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A less enthusiastic view on cryptocurrency

LincLinc BardDetroit, MI Icrontian

My views on cryptocurrency, for the first few rounds of news about it, were basically that it was a nerd lottery. It seemed cute at first because it's nerds betting on it with spare income so we can pretend it's our cleverness that's making us money - basically a libertarian wet dream. I watched it distort the graphics card market, watched Bitcoin skyrocket and plummet, and watched reports of insane energy consumption estimates with basically a giant shrug. People are weird, and nerd gambling in very expensive fashion didn't much bother me.

More recently, my views have soured considerably. It'll be less cute in a few more years when someone figures out how to turn it into a big enough financial weapon it hobbles the economy when it implodes, kicking out the legs of folks who never even heard of it. Or when it's consuming so much energy that it becomes an independent driver of climate change (if it hasn't already). Or when money its enabled laundering shows up in the next corruption case. And that doesn't even scratch the surface of the myriad scams happening via ICOs (Initial Coin Offerings) thanks to the hype machine around the sector.

Cryptocurrency is reminiscent of what giant hedgefunds did to the stock market as computers came along: weaponize data & time advantages. Crytocurrency is new enough it hasn't been fully exploited, especially because there are so many variants coming online with their own systems rather than a single market. It's seeing how many levels of meta-gaming you can architect on top of capitalism for personal gain (which goes a lot further down if you think about the existence of crytocurrency as already meta-gaming on top of the existing financial system's meta games). No one thinks they're doing anything wrong by throwing one more scaffold on top of the tower. And when it crashes we all get angry and can't figure out who to blame.

I read an interesting article a while back about how some of the brightest minds of the 80s and 90s eschewed traditional roles in society (doctors, government, lawyers) because they figured out how much money they could make in the newly weaponized stock market. How many folks do you think are using up their lives gaming this market full time now? How many more will it be a few years from now?

So we're gaming & gambling with algorithms, except we have a few inconvenient side effects:

  • We're possibly using as much power as all of Ireland.
  • We're making basic PC components unaffordable.
  • We're participating in and profiting from a scam-ridden, money-laundering industry.
  • We're fueling what seems destined to be the next housing crisis - weaponizing financial instruments we don't understand and have no significant regulation.
  • We're being suckered into this by the lure of leveraging cleverness into personal financial gain.

I dunno where it's all headed for sure, but I'm at the point where I want to say as far away from it as humanly possible. It's incentivizing 100% bad behavior with huge financial stakes, which seems like a libertarian nightmare destined for very bad outcomes.

MiracleManSKwitkoCliff_ForsterMt_GoatMassalinieThraxCBbrightTushonCyrixInstead

Comments

  • Cliff_ForsterCliff_Forster Baltimore, MD Icrontian

    I could not have said it better.

    This has been on my mind. I've actually been too afraid to talk about it in geek circles because if you say crypto isn't a positive disruption you are chastised as a backwards thinker and I just don't think that is the case here. Everything you are saying resonates with my fears.

  • the_technocratthe_technocrat IC-MotY1 Indy Icrontian

    It doesn't solve all of the issues you guys are mentioning, but I agree with a few of them and that's why I like Burst & the 'Proof of Capacity' concept. https://en.wikipedia.org/wiki/Proof-of-space

  • SonorousSonorous F@H Fanatic Virginia Icrontian

    Long live Folding@Home!

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