflated price of blood diamonds.
  I don't think promoting falsehoods helps any argument. If that one is obviously wrong, what about your other points? Lots of people want cryptocurrency to fail. Lots of people want to maintain the hegemony of the US dollar. Some people even have valid criticisms of proof-of-work cryptocurrencies, and the giant farming installations. It's certainly something to discuss, as long as it's kept to facts.
  
  The issue with retail is how long it takes for a bitcoin transaction to be confirmed. The overhead simply isn't feasible. A vendor isn't going to sit around an wait an hour for confirmation that payment has been received. A private seller might not care. But a company that processes millions of transactions per day isn't going to deal with that. It has nothing to do with the belief in it and its worth.
  And yes, let me be perfectly clear: I absolutely do want cryptocurrency to fail. That's not about being a shill for government hegemony. It's about there being literally no inherent good in it, either in principle or in practice. From the fact that it consumes more energy than entire countries and pumps more CO2 into the atmosphere than entire major industries, to the environmental impact of increased mining for rare earths, increased manufacturing strain, and supply chain disruption due to the demand for the chips to drive the miners.
  Also I really don't appreciate your passive aggressive way of calling me a liar
- Correct me if I'm wrong, but since ETH moved to a proof of stake model rather than proof of work (i.e. "mining"), isn't its environmental footprint now a fraction of the wasteful behemoth it was previously?
  (Though I 100% agree given the 'gas fees' (transaction costs), it's still absolutely useless as an actual currency.)
  
  You're right about the environmental footprint - proof of stake dropped the energy consumption by 99.95%
  Ether (ETH) was never intended to serve as a digital currency. it was only meant to be the fuel or incentive for computational tasks on the Ethereum network. An L2 like Optimism or Arbitrum runs on top of Ethereum and facilitates transactions that are significantly faster (tens of thousands of transactions per second), for a fraction of the cost (pennies or fractions of pennies)
- As an actual currency, it's functionally useless. Even if every retailer on the planet were to accept it, the overhead for making the transaction is just a non-starter
  New technologies such as the lightning network will fix this.
  Because of that, it's entirely just funny money. Even further, since it's entirely a virtual asset, if the power goes out, your wallet goes with it
  If the power goes out, your local ATMs and card readers will stop working as well. It'd have to take a global power outage to bring a crypto network down, and at that point we probably have more important issues to deal with.
  The environmental impacts are horrifying. This fact alone means that it should all be eradicated. Destroying the planet for Internet funny money isn't an acceptable proposition
  This is fixed by proof-of-stake.
  For a decentralized currency, people sure do love centralizing under large exchanges, and the massive losses, thefts, fraud, etc. have shown that no matter how "decentralized" it's supposed to be, it's still susceptible to the same bullshit as any other currency
  True, but it's a personal choice. You don't have to have to store them centralized if you don't want to. The same cannot be said about traditional currencies, as it's not feasable to have stacks of cash lying around.
  Its high profile association with grifters, scammers, malware, and dark web shenanigans has completely soured its image in the public mind
  Also true, but that has nothing to do with the actual currencies. The public image will improve once people learns how it works.
  It's entirely a speculative investment scam now. There's no way to decouple it from that.
  Maturity will make it decouple from that.
- Some of these points are not inherent properties of cryptos, like the environmental impact and the transaction overhead.

Bitcoin's in the low $29kus region lately (up from $26kus), so it looks like it's going to keep going. Also, big real money investors are now pretty long on cryptocurrency, so there is a vested interest in keeping it around.
Plus, you know, folks buying stuff on the black and grey markets with it. Wish I didn't have to mention drugs, but it's the easiest way to keep getting insulin for folks these days in addition to the usual recreational compounds.

it should be

Nope. I use it on a weekly basis to pay for stuff on the internet. It's got its uses and the concept is sound. What you're talking about is the hype train that happens ever so often.
- I'm glad to see that paying for things is still an option. What I really hope for is that the future of crypto is all payments and the investors fuck off
- What do you use crypto to pay for on the internet every week?
  
  Wouldn't you like to know, fedboi.
  
  Servers, VPN, domain names and recurring donations. Mostly donations every week. Servers and VPN on a monthly basis.

A lot of controversial comments. Here are some of my observations:
Not a single mention of decentralised finance/DeFi in the comments, which is a game-changer.
A lot of outdated information or misunderstanding of recent developments in the industry
A large focus on scams and crypto bros, who are the loudest but definitely not the majority
- DeFi
  All governments and API server owners have shown that this is a wish and not reality.
  
  DeFi has added some real value for both project creators and users, not just for myself. I'm not talking about the 'money making, profit driven' side of value either, but utility, capital efficiency, flexibility, new financial primitives as well.
  All sorts of crazy innovation that you shouldn't just hand-wave away as a scam or redundant.
- Good points for sure.
  You mentioned recent developments, what Loopring is doing with Layer 2/3 technology has been game changing within the ethereum space. GameStop’s NFT marketplace, especially the games shines because of it.
  Semi-related, this post reminds me of a recent F1 story I came across on squabbles, where they are using w3 improve their ticketing systems to combat certain things that currently cause issues like scalping while also providing a medium for tailored ticket and fan experiences. It has actually been a long time coming, I found this article from ‘21 How Non-Fungible Tokens Are Coming To F1 which goes more in-depth with what their vision is and what they believe they can achieve.
  I wouldn’t be surprised if these kinds of applications pop up in other sports down the road if it does well for F1.
  Given all the negative press in addition to the unfortunate support from GOP fascists, from the outside looking in it must seem like it’s 90% delusional morons being taken advantage of by 10% scammer assholes.
  There are delusional morons and scammer assholes, but it’s a loud minority and does not define the technology and the assoc industry.
  
  I tried to like Loopring, but their L2s were hardcoded circuits rather than zkEVM which the Polygon and Matterlabs team (and Starkware to a lesser extent) are pushing ahead with this year. Allowing the community of third party developers to contribute value (sound familiar Reddit?) is going to make the whole L2 space to gangbusters.
  As it stands now you can't do much with Loopring except what the first party devs have built, which is basically a standard excahnge.

Weak hands got shaken out, and the economy is teetering on recession. When inflation stops and interest rates fall, and quantitative easing starts back up it's gonna come roaring back. The SEC and CFTC aren't trying to kill crypto, they are just trying to decide who's jurisdiction it falls under. The crypto industry will benefit from regulation, it will get safer, and you'll feel like an idiot for asking this question instead of buying while it's cheap. Hit me up in 2025!
- I am not sure if you are actually drinking the Kool-Aid or if this is some top tier shit posting. If it's the latter, kudos to you!
  
  I find it odd people who want their social media decentralised but are disgusted when money is decentralised.

Ah yes. Another entry to the list: https://99bitcoins.com/bitcoin-obituaries/

Hopefully. The only thing it was ever useful for was buying illegal drugs via Silk Road.

It is humming along nicely for those that use it. There could be another speculative pump filled with scams, that would be no surprise.

not really. the stupid stuff, like nfts, are dying, but the rest is still the same.

Nah. This happens every few years, has been since 2014. Buy a GPU before they rise up and use all of our electricity again. An new SBF will crash it sometime.

Too many scams. Too many ads advertising companies who ended up being scams as well. The pivot to NFTs was short-lived (because they were scams). The high-profile exchanges (FTX et al) going belly up, and the their founders in jail.

It will never die. I believe it will wax and wane over the years. Being incredibly anonymous and deregulated means it will always be a great place for the evil doers to manipulate the market and make money off of it. Because of that there will always be some people using it.
I think one of the biggest failings of cryptocurrency in general is that people view it as a replacement for cash or debit cards when in reality with how slow and expensive the transactions are it is more of a replacement for clearing houses. When you get money sent to your bank you can use it right away because the bank trusts you and provides that service but the money isn't truly there yet. You may have heard the phrase of "the check cleared" or something similar. It takes a long time for those processes to complete and crypto is faster than it.

Maybe people understood, that instead of freedom as advertised, crypto brings out even more oppressive forms of capitalism.

you can’t get a real discussion of crypto here because downvotes are impossible and the simps are legion

Bitcoin is still around 30k a pop, so I wouldn't say it's dead yet. But I foresee a big crash in the months or years to come: the hype has passed, and the real uses of crypto are very few. It's also not a good investment since the expected returns are 0. Once people finally realize that, I see the price falling to 1k or even less.
- You know that this was being said multiple times in the last 10 years?
- expected returns are 0
  That's the same thing with gold though. There are other reasons to invest in something than just returns. Some folks want something to maintain its value. Bitcoin being deflationary is supposed to be a good hedge against inflation. (But it's far to volatile to really serve that purpose in my opinion.)
  
  Well, gold has the added benefit that it has served this purpose for thousands of years.
  Would you really count on an extremely complex electronic currency requiring a distributed array of machines to get you through a major crisis?

In the majority of people's eyes crypto is seen as a scam and something to avoid. The only thing crypto ever did for me was make things I actually care about more expensive.
I think it would take a lot to recover from the bad reputation it has gotten.
- It was kinda shocking how negative public sentiment is. I am deep in crypto world so I am used to much more positive feedback on the stuff I am working on, because I guess I mostly hang out with crypto people
  
  That sentiment was earned over time. The original reception of crypto wasn't bad, and large companies like Valve/Steam would accept bitcoin for a little while. All of that went away as bitcoin turned from a potential "digital money" to "just another pyramid scheme". Drying up the GPU market and making PC gaming unformidable didn't help.

I know one crypto bro IRL. He acknowledges that it's all just a pyramid scheme, but he enjoys it because it's like gambling but with more strategy involved I guess.
- Would you also consider GameStop’s NFT marketplace for games part of a pyramid scheme?
  Or maybe what F1 is doing to evolve how they handling ticketing? Here’s a recent follow up on F1’s NFT ideas I came across recently.
  It’s… just not all a pyramid scheme. To say it’s all a pyramid scheme is missing the forest for the trees. It’s n o t
- Gambling except the expected value is higher than 0

No. Bitcoin is the future of money. It really is the best form of money humanity has invented so far. People just need to stop trading shit coins.
- Yeah man, keep huffing that copium.
  Bitcoin has no long term plan for actually securing its chain. The fees don't add up to enough and the throughout is abysmal. Lightning is centralised and was disrupted because of chain congestion due to Ordinals.
  Keep dreaming!
- Bitcoin (as it uses proof of work) is incapable of handling all transaction of the world without creating insane amounts of wasted energy.
  Updating the ledger (actually writing down transactions) is only a fraction of the total computing resources it consumes. Most of it is just spent doing random hashes over and over again (the proof of work part). This is computing power that does not actually do any of the money related tasks, it's just there to keep the ledger trusted.
  This is an awesome idea in theory, but completely unscalable in reality.
  Other Blockchain technologies like proof of stake don't have this issue of energy waste, but they have other hurdles.
  But Bitcoin as it is implemented now can never be the money of the future in my opinion.
  
  Trust is one of the most fundamental parts of any monetary system, so brute forcing hashes in this case is directly related to it.
  Bitcoin can easily serve the world on 100 Mac Minis. Probably even fewer. The fact that currently people beat themselves into burning ridiculous amounts of electricity to run Bitcoin nodes is a function of the profitability of doing that. If that profitability decreases, so will the electricity burned. If I remember correctly, the protocol is designed to reduce that reward over time and unless the dollar value of Bitcoin dramatically increases, the energy waste should decrease long term.
  A secondary point on energy consumption is how that of Bitcoin compares to the traditional financial transaction systems. I don't have the numbers at the moment but last time I checked it wasn't pretty for the latter.
  With all that said, if PoS is proven to be as robust as PoW, it would probably be adopted by systems currently on PoW, like Bitcoin.
- No fucking way haha, imagine having to hang out at the grocery store for an hour waiting for your payment to clear
- Do you use Bitcoin in real life?
  
  Do you use any gold in real life to pay for stuff?

In the US each time crypto is traded it needs to be reported.
I got free crypto from Coinbase. Then sent it to a wallet, then sold it. So each transaction needed to be reported. It’s too troublesome to be worth it.
Also, if I buy crypto, they have a week hold before I can move it. My idea was to buy crypto in country A and sell it in country B to quickly transfer money between the two countries I live in. Also it would help me beat the bank fees.
But the 7 day hold kinda defeats the purpose of quickly transferring money.
- Just download your transaction CSVs from Coinbase and throw them into a Git repo.

65 comments