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
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