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comment by mike
mike  ·  2512 days ago  ·  link  ·    ·  parent  ·  post: Musings on Cryptocurrency - an invitation to ruminate

I'm talking about regular mom and pop folk. They don't "get" bitcoin - they're not looking to shelter earnings.

And yeah cryptokitties are ridiculous, but I find it to be an encouraging development anyways. It's hard to explain to folks the value of ethereum, but when we get a wave of dapps rolling in, this year I hope, ether is going to be hot. Kitties is the first strike. And while I think kitties are a joke, when I showed them to my gf and my son, my gf said right away "We should buy some! These could be really valuable!" And my 17 year old immediately began downloading metamask so he could start the buying process. Luckily hehas no ether, but I did think about putting him in charge of kittie breeding 'cause he lives in this world of online gaming and is damn good at this kind of thing.





kleinbl00  ·  2512 days ago  ·  link  ·  

    It's hard to explain to folks the value of ethereum

It's not, though. It's just that nobody does.

The value of Ethereum is that it's the native currency for a globally-distributed financial machine that can do most of the automated transactions and interactions of the Internet without any central control or chokepoints. Ethereum is what makes a global information framework run, and it takes Ethereum to make that framework run fairly. If you say that Ethereum allows for an Internet that everyone can interact with, transact with or profit from without interference simply by having a connection, you've got it. That's it. Right there.

But nobody bothers to explain it that way. Nobody wants to explain why the hell the root word is "cryptography." Nobody wants to use the word "distributed." Instead they go "look - a fake cat is worth a hundred thousand dollars, therefore buy ether." At least Beanie Babies were soft.

Yeah, mom'n'pop folk (or more accurately, their driving-for-Uber children) don't "get" bitcoin because nobody has bothered with the fundamentals since before it was $100. This is why every traditional investment manager under the sun barks "Tulip crisis!" in a Pavlovian fashion whenever you say "crypto" or "bitcoin."

I read a great quote from Eric Schmidt this morning:

    The Internet is the first thing that humanity has built that humanity doesn't understand, the largest experiment in anarchy that we have ever had.

People think they understand the Internet. My beef is they have no interest in understanding crypto, but they're all eager to buy some.

mike  ·  2511 days ago  ·  link  ·  

Thanks, that's a good short description. I'd like to find a list of concrete examples of why ether will be so important. Do you know of such a list? I'll keep poking around and post a link if I find one.

kleinbl00  ·  2511 days ago  ·  link  ·  

All roads lead to veen

There are a number of nerdy pages listing "use cases" and the like but there's a lot of blind men & elephants. Fundamentally, if it can be done on the internet, with a bank, or involving programming (or all three)it can be done on Ethereum instead of on the internet, with a bank or with programming which means the sky's the limit.

Examples I've used include AirBnB - the EVM knows the MAC address of your phone and my smart lock so when you walk up my driveway it escrows $500 and withdraws $100 from your wallet and unlocks my door, then it releases that $500 when I verify you didn't trash my house. You can use transit - My MAC pops up on the network at Union Station and because I've got a contract with LA Metro the turnstile opens. Then when it shows up at Hollywood & Highland it deducts $1.75.

I find it's easier to come up with examples on the fly than point at something mythical on the horizon. It makes things far more relatable.

mike  ·  2511 days ago  ·  link  ·  

Fantastic. Thanks again! veen I never saw your article - really really nice.

veen  ·  2511 days ago  ·  link  ·  

Thanks! That said, some of my roads lead back to kleinbl00, so it's not like I'm the lone visionary over here.

OftenBen  ·  2512 days ago  ·  link  ·  

    My beef is they have no interest in understanding crypto,

I don't think they have any interest in understanding fiat or general finance either.

If we went and polled 100 Americans and asked them what the Federal Reserve was, what sort of answers do you think we would get back?

kleinbl00  ·  2512 days ago  ·  link  ·  

You're not wrong, but "money" is an easy concept to wrap your head around from a utilitarian standpoint: "It's a marker I can exchange with people because the government says so." Equities are equally so: "my ownership of this stock means I own a fraction of that company." Try that with Bitcoin:

"it's a marker I can exchange with people because there's a vast consensus network that keeps track minute-by-minute who has how much for everyone in the world via unbreakable codes."

That's the stumbling point for cryptocurrency in general. You need to be comfortable with the concept above before you can consider the vagaries of one coin over another. And then of course you look like a damn fool because the fundamental value of these coins depends on their adoption and utility and nearly all of it is locked up in exchanges like some damn non-dividend-paying stock.

78 days ago, I pointed out that the market cap of all cryptocurrencies was a mere $174b.

We're at $816b right now. We're up like 5x in 11 weeks. That represents real, physical money pouring into crypto, pushing it up to shouting distance from Apple's market cap.

If Apple didn't exist yesterday, but did exist today, it would take a lot more than three months for Apple to be worth $900b. So whether or not people understand equities, they have a latent familiarity with their behavior that tempers their enthusiasm.

The crypto market does not provide latent familiarity but a whole bunch of people don't care.

OftenBen  ·  2511 days ago  ·  link  ·  

Dude I just don't know what else to say.

When I write communications for release to the general public I have to put each and every word through a vocabulary checker that limits me to 6th grade level words. Except that's insulting to 6th graders because they are more likely to understand vaguely how blockchains work than the average adult.

You can't make people care about financial theory. You can't make people care about cryptographic theory and hash rates and the marginal utility of one blockchain over another.

There is a techno-literate elite in this world who invents things. There is a sub-class of paritally literate techpriests and engineseers who keep it running. Then there is everyone else who shits themselves in terror if you ask them to open the back of their phone and put in an SD card so that they have enough space to download Candy Crush Saga Legends: Triple Fire Emoji Plus for the fifth time.

I don't have a solution in mind that is workable. I don't think anyone else does either.

None of the badfeels associated with the most recent crypto-bubble have anything to do with the tech. It's entirely related to how people relate to and interact with the technology. At some point we are going to have to, as a species, come up with a way to train children to be tech-literate and tech-responsible and even then there are gonna be obstacles and harm. Cars are safer than ever and tens of thousands of people still die because they don't use their seatbelts or somebody drives drunk.

I guarantee the dirt-squatting quarter-ape who invented fire burned themselves, and likely the early-adopters of that era did the same.

The challenge for me at this stage of the game is how to relate to the tech-illiterate in a non-shitty way. The instinct is to just feel smugly superior that I have a vague notion of how computers work but I want to try and think that we are capable of something more nuanced and productive than a modern caste system.

kleinbl00  ·  2511 days ago  ·  link  ·  

Your communications aren't intended for self-assured speculators that wish to make money by out-thinking the crowd. You're right - you can't make people think about financial theory. I'm not saying everybody needs to eat their vegetables. I'm arguing that a horrifying fraction of those in the crypto space are perfectly okay with their ignorance, and that ignorance leads to distortions.

I can point to the reasons valuations are high in the stock market. Institutions have targets to meet and with no good options, they have to make it work with the bad. But crypto is pure speculation done on exchanges with no regulation or guarantee so that's all elective greed.

I know how badly you want to gutterball this discussion into one or the other of your threadbare, time-worn "all humans are bad" tracks but it's simply not the case.

OftenBen  ·  2511 days ago  ·  link  ·  

    I know how badly you want to gutterball this discussion into one or the other of your threadbare, time-worn "all humans are bad" tracks

Trying to do the opposite actually.

What is the way forward? How do you keep greedy dummies out of crypto until it's more useful? Is keeping greedy dummies out of crypto a good thing in and of itself? Or does this just end with a lot of greedy dummies getting burned?

goobster  ·  2511 days ago  ·  link  ·  

This whole conversation reminds me of when AOL provided a link to the World Wide Web for their subscribers.

It was the first time that "browsers" - aka, people who browse, but do not produce content themselves - were allowed onto the web in large numbers. It instantly flipped the entire web from a place where creative people built shit and shared it with each other, to an enormous horde of people consuming/copying/commenting on your stuff.

Which was useless. These people were using the Web like TV, rather than the hot rod auto shop that it was. What the fuck do I care what some non-creator from Poughkeepsie thinks of my work? What have THEY done?

Bitcoin, et al, seem to be in a similar place: A great tech idea was just about to hit its stride and become something much bigger and more powerful... and then the looky-lous came in, and have artificially skewed the idea/product/technology.

From someone who has lived through this change four times: It ain't coming back. It is now the property of the speculators. They are there, they are in, and you cannot eject them. They are now a fact of the market, and just need to be endured and understood.

(Incidentally, this is why I don't play PubG, a game I know I would love. It is over-populated with people who are REALLY GOOD, and snipe any newcomers constantly, until it is no fun. This creates an isolated cadre of the "elite" who play it until the company can no longer sustain the server costs, and goes out of business or sells off to someone else, because they can't get new users to play.)

kleinbl00  ·  2511 days ago  ·  link  ·  

No, not like that. The discussion is not "you guys are polluting my internetz with your triviality" it's "Just because you can buy a GSXR does not mean you should see how fast you can take the Angeles Crest." Or worse, "just because you can walk through a dark alley with fistfuls of cash doesn't mean you should."

OftenBen's argument is "people are stupid, let them eat shit." My argument is that "protections exist for stupid people and a lot of them are going to get hurt." It's not far from this:

Really, though, that's a subsection of a larger discussion about where the "top" would be, if we could try and figure out the top. I don't think we can. In the meantime though there's now real money piling in which increases the target richness in the ecosystem. The statement that sent OB down the hate spiral:

    People think they understand the Internet. My beef is they have no interest in understanding crypto, but they're all eager to buy some.

They don't understand the Internet either. You know that, I know that, we all know that. But "the Internet" has a lot more protections and familiarity than cryptocurrency does.

I transferred 50 ETH yesterday. That used to be cute. That used to be, like, $35. You copy-paste a number like

0xC2D7CF95645D33006175B78989035C7c9061d3F9

And you copy paste a number like

3a1076bf45ab87712ad64ccb3b10217737f7faacbf2872e88fdd9a537d8fe266

And you hit go

And you hope to shit it's right

And in 30 seconds or so the money goes from one place to another. $35! Super-awesome! 30 seconds! Future of the Internet!

Except it's not $35, it's a goddamn Mercedes E-class that you could lose because of a typo and you can cry to whoever you want, the blockchain don't care.

And right now we're all fuckin' around trading in exchanges and maybe that's the future but the kind of naked risk you're exposed to with this shit is something we haven't seen since we chased the brigands off the turnpike.

goobster  ·  2510 days ago  ·  link  ·  

Man, my one comment I have ever made - or will ever make - on any crypto currency, and I got it wrong. Sheesh.

kleinbl00  ·  2511 days ago  ·  link  ·  
b_b  ·  2510 days ago  ·  link  ·  

One wonders if beanie babies happened today if we'd see daily Direxion 3X jerry garcia bull ETF shares. And if Wall Street would think that was a good idea. And if the internet would be full of smug beanie baby "investors" who think that they're the only ones who really understand how cute the babies are and everyone else is a moron who doesn't even know how thread is spun so why are you even investing leave the investing to those of us who really appreciate fine polyester.

OftenBen  ·  2511 days ago  ·  link  ·  

To phrase my initial curiosity more directly:

Why do you have beef with people who don't have the capacity to understand what your beef is about?

I can ask myself a similar question about unrelated topics; religion being the one most present in my mind at the time.