Crypto crashes

especially sleazy in that he’s trading on his supposed credibility as the narrator of


Quibble: casino odds are almost always much better than lotteries.

Quote from my stats prof, after spending a few weeks of lectures on gambling and probability.

So what have we learned? If you must gamble, go to a casino. Compared to lotteries, they’re giving money away.


“Better than a lottery”
Powerball odds are about 1 in 292,000,000. So correct, but there’s a reason why lottery tickets are marketed as entertainment, not an investment.


Great news! Let’s see, 1. wastes incredible amounts of electricity to mine 2. useful for illegal activities and tax avoidance 3. a way for rich speculators to make money by not producing any goods or services. I hope it crashes to zero.


I find it rather interesting to watch the arc of blockchain narratives (from those outside of it, that is) went from complete unawareness → maybe tepid interest, if a great deal of confusion → now calling it a “scam” and wishing ill on all those involved (usually labeled, derisively, as “techbros”). Very strange, indeed.
Surely, like any other thing that’s come down the pike, there is a middle ground? Blockchain still reminds me of where the 'net was in the early days, as far as mainstream narratives, when it was just for “nerds” (now slurred as “techbros”), or for porn or for terrorists, etc. The more things change the more they stay the same, I suppose.

proof of work blockchains have hefty externalities. Ethereum and some other schemes exacerbate hardware shortages. And people advocating for shady schemes that allegedly don’t have these problems get swept up by the tide.


I think that blockchain as a technology is still very much a solution in search of a problem. I can imagine legitimate applications for it (such as authenticating contracts), but they went with trying to “solve” money, and that has clearly not worked.


Blockchain technology has a limited number of valid use cases for low-trust low-velocity scenarios. Cryptocurrencies are just a wasteful speculative application of the technology, a scammy attempt by Libertarian techbros to re-construct the gold standard and pre-emptively corner the market.

Also, “nerds” (really “geeks”) != “techbros”. The former are primarily interested in the tech, the latter primarily in the money they can make from it. Wozniak is a geek and Musk is a techbro, for example.


Is that strange? The arc of narratives for things like leaded gasoline or DDT also went from not really knowing → thinking it was really useful → realizing that people pushing it were causing tremendous harm. The only real difference is that blockchain never quite got so high on the useful step, because as it turns out, it’s not.


OK boomer techbro.


Shrug. This is where I disagree. Or at least I think it’s wayyyy too premature to make that call. I read Melanie Swan’s book (and saw her speak) shortly after the first edition came out. I think a lot of it has not yet had a lot of traction - that I see, anyway, I’m not plugged in to IPO/VC goings-on.

Do I think that blockchain has more than a little stench of the California ideology and Libertarianism? Oh yes, it does. Does it have externalities? Has it drawn its share of grifters, scammers and vampiric speculators? Yes, yes, and hell yes. But again: this reminds me of the early days of the (commercial) Internet, when techno-utopians, Libertarians, cipherpunks and so on were envisioning how the 'net was going to save humanity - and make them a pile of cash. Did it turn out quite the way they envisioned? Heck no, but it also did not turn out the way the neo-Luddites imagined, either. The dot-com bubble happened, and a lot of people lost money on some rather janky schemes (although for all the fun getting poked at, I bet a LOT of dog food was ordered via amazon during Covid, it so happens), but the fundamentals of the 'net are still a thing. The cipherpunks might not have been right about PGP adoption, but does nearly everyone use something like TLS every single day? Yep.

Much like the 'net, I think blockchain will be with us for a long time, possibly forever. The 'net also has lots and lots of downsides, including externalities just like blockchain has, and a LOT of what is euphemistically called “disruption”, as well as what Lanier calls “siren servers”. Would anyone but the most radical seriously propose the downfall of the 'net for this, though?

I’m also deeply skeptical of what the fainbois (and fangurlz) of blockchain predict, even if I found Swan’s book a very interesting read. I think where it ends up will be quite different from what both the early adopters and proponents and those that are not think it will end up. Again, just from how much all the discussion around blockchain reminds me so much of the early days of the 'net - from just before being opened up for commercial use to the late 90s, I find the similarities rather striking.

Often I wonder how much of me not getting crypto currencies is politics. I don’r really believe that there is a vast secret cabal of, ahem, globalists trying to steal my money. Perhaps that’s why I don’t really get the appeal.


I’m not sure if that is really the appeal for a lot of the enthusiasts. I think that the appeal for a lot of them is more like the appeal of Amway, with its promises of allowing one to become master of one’s own destiny.

And like Amway, it is built on a very flimsy house of cards that is confusing by design and only makes a small handful of people who got in early rich.


The Internet had a lot of detractors back in the early nineties, but at the same time, it also had a plethora of practical uses with real-world benefits already in its first few years. We have not yet seen anything like that with blockchain beyond a few proposals for things that could happen.

When the dot-com bubble crashed, it took down a lot of companies and erased a lot of investors’ money, but the useful things that existed on the Internet continued to exist and, indeed, thrive in the first decade of this century. With blockchain, what exactly would remain if Bitcoin and Ethereum crashed and burned?

Like I said above, there are almost certainly some practical applications for blockchain technology, but nothing that has been proposed so far seems all that groundbreaking. So I do not think that comparing blockchain to the early world wide web is a very apt comparison.


The discussion here is about cryptocurrency, an application of blockchain technology (the inceptive application, but not the only one). That application is deeply grounded in Libertarianism*, which means the scaminess is baked in.

Now the techbro proponents of cryptocurrency are trying to jam blockchain tech in general into the role of the underlying technology of the next phase of the Internet (“Web3” and “the metaverse” and, in corporate governance, DAOs), despite the lack of suitability and externalities of PoW in that use case. This is only in service of pushing the cryptocurrency scam.

They may succeed given the money and influence now buying into the effort, but I regard this trend with trepidation in a way that I just didn’t with the PC revolution or the early stages of the Internet (which presented far fewer externalities and far more practical use cases).

[* Californian Ideology, while techno-utopian, at least offsets the toxic Libertarianism with some respect for truly progressive ideals beyond “Mommy can’t tell me what to do!”]


I find it interesting that people involved in the currency side of blockchain misrepresent or misunderstand the order of criticism. People were calling it a scam from the beginning. It’s not strange that people involved try to frame the conversation as criticism being by poor benighted fluff heads; this inflates their egos and attempts to encourage chumps to pump in money so they can dump their holdings.

If anything, it reminds me of Enron- and the penny stick arena. But without having any actual assets. So perhaps a more evolved Airplane Game.


Or MLM schemes. In this case the whales at the top of the pyramid keep trading the Math Beanie Babies amongst themselves, letting the fiat value rise and fall, in order to keep the suckers at the bottom interested (and also keep the trading going with fewer rewards). It’s a perverse casino system where the extreme volatility is seen as a feature rather than a bug.


I may not understand all of blockchain, but it’s my understanding (decentralized) blockchain can not really exist without a cryptocurrency.

By California ideology, I mean essentially the same thing here as your definition. Plenty of people that are not just Libertarians were/are attracted to blockchain, as well, and for similar reasons as some of the techno-utopianists/cipherpunks, etc. I’m talking the philosophy that weaved its way from The Whole Earth Catalog, to the WELL, to Wired. If you look at how Douglas Rushkoff and Jaron Lanier talk about the arc of the 'net from the dawn of the (commercial) 'net to now, you’ll note there are very similar comparisons to what people are now saying about blockchain.

Again, I’m not here to claim blockchain is not without its problems. I’m just pointing out how history rhymes. I remember when the (now legacy) media was mostly pushing the narrative that this crazy Internet thing was mostly for nerds, kiddie porn peddlers and terrorists, but what should “respectable” society (meaning, corporations and the elite) do with this thing?

Blockchain cannot exist without a means of validating a block. While that has to involve some proof (e.g. of work, or stake, of storage, of trust, etc.) validation doesn’t necessarily have to involve a crypto- or fiat currency reward as an incentive.

So, again, blockchain is the technology. Cryptocurrencies are an application of that technology. This topic is about cryptocurrencies so conflating the two is taking us off-topic.

The Californian Ideology is not really at work with cryptocurrency, at least not now. Maybe it was when I first started looking into the theoretical concept in 1995, but the blockchain implementation was driven by straight-up Libertarian garbage ideology, and therefore was scammy from the beginning.

As to any implications of technophobic alarmism on my part, I was on dial-up BBS’s in the early '80s, on Usenet in the early 90s, established my current career during Dotcom 1, was running a little Bitcoin miner (mainly out of curiosity) in 2011. I’m what they used to call an “early adopter”. A large part of my job is keeping watch on new technologies and assessing them for clients, and cryptocurrency stinks on numerous levels (even as I acknowledge we’re probably stuck with it for the next decade).

They shouldn’t try to make blockchain the basis of the next stage of Internet infrastructure, that’s for sure. And they need to avoid the mug’s game of cryptocurrency if they weren’t early entrants. Of course they’re doing the opposite in both cases, so I’m left to figure out how to live with both.


How about: the back of the sudoku has an address of a house with graffiti on it. Everybody in public has the same access to the picture as the “owner”, and you can’t be sure it will still be there the next time you pass by.