I have yet to hear a proposal that in my opinion satisfies all of (1)-(3). It would be nice to see some in the coming weeks
What about: “EA should have had a policy to not be involved with or associate with cryptocurrency”?
It’s not like nobody pointed out the problems with heavy crypto involvement. The propensity of crypto projects to end in flames has been known for many, many years.
A sweeping condemnation of crypto based on FTX’s failure seems about as prudent or rational as a sweeping condemnation of democracy based on bad leaders sometimes getting elected, or a sweeping condemnation of capitalism based on corporations sometimes doing bad things.
Many crypto protocols are trying to do a lot of good in the world, in terms of (1) ’banking the unbanked (the 3 billion people without access to financial services like savings or loans), (2) allowing faster, cheaper, more secure remittances, (3) providing secure decentralized property rights in countries without the rule of law, (4) allowing secure digital identities and personal control over educational credentials, employment histories, and medical records, etc., and (5) building oracle protocols that provide secure, decentralized, hard-to-fake information feeds regarding asset prices, weather reports, etc.
I worry that EAs who don’t know much about crypto will over-react to FTX’s fraud by doing a knee-jerk rejection of the whole crypto industry—which boils down to a vision of a secure, decentralized, trust-minimized, economic infrastructure that doesn’t rely on governments printing fiat currency, banks exploiting borrowers, and centralized corporations controlling the flow of information.
A sweeping condemnation of crypto based on FTX’s failure seems about as prudent or rational as a sweeping condemnation of democracy
Ah, but (to be a bit of a devil’s advocate here) a lot of people have been sweepingly condemning crypto since before this whole fiasco, we are just making more noise and have a higher chance to be heard now :)
At risk of derailing the thread, I would argue none of your #1-5 are panning out in any substantive way. (I know a lot about 1 and 2, and claim that the entire crypto industry is at least an order of magnitude less effective than Wave and Sendwave towards these goals.) And on the flip side, most crypto things turn out to be scams and are risky to get involved with.
To me, it seems entirely reasonable to collectively take this opportunity to say “oops” on crypto; agree that the technology has potential but that financial stuff is built on trust and crypto attracts too many get-rich-quick-ers and is thus toxic for the community, and bail.
I understand this skepticism. You’re right that crypto still has a lot to prove in terms of large-scale utility, security, reliability, and regulatory compliance.
I would just caution that in the early 2000′s after the dot-com bubble, many people expressed the same kinds of skepticism about the Internet itself, and about all online businesses. From 1995 to 2002, there were too many scammers, sociopaths, and opportunists who had ridden the initial wave of hype; security protocols were not well-developed; regulation was patchy and unclear; the use cases were often dubious; VCs & major investors were often naive and didn’t do their due diligence; billions were lost in bad investments; the NASDAQ lost 78% of its value, etc.
But then, somehow, between 2002 and today, the Internet changed the global economy and created trillions of dollars of value. Maybe crypto will do something similar; maybe not.
But it’s important to remember that the kinds of shenanigans that happen in young, small, hyped, immature, highly volatile industries aren’t necessarily representative of what happens after those industries mature, and get folded into the mainstream economy.
Huh, useful analogy. I do think cryptocurrency has potential, I just think the expected altruism-value of the whole thing is quite negative currently, and has been for 5+ years, and this was super not true in the early days of the internet, even during the crash years.
(I was a very well-connected teenager in 1999 and I remember some things about the early internet… I remember the browser wars, Netscape, AltaVista, then Google, eBay and PayPal, as well as the adware, email viruses, chain letters, worms, hoaxes, etc.)
Early internet was clearly awful in so many ways but I think the benefits outweighed the drawbacks, at least as a kid—I have so many instances of getting value from the internet—mostly through education (by searching to solve problems, discovering forums, sharing info, etc).
Similarly, I was a fairly early adopter for crypto. Again, lots of technical promise. Seemed quite a cool community early on; I sipped 0.05 btc from the Bitcoin Faucet in early 2011, then gave in and bought $100 worth (at $8). Then I waited for useful stuff to come of it. And waited. I remember making arguments like “this is the first time computers can talk to each other and exchange value” to my friends and family. A few other coins seemed interesting—Namecoin seemed useful but didn’t pan out; I spent some time studying Stellar when it came out too, for similar “computers can send value” type reasons. I had started to get bored in 2015 and missed the launch of Ethereum, which was quite a promising thing in retrospect, but I didn’t miss the DAO collapse. I think it was around this time (2016-ish) that I started thinking that maybe the whole ecosystem was net negative.
Even if you’re correct about crypto becoming a mature and powerful industry someday (and i don’t think you are), this doesn’t change the fact that right now, it is utterly infested with bubbles and scams.
Why should EAers be involved in crypto right now, as opposed to distancing ourselves until crypto stabilises? Because right now I don’t see any reason to be confident in the ability of EA leadership to pick out the scams from the non-scams. Imagine the reputational damage if the FTX debacle happens again.
I hear you. I respect different assessments of the risk/reward for being linked to a young, volatile, unproven industry (such as crypto) that has been subject to many scams, hacks, and bad actors.
However. Crypto still includes
(1) a lot of smart, idealistic, young, technically capable people who lean towards rationalism, and who are distrustful of government do-gooding that isn’t evidence-based, and thus who are potentially aligned with EA
(2) a number of visionary leaders who are committed to developing crypto in ways that reduce global poverty, and who thus seem aligned with ‘classic’ EA cause areas
(3) a lot of ornery older investors who aren’t just invested in crypto, but who appreciate those who keep an open mind about it, and who might be interested in EA
Crypto’s failures are massive and obvious. Yet it’s hard to see how it has delivered the goods. That might be a matter of how it’s portrayed in the media.
So I’d ask you: how many of the unbanked has it banked? What fraction of remittances are via crypto, and how have the people using crypto remittances been affected by the volatility in crypto? Is it making progress on providing decentralized property rights in lawless nations, and are we pleased with the way that benefits and costs have been distributed in these populations? What control will I have over my employment history or medical records via crypto, when my doctor has my medical records and I have to publicize my employment history to get hired? Why do I need a decentralized, secure, hard-to-fake weather report?
I don’t expect you to have answers to all these questions, but I will openly say I was skeptical of crypto before this crash, and it’s even easier to lean into that skepticism now. The specific thing I think crypto seems good for is funding real-money prediction markets. But I’d trade that away in a heartbeat to get rid of the ills I’ve seen come of crypto.
Convincing people like me to come ’round will require showing that there really is a large magnitude of realized practical benefit. It takes time, I am patient, but right now, it seems right to me for EA to keep crypto at arm’s length in most cases.
If I said, “EA should have had a policy to not be involved with or associate with the weapons industry”, would you have the same objection? (not saying crypto is as bad obviously, just that some form of divestment is obviously possible). FTX was heavily involved in the core of EA, and nothing was done to discourage them tying themselves to EA at every turn. Do you really think the reputational fallout would have been as great if SBF was a mere anonymous donor?
What about: “EA should have had a policy to not be involved with or associate with cryptocurrency”?
It’s not like nobody pointed out the problems with heavy crypto involvement. The propensity of crypto projects to end in flames has been known for many, many years.
A sweeping condemnation of crypto based on FTX’s failure seems about as prudent or rational as a sweeping condemnation of democracy based on bad leaders sometimes getting elected, or a sweeping condemnation of capitalism based on corporations sometimes doing bad things.
Many crypto protocols are trying to do a lot of good in the world, in terms of (1) ’banking the unbanked (the 3 billion people without access to financial services like savings or loans), (2) allowing faster, cheaper, more secure remittances, (3) providing secure decentralized property rights in countries without the rule of law, (4) allowing secure digital identities and personal control over educational credentials, employment histories, and medical records, etc., and (5) building oracle protocols that provide secure, decentralized, hard-to-fake information feeds regarding asset prices, weather reports, etc.
I worry that EAs who don’t know much about crypto will over-react to FTX’s fraud by doing a knee-jerk rejection of the whole crypto industry—which boils down to a vision of a secure, decentralized, trust-minimized, economic infrastructure that doesn’t rely on governments printing fiat currency, banks exploiting borrowers, and centralized corporations controlling the flow of information.
Ah, but (to be a bit of a devil’s advocate here) a lot of people have been sweepingly condemning crypto since before this whole fiasco, we are just making more noise and have a higher chance to be heard now :)
At risk of derailing the thread, I would argue none of your #1-5 are panning out in any substantive way. (I know a lot about 1 and 2, and claim that the entire crypto industry is at least an order of magnitude less effective than Wave and Sendwave towards these goals.) And on the flip side, most crypto things turn out to be scams and are risky to get involved with.
To me, it seems entirely reasonable to collectively take this opportunity to say “oops” on crypto; agree that the technology has potential but that financial stuff is built on trust and crypto attracts too many get-rich-quick-ers and is thus toxic for the community, and bail.
I understand this skepticism. You’re right that crypto still has a lot to prove in terms of large-scale utility, security, reliability, and regulatory compliance.
I would just caution that in the early 2000′s after the dot-com bubble, many people expressed the same kinds of skepticism about the Internet itself, and about all online businesses. From 1995 to 2002, there were too many scammers, sociopaths, and opportunists who had ridden the initial wave of hype; security protocols were not well-developed; regulation was patchy and unclear; the use cases were often dubious; VCs & major investors were often naive and didn’t do their due diligence; billions were lost in bad investments; the NASDAQ lost 78% of its value, etc.
But then, somehow, between 2002 and today, the Internet changed the global economy and created trillions of dollars of value. Maybe crypto will do something similar; maybe not.
But it’s important to remember that the kinds of shenanigans that happen in young, small, hyped, immature, highly volatile industries aren’t necessarily representative of what happens after those industries mature, and get folded into the mainstream economy.
Huh, useful analogy. I do think cryptocurrency has potential, I just think the expected altruism-value of the whole thing is quite negative currently, and has been for 5+ years, and this was super not true in the early days of the internet, even during the crash years.
(I was a very well-connected teenager in 1999 and I remember some things about the early internet… I remember the browser wars, Netscape, AltaVista, then Google, eBay and PayPal, as well as the adware, email viruses, chain letters, worms, hoaxes, etc.)
Early internet was clearly awful in so many ways but I think the benefits outweighed the drawbacks, at least as a kid—I have so many instances of getting value from the internet—mostly through education (by searching to solve problems, discovering forums, sharing info, etc).
Similarly, I was a fairly early adopter for crypto. Again, lots of technical promise. Seemed quite a cool community early on; I sipped 0.05 btc from the Bitcoin Faucet in early 2011, then gave in and bought $100 worth (at $8). Then I waited for useful stuff to come of it. And waited. I remember making arguments like “this is the first time computers can talk to each other and exchange value” to my friends and family. A few other coins seemed interesting—Namecoin seemed useful but didn’t pan out; I spent some time studying Stellar when it came out too, for similar “computers can send value” type reasons. I had started to get bored in 2015 and missed the launch of Ethereum, which was quite a promising thing in retrospect, but I didn’t miss the DAO collapse. I think it was around this time (2016-ish) that I started thinking that maybe the whole ecosystem was net negative.
Even if you’re correct about crypto becoming a mature and powerful industry someday (and i don’t think you are), this doesn’t change the fact that right now, it is utterly infested with bubbles and scams.
Why should EAers be involved in crypto right now, as opposed to distancing ourselves until crypto stabilises? Because right now I don’t see any reason to be confident in the ability of EA leadership to pick out the scams from the non-scams. Imagine the reputational damage if the FTX debacle happens again.
I hear you. I respect different assessments of the risk/reward for being linked to a young, volatile, unproven industry (such as crypto) that has been subject to many scams, hacks, and bad actors.
However. Crypto still includes
(1) a lot of smart, idealistic, young, technically capable people who lean towards rationalism, and who are distrustful of government do-gooding that isn’t evidence-based, and thus who are potentially aligned with EA
(2) a number of visionary leaders who are committed to developing crypto in ways that reduce global poverty, and who thus seem aligned with ‘classic’ EA cause areas
(3) a lot of ornery older investors who aren’t just invested in crypto, but who appreciate those who keep an open mind about it, and who might be interested in EA
Crypto’s failures are massive and obvious. Yet it’s hard to see how it has delivered the goods. That might be a matter of how it’s portrayed in the media.
So I’d ask you: how many of the unbanked has it banked? What fraction of remittances are via crypto, and how have the people using crypto remittances been affected by the volatility in crypto? Is it making progress on providing decentralized property rights in lawless nations, and are we pleased with the way that benefits and costs have been distributed in these populations? What control will I have over my employment history or medical records via crypto, when my doctor has my medical records and I have to publicize my employment history to get hired? Why do I need a decentralized, secure, hard-to-fake weather report?
I don’t expect you to have answers to all these questions, but I will openly say I was skeptical of crypto before this crash, and it’s even easier to lean into that skepticism now. The specific thing I think crypto seems good for is funding real-money prediction markets. But I’d trade that away in a heartbeat to get rid of the ills I’ve seen come of crypto.
Convincing people like me to come ’round will require showing that there really is a large magnitude of realized practical benefit. It takes time, I am patient, but right now, it seems right to me for EA to keep crypto at arm’s length in most cases.
I think this fails (1), but more confidently, I’m pretty sure it fails (2). How are you going to keep individuals from taking crypto money? See also: https://forum.effectivealtruism.org/posts/Pz7RdMRouZ5N5w5eE/ea-should-taboo-ea-should
If I said, “EA should have had a policy to not be involved with or associate with the weapons industry”, would you have the same objection? (not saying crypto is as bad obviously, just that some form of divestment is obviously possible). FTX was heavily involved in the core of EA, and nothing was done to discourage them tying themselves to EA at every turn. Do you really think the reputational fallout would have been as great if SBF was a mere anonymous donor?