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Crypto, NFT's and Web3's Oh My

Discussion in 'General Discussion' started by downndirty, Feb 5, 2022.

  1. downndirty

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    This has hit a tipping point for me, where I think it's worth discussing.

    FOCUS: What has your experience with Crypto, NFT's and other Web 3.0 initiatives (such as Meta) been?

    For me, I recall seeing blockchain as a pretty interesting concept. I thought of it as "digital DNA" that could combine all the information available on complex things like airplane parts and maintenance, or sets of financial records. The Bitcoin usage felt...pointless, but ok. It exploded, surprisingly, and I recall hearing about the emerging 'crypto-bros' in Puerto Rico, as the government attempted to lure them there with tax shelters. Many of them seem to be classic fraudsters, and one of the actors in the Mighty Ducks was profiled as a crypto-bro who specialized in video game economics. I swear to God, someone wrote that down as evidence that this person should be heeded and respected.

    I then recall seeing different "coins" showing up and in the early phases of the Gamestop stock market lunacy, as financial institutions wanted to use some of these coins as collateral to protect them from losses, and essentially take on larger gambles with less protection in "hard" assets. In seeing the proliferation of coins, and in seeing the Matt Damon commercials...somebody has to be putting hard and serious money into getting these coins to be taken seriously as currency. The question is why? What problem does it solve? Was there serious and reasonable concern that a currency without a government attached to it would be somehow superior to the major government-backed currencies? Or is it just enabling some nefarious shit? If I was a legal weed dispensary and I had thousands of dollars in cash I couldn't bank, or a boutique porn producer who Visa, Paypal or Mastercard won't touch, I'd be paying attention....But I think more realistically, if I'm an options trader, I can use fabricated currency to make bets with less consequences than actual currency. If that's the case, then yeah...I can see a few investment houses sinking millions into making these coins seem legit, in an attempt to gamble on them for billions.

    The NFT's seemingly came out of nowhere. I get the idea: digital "collectibles" that will have a tremendous market, because anyone on Earth can buy them or sell them. However, it seems to ignore the fundamental rule of collectibles: they can't be easily replicated, much less effortlessly copied. A digital certificate saying "this image of a monkey is worth $250K" is so unfathomably stupid, I want the drugs people took that believe this would work. Inside a closed system, like a video game where replication can be prevented, they make sense, but so what? Until we have a game or "metaverse" like in "Ready Player One", it's just adding jargon to "game token".

    Then Facebook, the great internet satan, rebranded as Meta, and it started to make a lot more sense. People have online presence, rife with data. Smart devices populating smart homes, and businesses with assets that have an online presence (think interactive museum display, for example) can all populate a digital space together. Blockchain is a way to collect, secure and distribute meta-data. Coins can serve as a way to transfer value between the digital realm and this one. NFT's are a way to create scarcity and thus create value in the digital realm. It all makes sense, in a "Zuckerberg had a dream where he was himself as a robot and the robot started a business" kind of way.

    I'm steering wildly clear of this stuff, but it seems like some of the Silicon Valley folks have started believing their own bullshit a little too deeply, and this all seems very insular to their world. So far, it seems the ink spilled has to do with the rags to riches tales, or the absurdity of their failures.

    Web 1.0 is something I'm nostaglic for, because it wasn't ruled by giant corporations, algorithms or bots.
    Web 2.0 has some benefit over the initial phase, but some really dramatic downsides (see: social media's impact on things like mental health and democracy).
    Web 3.0 sounds like Salvador Dali got a class full of down's syndrom kids on acid to re-design the Sims and sold it to bankers who wanted to launder money.
     
  2. Juice

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    Web 1.0 had high barriers of entry for creating and publishing any content. Web 2.0 opened avenues to create, publish and share content. Web 3.0 is focused around decentralization and ownership of content.

    I think crypto is stupid. The whole “decentralization” aspect is largely bullshit. The vast majority of Bitcoin is held by a very small amount of people. Its only anonymous until you want to off-ramp it into actual currency. It’s not even a real currency; it’s a speculative asset that someone hopes increases in value. It’s a drain on electrical grids and terrible for the environment. A lot of ICOs turned out to be scams. Blockchain is often too slow and cumbersome to actually have any of its earlier-predicted applications.
     
  3. Nettdata

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    I think that blockchain technology will save the stock markets. I can't speak for anything else, but I do believe that.

    GME and retail scrutiny and outcry has started to expose the current markets for the sham that they are.

    The concept of 2 or more days to settle a transaction, never mind the extra rules around Failure To Delivers, synthetic shares, etc, means that nobody is reporting things accurately and are making shit up as they go. The derivative market means Prime Brokers and Market Makers are lending shit out that doesn't exist, and the reporting on it doesn't exist.

    Move that to a blockchain, where it's instantaneous transactions, cuts out the middle man (no more Payment for Order Flow), etc, and you're gold.

    BTW, such a share would also be considered an NFT. NFT is a very generic term, despite it being co-opted for the current "digital art collectible" bullshit.

    Digital stock/securities/dividends can all be NFTs without having any of that shit attached to it.
    And a lot of people have no clue that the current SEC Chairman, Gary Gensler, used to teach blockchain at MIT for years. Go figure.



    The biggest problem I have right now is that so many people have such strong opinions on it without knowing what the fuck it is. They couldn't tell you what a smart contract is, never mind what language goes with what token, or the differences between proof of authority/stake/history/work.

    That's like saying "man, SQL is shit, eh?"

    No. Give me a use case and a specific implementation, and then let's have a discussion. Until then, it's a waste of fucking time arguing specifics.
     
  4. kuhjäger

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    Bitcoin/cryptocurrency always makes me think of the above gag from The Simpsons.

    But I think the ”currency” aspect is for a large part gone from the collective view of crypto. The market is now full of meme coins and pump and dumps that will undermine any potential for the usefulness of blockchain when people get wiped out, and people are suddenly gunshy about legitimate uses of blockchain.

    It is now full of grifters and people trying to make a quick buck, some of them desperate and delusional. You see the same thing with the meme stocks. There are people who legitimately think that AMC stock will hit 100k. If/when this all collapses there will be a lot of people left holding the bag, broke, and it will take a long time for people to trust the technology again.

    The biggest thing that people need to get into their heads is that if you, the average schmohawk on the street, are hearing about the big new stock/investment that will make you rich beyond your wildest dreams, either you are too late to make the play or being grifted.

    tldr: to the moon, rocketship emojis, etc

    edit :
    This is a fantastic point. True accountability and an instant ledger would be a game changer.
     
    #4 kuhjäger, Feb 5, 2022
    Last edited: Feb 5, 2022
  5. Binary

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    This is really my issue with discussing this topic. A vast majority of people have an opinion like, "cryptocurrency is stupid; Bitcoin's value fluctuates daily."

    That makes Bitcoin a bad choice for certain things, but doesn't mean cryptocurrency, or even Bitcoin, is worthless. For better or worse, most blockchain technology requires more sophisticated understanding.

    As a money storage mechanism, cryptocurrency is a tough sell at the moment. Values swing too wildly, so it's like storing your money on a Blackjack table. Expecting cryptocoin to wholesale replace government-backed currency belies a naive and limited view of crypto. Until we solve some of the problems of using crypto as a method of gambling and those with huge pockets being able to swing the markets, it won't be a viable currency replacement. But that doesn't make it useless.

    Currently, I think crypto is a pretty interesting money transfer mechanism. It's pretty amazing that you can essentially send money to anyone with whom you can exchange secure text, without either one of you having to agree on very much, and without either one of you needing to have a bank account or even an address.
     
  6. Aetius

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    This video was a pretty thorough dunking.

    Ultimately crypto is just a ledger with an added trust mechanism. I've yet to see any application in which that trust mechanism is worth anywhere near the additional costs incurred to implement it.
     
  7. NatCH

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    Can somebody post an explanation (or a link to an explanation) of what all this shit is? Explain it like I’m five.
     
  8. Nettdata

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    That’s the real problem. You can’t.
     
  9. NatCH

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    Cool. I hate it then.
     
  10. Juice

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    Basically. Cryptocurrencies have no large-scale viability without a stabilizing mechanism. That stability it’s tied to its ability to hold its relative value for a reasonably predictable amount of time. Those stabilizing mechanisms are generally called “banks.” It’s also the reason that “buying something with crypto” doesn’t mean much if there has to be an inherent conversion to an actual currency to complete an exchange of goods/services.
     
  11. Aetius

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    There's also the fact that the ledger is almost never the least-trustworthy element in a system. Even if you buy everything crypto is selling, what they're ultimately selling you is a harder-to-pick lock on a door that is harder to pick than to force open already.
     
  12. Juice

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    There are similarities between crypto and “wildcat banking” from the 1800s. It’s one of the reasons we have a national banking system now.
     
  13. Nettdata

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    Everyone hates regulation until they get fucked and then they demand the Government come in and fix it for them.

    Funny how that works.
     
  14. Juice

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    All you need is one Uncle Billy to lose the deposit envelope.
     
  15. Rush-O-Matic

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  16. malisbad

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    Gensler's course is pretty meh overall. He's certainly not critical enough about the technology and solutions that the students are throwing out there that are clearly non-starters.

    Whatever crypto is to become, it needs to be tied to the real. Recoverable wallets, immutability of transactions, the financialization and feeing of everything, and the publicly auditable part are key weaknesses. Anything that doesn't treat "blockchain" tech as a stand in for a different data structure is basically a failure.

    Instant settlement between as set, known number of actors _is_ a good feature, but has limited application, generally going to be _very_ industry specific, but overall it's a pretty meh technology. However, from a "public good" issue, the primary problems I feel are: environmental cost of PoW chains, cryptocurrencies, speculative tokens and the hype (practical applications are public hype-proof because they are _not_ expected to have a value), the "early adopter advantage", forking, the decentralized lie.

    Smart Contracts are shit, particularly in the way they're done now, and it's been something else watching all of the problems being put in to them come out. They're useful for automated accounting, but not if things are immutable and decentralized (ETH forked The DAO because of a "bug" lulz).
     
  17. Nettdata

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    This is the exact use case we're experimenting with right now at work. Closed blockchain implementation, using smart contracts to facilitate complex revenue streams automatically. Sure, it can be done some other way, but blockchain checks all the boxes and is less work overall.