No, currencies target low positive rates of inflation specifically to discourage their being viewed as assets.
The point of a currency is to serve as a medium of exchange, not as an asset to be held. That's why accounts where people are encouraged to "hold" currency actually exchange the currency for liquid assets like stock, money market fund shares, or an insured interest in a bank's general loan pool.
There are some fundamental misconceptions still, but it's a great post.
First, crypto currencies networks are not attempting to rely on no intermediaries, but rather removing the need for trusted intermediaries. Yes there are challenges and constraints to this, but the successful operation of the Bitcoin network without a single trusted intermediary (and surviving several large physical shifts and attacks from the mining community) is a testament to its success. Prior to Bitcoin, there wasn't a single non-bank digital currency system that succeeded precisely because of the trust issues. Bitcoins success in that regard is not mentioned once.
Second, the current cost of token ownership is not always the representative cost of entry for users. Where the network requires high fees, this may be true, but there are low fee networks with varying degrees of decentralization (Stellar, Hadera, Avalanche, Solana to name a few) that get no mention here. And no, because they are less decentralized that doesn't make the point moot. It's a spectrum, and ultimately many infrastructure services do try to achieve some form of decentralization in even more traditional contexts, so to throw out the low cost fee networks makes no sense. For things like Ethereum and Bitcoin, the fees are akin for users having access or using underlying settlement and base infrastructure systems (like mainline Telcom cables, the water main, or the high value payment system of a country). These systems are all expensive. The fact that they are expensive is indicative of demand at best and a limitation of performance given security constraints at worst.
Third, the alleged illicit use of cryptocurrencies continues to be incorrect. The early years of the ransomware wave didn't even take place on Bitcoin although they both existed simultaneously, to prove that ransomware did grow on its own accord just fine. And today the vast majority of criminal activity occurs through traditional payment rails. Many studies have shown Bitcoin network criminal activity to be incredibly small (in the range of one percent). Bitcoin cannot simultaneously be an incredibly useless, overly expensive, non-currency like system but also be purposely built for criminal payments when those criminals have the exact same requirements with traditional payment systems. Of the 4B hack made almost 6 years ago, not even a billion dollars was successfully laundered. That's appalling by criminal standards in which multi trillions of dollars are laundered every year.
Fourth, feeding off my last point, KYC/AML should never be the shining bastion of success to stand behind. Simply look at the reported success numbers, read the 2011 UN report, or listen to the markets estimated billions in wasted cost. It's empirically a failure of the modern financial system more than a success.
Finally, the presence of tokens in a network more than anything represents the monetization of that networks underlying value. How this is not applauded and encouraged blows my mind in the current age we live in. Digital networks in their modern form have been the source of incredible monopolies, abuse, and systemically destabilizing elements within society for two decades now. That we should not wish to see their fundamental arrangements challenged baffles me. The usage of a token to facilitate network activity, direct user ownership, and provide a scarcity element in an otherwise infinitely reproducible domain is necessary work. I would support this innovation to be done within the confines of our traditional financial system had the current banking system not proven itself to be ossified and unusably gridlocked in innovation. Just look at the rise of fintech, the growth of nonbank finance, and the continued failure of developing market funding (not just developing economies, but the actual lower end segments of our individual markets characterized by small businesses) as proof.
And I agree with parts of his presentation. Cryptocurrencies are currently incredibly divisive, unreliable, risky, and a few have incredibly poor environmental outcomes. But there is incredibly necessary innovation that is occurring at the core of the market. The existing high wealth inequality, cyber risks, overconcentration, and stagnation of our broader more traditional markets is proof that there are raw opportunities that need to be solved.
In the end, I am saddened to see the state of our world. I see the initiation of this work from a small group of anarchists and libertarians as both a failure of our system and as the only probably place it could have come from.
The existing system has failed, I am shocked at anyone who can refute that claim after the insane levels of market corruption and speculation that characterized the 90s, the financial crisis of 2008, and the absolute global stagnation of production following that has then led to the progressively high levels of public and private indebtedness since. To act as if Bitcoin, once characterized as the "evil spawn of the crisis", wasn't exactly what our society deserved is IGNORANT and ARROGANT.
> unless Mastodon or something else is planning to persuade the masses to not make money on the metaverse and stay on the fediverse.
Exactly this. Mastodon on its own is clearly not enough. And cryptoeconomic systems still have to navigate financial regulations successfully before they ever become legitimate contenders.
Not sure I see another macrotrend out there to help counter this. Except crypto. And despite all my faith, I remain skeptical.
Interesting question, but doesn't a "metaverse" require interoperable applications to some extent?
I think the Zuck use case was buying a t-shirt for a virtual avatar and I want to use that t-shirt in other applications. There is a matter of interoperability required at the level of the data that sits behind both applications as it pertains to the user that sits on the other side of those applications. (meaning just sharing data isn't enough, there is user level context as well).
And if you reduce interoperability to a single entity owned platform (like Steam), well other platforms will exist and the interoperability problem will be recreated.
I don’t think it’s axiomatic that the metaverse needs interoperability of t-shirts. What I’m asking for is arguments for why that is the case and given that the current Internet is basically a metaverse sans interoperability why we haven’t seen it done yet. It’s not really a technical hurdle IMO.
It's not an entirely technical hurdle, but eventually you run into repeated issues when trying to recreate application context across different applications. That means to do so at scale can be solved by a technology solution.
To me the issues that require addressing are things like standardization, general uniqueness proofs, Cross-app total order broadcast, identity and service discovery, to just name a few.
My feeling is that the internet does not solve these problems, especially at the application layer, and therefore interoperability is a technical solution that is required for a metaverse like vision.
If that t-shirt isn't created procedurally, then any interoperability between differently themed worlds will just make everything look like 2nd Life, since an artist would have to create another, similar shirt in a style that fits.
Today Facebook steals your time by locking your attention to their web page or mobile app. Tomorrow they do it by locking your attention to their VR headset or AR glasses.
And each time, the whole Facebook ecosystem comes with you.
This is exactly what they do and Meta is a natural extension that is betting in a cultural change as much as it is a continuation of everything Facebook is.
Something sorely missing from the conversation is the infrastructure piece of all of this. It's much sexier to talk about VR experiences or whatever digital activity resonates with you, but none of this works without the infrastructure to connect, share, and engage across individual experiences.
I was (and reluctantly remain) so excited for cryptocurrency and blockchain networks because of this aspect. Broad open networks interoperable at a data level seemed like exactly what is needed to create more dynamic interconnected digital systems. To some extent this is what is happening in the background.
But the obsession with individual experiences, in crypto it is thr scam coins or ridiculous yield products, dominates the conversation. I think this has greatly derailed the other conversations.
Now I worry that we're left with the only other reasonable answer. Facebook builds this infrastructure as their platform and the market ignores all the problems and flocks to it.
Doesn't seem like there are many entities in between these two places that are working on a more robust, and healthy, "metaverse".
My view is that this is an issue finance has already solved. Just regulate ad exchanges for fair practice, require disclosure or transparency to identify anticompetitive behavior, and then license the fuck out of everyone who participates in the market. Seems like the industry has grown enough and clearly is suffering due to lack of sufficient management of externalities and monopoly powers.
The harder part is executing on the above strategy. You will need new institutions or see an expansion or extension of existing institutions. Imagining the FCC trying to do this seems both a likely approach and an incredibly ineffective one.
I would add too that improved regulation of consumer and private data would help significantly. This is probably more likely than the above.
This lawsuit seems like the perfect timing and impetus to get serious about regulation in the digital ecosystem. Just hope we don't fuck it up.
> The harder part is executing on the above strategy. You will need new institutions or see an expansion or extension of existing institutions. Imagining the FCC trying to do this seems both a likely approach and an incredibly ineffective one.
I completely agree and that's what scares me more and more about big tech. We let these huge companies grow for years without really considering the scalability of managing them and now we find ourselves desperately needing to regulate them but not really knowing how.
It reminds me of the content moderation problem with Facebook, the cost of hiring enough humans to adequately deal with content moderation there would quite possibly bankrupt the company, and they know that.
How do you find a sustainable oversight/regulatory strategy when the companies themselves were founded largely on their desire to not figure out those kinds of problems in the first place?
I think we're in the middle of a bit of a transition phase within the industry.
> Every single one of our customers is looking for a path back to something that looks like the mainframe in terms of vertical integration of the business stack.
I think this is always going to be true as a desire, but it's also true that it's likely an impossible state to achieve completely. There will always be consolidation efforts, but with the rate of M&A and growth of new markets and alternative products, I don't think anyone can afford only consolidation as a strategy today. So in the end, it's a losing battle to try and avoid system sprawl at the moment.
> The only financial services companies that are seeing positive uplift from these sorts of initiatives are those with enough resources to try this path
My view has been the exact opposite, only the resource heavy FS companies are the ones who can afford to pursue consolidation!
> Many of our clients are stuck in some contorted stance with half their stack in AS400-land and the other half scattered to the various "cloud" services which are mostly just random websites/services with shitty SOAP APIs (or no APIs at all).
My take, and what I think this article is poorly commenting on, is that everyone is betting on and trying to pursue open banking. Rather than move internal systems into a more simplified format, pushing the market to use common standards and unify behavior across the industry. We're in a phase that is not quite there yet, but bits and pieces are starting to move, so it's very messy. And that's why it seems that strategies for vertical integration and open-source both can coexist in the zeitgeist today.
Caveat, I do work on tech innovation from a regulator and FMI side, so I'm certainly missing the nitty gritty of your perspective.
Yes, definitely it is worth getting into. With your background it may be hard at first but you'll quickly start seeing what things are more so then even long-time crypto bros. In what role? Thats a bit harder.
For starters, lets pretend like you don't want to be a black hat, because thats a pretty poor way to make money. Not even sure if its lucrative.
For more serious work, either as a contractor or direct hire, there are only a few shops really worth working with/for right now. But they definitely exist. The challenge is their funding streams arent as steady as the market would make it seem. Although they may be doing swell right now they will definitely be hurting when the market turns again. Its a classic world of startups made complicated by even more volatility than the traditional market place for startups.
Despite what HackerNews may believe, this is definitely a space of innovation and future promise. Simply look the numbers, play with some of the major applications, compare it to its traditional variants, and make a judgment yourself. Its hard not to see the potential if you can look deeper than superficial comparisons.
If you really want to go through this route: Read the Bitcoin white paper, research some of the arguments for and against central banking, sound money theories versus lender of last resort and credit elasticity, and money as a memory theory. Then read the Ethereum white paper, play with Metamask and some Dapps, compare the pros and cons with your regular banking or finance experiences, and then start looking at some of the more complex systems and Dapps in the space like Uniswap, MakerDAO, AAVE, and others. At that point, you should have more than enough ammo to see the forest and the trees as you'd like.
