7mo ago

Linux Inventor Says He Doesn’t Believe in Crypto

u.today Linux Inventor Says He Doesn’t Believe in Crypto

Linus Torvalds has said that cryptocurrencies are simply "a great vehicle for scams"

Linus Torvalds, creator of Linux, does not believe in cryptocurrencies, calling them a vehicle for scams and a Ponzi scheme.
Torvalds was once rumored to be Bitcoin creator Satoshi Nakamoto, but he clarified it was a joke and denied owning a Bitcoin fortune.
Torvalds also dismissed the idea of technological singularity as a bedtime story for children, saying continuous exponential growth does not make sense.

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The vast majority of the crypto world failed to understand one key concept, money is not the value for which goods/services are exchanged, it is the value by which they are exchanged. People do not have a use or value for money beyond what it can be exchanged for, if no one is willing to exchange for it, it has no value.
Crypto only had value as a currency if people would accept it for goods or services, and the only thing people ever accepted it as payment for, in any meaningful capacity, were illegal goods and services. The value beyond that was purely based on a speculative ideological assumption that people would abandon the traditional banking system for a new system that they couldn’t buy anything with.
- the only thing people ever accepted it as payment for, in any meaningful capacity, were illegal goods and services
  That used to be true. Hardly any BTC is being spent on drugs nowadays. It's not anonymous enough. However, people are buying high value items like real estate and luxury goods with BTC.
  Bitcoin is mostly being spent on electricity and new hardware.
  
  Bitcoin is mostly being spent on ~~electricity and new hardware~~ more Bitcoin.
  Ftfy
  
  most of the bitcoin being spent on electricity and hardware gets exchanged for actual currency before it is spent. And most of the luxury goods sales are gimmicks and limited time.
  And there is a huge amount of criminal activity with bitcoin still, they just mainly use it to launder money now as the transactions are impractically slow and costly for anything but particularly large trades.
  
  "The multi-chain era has had a sweeping impact on the distribution of illicit crypto volume as a whole, where Bitcoin’s share plummeted from 97% in 2016 to 19% in 2022. In 2016, two thirds of crypto hack volume was on Bitcoin; in 2022, it accounted for just under 3%, with Ethereum (68%) and Binance Smart Chain (19%) dominating the field. And while Bitcoin was the exclusive currency for terrorist financing in 2016, by 2022 it was all but replaced by assets on the TRON blockchain, with 92%."
  TRM illicit crypto ecosystem report 2023
- I don't know much about crypto but this doesn't seem right?
  Didnt it hit an all time high recently? All while no one is using it to buy anything anymore?
  A coin is worth what someone will pay for it, and people are paying lots because they think it will be worth more later.
  It has no inherent value or utility.
  
  Not sure if has hit all time high, but I doubt it. But even if it did, the reason why it did is pretty simple. It's unregulated and a scam. So, get a bunch of sociopaths and let them target people, get them to invest in crypto and then they will be able to sell their own imaginary money to these people for real money. This is how it works in its most raw form. Someone invents monopoly money, convinces someone gullible that it's the future and sells the people the monopoly money for real cash.
  Of course there's a whole bunch of obuscation and hype talk to hide what's really happening, so it's not immediately obvious to those people.
  Muddying the waters is also the small group of true believers who really think that it's only matter of time when the monopoly money is going to take over and via the power of magical thinking completely fix capitalism and the rich bastards who have money instead of them.
  So the signal to noise ratio is pretty bad for really seeing what is actually going on.
  
  Which is EXACTLY the same as all other fiscal vehicles. Except in the case of USD, the group of sociopaths you describe are the elected representatives of USGOV. What defines money as real, Vs not real? The fact that it's backed by the central bank? Is that actually a good thing and positive for anyone? Decentralised finance as a concept is a good thing. Sometimes it takes a little froth for something to take hold. I'll bet there were a bunch of people who said similar things about trading shares and futures trading. You can argue that both of those things are ultimately scams. They are legitimised only due to the fact they make capital. Crypto makes capital. And it's now easy to swap between fiat and crypto.
  I LOL at OSS people who say that a government backed crypto currency is a good thing. Explain how monolithic control of finance is good for everyone. Please
  
  Ok, no, Crypto in any form is bad. But unregulated is not an improvement.
  Also, money has always since the very beginning been monolithic control finance, the first money were printed by kings. There just were a lot instability with the coins.
  The other options are not to have capitalism at all, go back to bartering, or reach the hallowed myth of post-scarcity.
  
  You are ignoring the huge number of crypto, or to be more specific, Blockchain projects that have inherent utility. There are many, and few will survive but some assuredly will. I do believe in DePIN as a concept, and I think it's likely the immediate future. And it's not the only buzzword that does actually have potential. Quantum computing seems like Fusion to me. Always a mere decade away, with only a few insurmountable problems to solve.
  Decentralised does not mean without governance. Many of the newer lesser known tokens are governed by the projects they are used for. This, I believe, is a good thing, Each project returns us closer to a world where currency is linked to tangibles. And the control remains with the communities that built them.
  Imagine being a business that trades with other nations, and the collapse of the government in the country you operate in results in a once profitable business losing 100x the value of the product over night.
  It's harder for that to happen with tokens linked to the businesses that offer a good or service.
  How are we now linking crypto to anti capitalism? It's quite the opposite and it's nothing to do with a post scarcity world ideal. I do believe that crypto currency will return finance to something that is closer to the people that use them, and provide a means to involve people more widely, give them a stake, if you will, in the policy surrounding them.
  Any centralised regulations need to focus on preventing fraudulent systems. And they are innumerable, which is how we end up with statements like Linuses. I suspect you'll find this comment ages like Bill Gates and his infamous statement about networking.
  
  It got the initial true push as an anti capitalist reaction, well if we ignore the scammers and gamblers. But more in the sense that "hey you got money but I don't have any so imma make my own and be just like you".
  Also when did I ever link it to post scarcity? I said, the only "solution" to monolithic money is either bartering or post scarcity, or abandoning capitalism in some fashion.
  Crypto is just another immutable database, except shared. It's not a silver bullet or solution for... anything really. The validation methods are cute or terribly resource intensive and they add no real value, aside from consolidating power within the network.
- That is not true, for the vast majority of the history of money it was based on a commodity that was valuable in its own sense. It is only in the last century that we have begun experimenting with currencies that are not pegged to the value of a commodity.
  Cryptocurrencies derived their value from being a network of users (metcalfe's law) so they are more like a commodity money. Thing about something like Meta, which has a valuation in the trillions despite its physical assets not be worth nearly that and its functionality as a website being easily replicated on an alternative platform. The users are what is valuable.
  
  for the vast majority of the history of money it was based on a commodity that was valuable in its own sense.
  True, but using grain or tools as a currency would make the modern financial system pretty much impossible. Even for simple banking, you need something small and light like gold or currency notes.
  
  What if it was so small and light it was only electrons? And what if it accrues its value from the energy expended to create it? Maybe using some sort of cypher to ensure anyone could verify it? Idk maybe we're onto something..
  then again it still syphons value to the top so maybe not...
  
  What if it was so small and light it was only electrons?
  You mean, like how it is now?
  And what if it accrues its value from the energy expended to create it?
  You want more climate change? Also, value comes only from what someone else is willing to exchange for it.
  Maybe using some sort of cypher to ensure anyone could verify it?
  Why should anyone else be able to know anything about a transaction between A and B?
  
  Gold is a commodity and you can create a currency that is backed by a commodity so you aren't actually trading the commodity itself.
  
  Yes, gold is a commodity, but when used as currency it is acting as a medium of exchange and not as a commodity. Same with pieces of paper with the sign of the reserve bank governor, or data on a computer's memory. The gold, paper and hard disc all have intrinsic value, but when used as currency they are assigned an arbitrarily higher face value.
  
  When you have commodity money, the value of the money is derived from the value of the commodity. You don't get to assign arbitrarily higher values to the money because the market determines the value. But yes, all speculative assets typically have a higher extrinsic value compared with their intrinsic value but I don't believe that has anything to do with it being a medium of exchange or not. That is just supply and demand.
  
  When you have commodity money, the value of the money is derived from the value of the commodity.
  The value of the commodity acts as a floor, but the face value is dictated by supply and demand, and demand usually exceeds supply, driving it significantly above the floor. Take gold, for example. Gold's intrinsic values are (1) it's pretty and can be used to make decorative items, and (2) it has some applications in electronics. It can't be eaten, can't be worn, and it's too soft even to make tools out of it. Yet, its extrinsic value is huge, because it is publically seen as a good medium of exchange and so a lot of people want it.

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