Crypto in 2026: Oh, This Is the Bad Place

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iibobev about 3 hours ago 134 commentsRead Article on stephendiehl.com

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Discussion (134 Comments)Read Original on HackerNews

alehrs•about 2 hours ago

I've been deep into crypto for years and I was a big stablecoin supporter. I was fascinated by the tech and I still am. But everything outside the tech itself is just trash, scams, and gambling. I've come to believe that "pure" decentralization is neither practical nor particularly convenient. The only real use case that makes sense to me is giving people in developing countries access to a stable currency they can actually hold, trade, and invest in, meaning USDT or USDC. Outside of that, as an EU/US citizen I don't see why I'd hold stablecoins instead of fiat. It's actually riskier in every meaningful way, and I already have access to every form of investment I could want. It's genuinely fascinating to think about a technology that can empower people who otherwise have no access to financial tools. But that comes at the cost of millions of people around the world gambling with money they can't afford to lose, convinced they're investing their way to wealth.

danielvaughn•31 minutes ago

I got into crypto in 2017 when I came across the phrase "money is a technology". That idea fascinated me. But fast forward several years later, and it's obvious that money might be a technology in the sense that it's a tool, but more importantly, money is a culture.

ozgrakkurt•about 1 hour ago

I live in less developed countries so it is actually useful for me but I see it the same way as you wrote here.

Low-life businessmen ruined the technology outside of some spaces where there is strong tech leadership. They did too much damage to reputation of the whole industry

They did the same butchering to LLM/AI tech.

netsharc•19 minutes ago

Silicon Valley was a place of engineering invention, and then the money-people saw, "Oh, there's riches to be made here!"...

mrhottakes•5 minutes ago

They explicitly built cryptocurrency as a way to hoard more wealth. It was the "engineers" not just the money people.

dghlsakjg•9 minutes ago

Silicon Valley came up as a result of the military industrial complex in the Cold War.

Money was always the point.

Sharlin•about 2 hours ago

Technological solutions to social problems only tend to work when the problems are of the type "I wish it were easier to rid people of their money".

akoboldfrying•34 minutes ago

Agriculture. Plumbing. The printing press. Electricity. Vaccines. Fiat money itself, which is a technology that is better than the technology of barter, which is better than each person having to grow or make every material thing they need.

jakelazaroff•17 minutes ago

"How do we remove feces from our living spaces" and "how do we stop dying from pathogens" are not social problems.

neonstatic•15 minutes ago

I think the point that is missed is all of these solved real problems that needed solving. I feel over the last decade we have exhausted the obvious benefits of the Internet revolution and more often than not we were seeing clever technology being developed, that wouldn't solve any problems. Then long and painful search for applications of that technology would ensue. Cases in point: crypto, llms.

rglullis•about 2 hours ago

Exactly. Cryptocurrency is useful as as a backup system against failing/weak institutions. Just that. Like insurance, it was not there to make anyone's lives better but simply to become a safeguard to avoid complete collapse.

mrhottakes•4 minutes ago

It's not even useful for that, it's controlled by those same institutions now.

astoor•about 1 hour ago

If it was just a backup against failing/weak institutions it would be relavively benign, but the problem is that it incentivises machiavellian types to undermine society and nation states for their own personal profit - see e.g. The Sovereign Individual[0].

Combined with effective accelerationism[1] you can see why we could be heading towards somewhere a whole lot worse than The Bad Place.

[0] https://en.wikipedia.org/wiki/The_Sovereign_Individual

[1] https://en.wikipedia.org/wiki/Effective_accelerationism

pjc50•about 1 hour ago

However, I think there's an argument that the existence of that backup, or at least its marketing, might of itself encourage people to make the institutions fail so they can profit from it.

rglullis•about 1 hour ago

That's a weak argument. If the institutions can collapse because a few powerful people can work against it, then the institution has already failed in the first place.

Trump and the general rise of Populism is not the cause of the fall of Western democracies, it is a consequence.

lou1306•42 minutes ago

> The only real use case that makes sense to me is giving people in developing countries access to a stable currency they can actually hold, trade, and invest in, meaning USDT or USDC. Outside of that, as an EU/US citizen I don't see why I'd hold stablecoins instead of fiat

The logical conclusion of this train of thought (which I agree with) is that people who heavily invested in crypto may significantly benefit from weakening strong currencies and institutions. Make of that what you will.

zmgsabst•32 minutes ago

I use crypto for exchange between friends (US + EU) and myself (SE Asia).

Our options are IBAN (slow!), WesternUnion (fees, denials, hassles) or crypto (10min, cheap). We chose crypto - because it’s the practical path from their bank to mine. CashApp and Coinbase interface with my actual bank accounts, on my end.

If you don’t do international banking, then much of the utility is diminished — so I’m not surprised by your perspective. But once you try to move money between continents, even with ID and documentation, you’ll understand that Coinbase is a godsend.

Nursie•13 minutes ago

Or a service like Wise which is cheap and takes a few minutes most of the time.

Never had much of a need for other services when transferring across the globe.

whiplash451•30 minutes ago

Aren’t there fees to convert fiat from/to crypto on both ends?

zmgsabst•18 minutes ago

Yes — there’s fees converting from/to fiat and when sending the crypto.

You’ll generally have the conversion slippage and transaction fee regardless - so the difference is the second conversion.

In practice, that isn’t too expensive and worth it for the speed; though that may change if you’re sending larger or smaller amounts than I am (in $1k-10k range).

mothballed•28 minutes ago

You can make the fees rather than pay them if you make the market. There are decentralized exchanges where this can be done ~trivially for even low amounts. The fees are for those who want instant gratification.

sfmz•about 1 hour ago

An emerging use-case is a bank account for AI agents. I read that Coinbase 'Base' Ethereum layer2 is popular for AI banking.

ses1984•about 1 hour ago

Or you could just give your agents a debit card number loaded with only as much money as you specify.

sfmz•about 1 hour ago

You spin up agents and want them to paid without opening a bank account... or spin-up hundreds of agents... or your country isn't very well integrated with western banking rails. I think there is more to consider.

vlian2088•about 1 hour ago

>Outside of that, as an EU/US citizen I don't see why I'd hold stablecoins instead of fiat.

because fiat can be taken away from you.

thomashabets2•about 1 hour ago

Hate to break it to you, but anything can legally be taken away from you by the justice system. And fighting the government can put you in prison, too.

It's just LARPing.

orwin•about 1 hour ago

> It's just LARPing.

Usually LARPers are conscious that they don't have magic or any sword skills. I'm pretty sure the person who you respond too really think what he wrote.

mothballed•35 minutes ago

Yet the government went out its way to ban bearer shares, bearer bonds, numbered anonymous bank accounts, large denomination currency, anonymous companies, and all the other methods of anonymous banking.

Seems they were having trouble "taking it away by the justice system."

For the same reason government across the world have pressured or banned exchangers of monero.

vlian2088•about 1 hour ago

tell that to IRGC.

himata4113•about 2 hours ago

Cryptocurrency is very much a double edged sword, on one hand it enables people to transact monetary value bypassing for-profit operators such as western union and paypal as well as hinders corrupt government institutions from confiscating or otherwise devaluing what you own. Of course this also allows people with harmful intentions to do the same, bypass centralized systems that keep fraud in check, mitigate theft and whatnot.

But all I know is that the only reason why some of my friends are able to work remotely from their country is crypto currency as that is the only way they're able to get paid without 30% to 40% being lost in fees as well as being stored in a currency that might lose a majority of its value overnight. They work real, productive swe jobs and earn enough to support not only themselves, but everyone around them as well making the place they live in a tiny bit better.

this_user•about 1 hour ago

> it enables people to transact monetary value bypassing for-profit operators such as western union and paypal

You are not even getting rid of that, you are just replacing them with a different set of middlemen in the crypto ecosystem who are demanding substantially higher fees than, say, a Wise does.

raincole•18 minutes ago

It's a very weird comment as people who actually use crypto (not flipping or holding) are those who without other viable choices. They're not replacing something. Those transactions would simply not happen without crypto.

Notice that the parent comment didn't use the word replacing.

akoboldfrying•26 minutes ago

Who are these middlemen? The miners?

krelian•10 minutes ago

At the other end when you need to convert your crypto to real currency.

zmgsabst•30 minutes ago

CashApp doesn’t seem any different than Wise; I routinely use both — including CashApp for crypto.

thinkingtoilet•1 minute ago

>bypassing for-profit operators such as western union and paypal as well as hinders corrupt government institutions from confiscating or otherwise devaluing what you own

There are transaction fees so you're still paying someone. And the it's not government taking what you own, it's scammers!

fn-mote•about 2 hours ago

I’m ignorant of this but it seems wrong.

30% lost in fees??

Can they not manage to open a dollar-backed account somewhere?

Also:

> being stored in a currency that might lose a majority of its value overnight

I for sure put crypto in this same category. “Stablecoin” or not.

pjc50•about 1 hour ago

> Can they not manage to open a dollar-backed account somewhere?

Outside the West, the answer is quite often "no". And trying to open an account in the US from outside will run into ID+residency requirements.

kakacik•40 minutes ago

Sounds more like social security avoidance, or general taxation avoidance.

Which country will take 30% cut from incoming foreign transaction? The highest combined fees I could find are for Sub-Saharan Africa and those are below 10%, supporting tax/social evasion claim.

Could be completely legal but when folks don't provide details its often safe to assume the worse scenario when it comes to money, taxation and screwing the government.

ozgrakkurt•about 1 hour ago

Yeah no, I it is really really bad where I live and it is similarly bad in places outaide of western financial network as far as I can understand.

Another way to mitigate this scam is wise revolut etc. But they are also mostly western

fragmede•about 1 hour ago

> Can they not manage to open a dollar-backed account somewhere?

It's harder, if not impossible, if you've been got the wrong set of papers, or are missing them.

> this same category. “Stablecoin” or not.

Like it or not, USDC and USDT do seem to actually be stable. They've been pegged to the dollar for a while now, with increased scrutiny.

blenklo•about 2 hours ago

And they also make their place they live and the rest of the planet a tiny bit worse due to the energy consumption of bitcoin, if they support bitcoin in any form even with lightning.

A question though: How do they exchange their crypto into local fiat?

aurareturn•about 2 hours ago

Having worked in crypto analytics briefly, normal people have no clue how much fraud and scams are happening in crypto at the exchange level.

FTX collapsed and was caught but more conservative crypto exchanges continue to use customer funds, trade against their own customers, use insider information, etc.

Even a supposedly "legitimate" exchange like Coinbase is allowing unregistered securities to trade on its platform.

coreyh14444•15 minutes ago

It is the main use case!

jdw64•about 2 hours ago

Actually, this industry routinely runs what you'd call "hero marketing," and what makes it especially dangerous for young people is that they're being sold success stories by actors playing people who don't exist, fictional characters who supposedly got rich through crypto.

1.A tiny handful of success stories are pushed to the front.

2.The vast majority who lost money are made invisible.

3.It manufactures the expectation that this time, you could be the one.

4.The price movement itself becomes the reward stimulus.

5.The platform, the exchange, the issuer, and the early investors all hold an advantage in fees or liquidity.

The problem is that this is identical to gambling. But it's dressed up as "finance." The industry obscures the fact that crypto functions as gambling by making people think of it as a new kind of financial asset.

Of course, crypto is technology. It's true that there are technological components, blockchains, smart contracts, and the like. But just because something contains technology doesn't mean the mass marketing around it qualifies as technology investment. Anti-counterfeiting technology is also technology. That doesn't make putting money into circulating counterfeit bills an "investment in currency security technology." By the same logic, the fact that crypto contains technological elements is being used to justify the marketing structure built on top of it, and that, precisely, is the deception.

And for all the talk of decentralization, the reality that USDT and similar tokens end up tethered to a single dominant exchange, heavily coupled to nation states, essentially proves that true decentralization is impossible in practice. This is only natural. Decentralization makes trading inconvenient, so people gravitate toward a single centralized exchange. And at that point, what exactly is the difference between that exchange and a government?

pjc50•about 2 hours ago

Yes, and: it's not completely exclusive to crypto. The UK FCA had to ban "binary options", a financial instrument using traditional money, due to the high volume of scams. https://www.fca.org.uk/consumers/binary-options-scams

kakacik•13 minutes ago

While true about that 'hero' marketing, you can claim the same about literally any marketing campaign, or things like American Dream (TM).

How many teenagers looked with starry eyes into US military recruiting PR campaigns, then get send to Iraq / Afghanistan, and instead of glory and cool adventures that were promised they saw death of peers and civilians on massive scale, they became invaders for at best questionable causes, experienced huge human suffering and destruction... which at the end didn't achieve anything positive at all, neither for US nor for locals, massively in contrary. Heroes look very differently in hindsight.

SideburnsOfDoom•about 2 hours ago

It's gambling, and it's gambling in dodgy unregulated casinos.

"This guy won big!" is absolutely a part of the marketing that pulls in the other suckers. It's not a counter-example, it's part of the scheme.

I know people who really enjoy a night out losing a 3-digit sum of money in a casino. Somehow they get sufficient reward from that to make the expense worthwhile for them.

The difference is, that unlike the Crypto enthusiasts, they don't afterwards try to convince me at length that gambling can and should replace money transfers, foreign exchange, banks in general, pension funds, the governmental exchequer etc. That would be cultish lunacy.

INTPenis•about 2 hours ago

I've been sharing author's view for quite a while now, namely that there must exist a market of goods to give a currency real value.

But I must contradict the author, because there is a market of goods, and bitcoin is indirectly involved in it. Namely the dark web market of drugs.

People love drugs, and they use a lot of them, drugs turnover a huge amount of value. And right now people are buying bitcoin, because it's often safe to buy, and exchanging it for monero, that they then use to buy drugs.

I'm very much interested in this market, and how it affects crypto.

pydry•about 2 hours ago

Ive been saying this for a while. Cryptocurrencies are an index tracker for the underground economy.

They're not without value and theyre not all speculation but what value they do have is almost entirely about facilitating transactions which at least one state considers illegal.

I used to think that this would mean that they'd be outright banned eventually but it seems that the "index tracker for the underground economy" proved to be too profitable an investment for western oligarchs and the chance to undermine rival countries' capital controls proved too alluring for the imperialists in government.

usrusr•about 1 hour ago

I call them ransom futures. But given how many of the ransom situations that are started with "give us N amount of crypto X!" I suspect being resolved entirely in conventional money, through some subcontractor chain of decreasingly white-hattish "security consultancies" that somehow make the problem go away (by knowing someone who will make the problem go away for money), your take is probably the more accurate one.

thrownawaysz•about 2 hours ago

>Meet Mike. Mike is a college freshman who is exposed to crypto through social media. He downloads Coinbase, buys ten dollars of CumRocket because his friend group is in on it, watches the price move, and feels for the first time the dopamine rush of gambling on non-economic random walks. By his sophomore year he is onto harder drugs: 0DTE options on triple-leveraged single-stock ETFs he does not understand, traded on a gamified brokerage built to look like a video game. By twenty-two he has a Kalshi account, because betting on the outcome of a presidential primary or a reality television show winner has been reframed as participation in financial markets. By twenty-four he has hit rock bottom in the sportsbook, firing off ten-leg parlays on Tibetan ping-pong and third-division water polo at two in the morning because the games he has actually heard of no longer move fast enough to feel like anything. Mike believes he is investing. Mike is gambling. Mike is on the express train to a gambling addiction, and he is meaningfully poorer at every stop along the way.

tbh that reads a bit like the war on drugs propaganda we got in school back then. You don't want to try the devil's lettuce cause in 2 years you will be a homeless heroin addict in San Francisco, or worse!

pjc50•about 2 hours ago

This is a "vice" thing. Vices are things which match this pattern like alcohol or drugs:

    - many people don't indulge at all
    - many people indulge occasionally to no real harm
    - some people indulge in a way that makes a short term recoverable mess
    - a few people get addicted and are unable to stop. May or may not also be harmed at this point, but this tends to lead to cumulative harm
    - a few people really mess up tragically

The people in the first few groups can argue "why should this be banned, it's not harming me" with some validity. But there's also people for whom the vice overrides their self-preservation and they get into a bad financial and/or health position, and can only be saved by abstention. They may require help to abstain, such as the UK "legitimate" gambling industry's "self-ban" mechanism.

tialaramex•about 1 hour ago

One thing that does vary is whether "it's not harming me" works out. Booze in particular has massive social consequences, drunk people harm non-drinkers not just themselves. I've never worried that degenerate gamblers leaving a slot machine parlour at 2am will attack me - but outside the bars that's definitely possible which is why they're required to hire security and have police contact

StilesCrisis•41 minutes ago

I think this description is deceptive because it assumes bucket sizes ("many," "some," "a few"). Those bucket sizes work for alcohol and some recreational drugs. But they're tragically wrong for others--very very few people partake of heroin "occasionally with no real harm." You're almost certainly heading towards the last two buckets.

pjc50•38 minutes ago

True, but if you start counting codeine as an opiate the bucket gets a lot larger. And includes the Purdue Pharma scandal. Lots of people use opiates under medical supervision, with varying degrees of help and harm.

> assumes bucket sizes ("many," "some," "a few")

I was trying to be as vague as possible here!

ligne•about 1 hour ago

...which is definitely an improvement over their previous slogan, "when the fun stops, stop"¹.

__ ¹ coincidentally what my Dad always used to say about black tar heroin.

RobotToaster•about 2 hours ago

Propaganda always works best when it's true, but selective. People that ended up homeless heroin addicts 2 years after smoking cannabis exist, the propaganda just neglected to mention that they are a minority.

Just like the failure of the war on drugs, trying to ban crypto and arresting anyone that owns it would almost certainly be a dismal failure.

Nursie•5 minutes ago

That's why the on and off ramps should be regulated, heavily, instead.

Presuming you want to 'kill' cryptocurrency, starving it of interactions with the real economy seems a much easier way to do it.

coldtea•about 2 hours ago

>tbh that reads a bit like the war on drugs propaganda we got in school back then.

Well, propaganda or not, hard drugs are bad for you.

lionkor•about 2 hours ago

Well it's not wrong, the solution isn't abstinence though, it's proper education, help for those who struggle with it, and making it legal and regulating it.

keiferski•about 2 hours ago

Just because the methods used by the war on drugs failed doesn’t mean that drugs are somehow good for you. It just means that the methods were ineffective.

onionisafruit•29 minutes ago

Not just ineffective, but counterproductive. Kids saw through the propaganda and that made many of them discount all warnings about drugs. That’s why we shouldn’t abide well intentioned propaganda.

altmanaltman•about 1 hour ago

Yeah like why is Mike thinking he is investing if he is betting on a literal sportsbook? That is delusion and has nothing to do with crypto. I am not pro crypto but the logic here doesn't make a lot of sense.

You can say buying crypto is like gambling sure but it literally is not. It's investing in an extremely risky asset that can go to 0. But it is very different than placing a bit on Kalshi or a sportsbook.

I actually have bought CumRocket before but I also bought a lot of crypto and sold it at a profit. I did not use Kalshi later or sportbooks to gamble. I moved to invest in stocks later in life but bought boring etfs and index funds. Trading bitcoin actually taught me risk management and stocks seem much easier to handle in terms of strategy.

Sure I could've turned into a degenrate gambler but that's literally not crypto's fault

speed_spread•about 2 hours ago

I read it as another verse of Eminem's "Guilty Conscience".

nytesky•about 2 hours ago

Isn’t this related to financial nihilism where normal people can’t invest or earn enough to grow money for basic life costs like housing and college with standard investments or jobs. They need a moonshot, hence gambling has become normalized. It isn’t even about the White House or crypto per se, it’s a desperate embrace of risk to catch up.

SquareWheel•about 2 hours ago

Note that this post includes a major spoiler for the show The Good Place. The show is fantastic, so I'd suggest not reading unless you've already finished season 1, or have decided it's not for you.

normie3000•about 2 hours ago

Now I know there's a spoiler, the title of the article is a spoiler.

audunw•about 2 hours ago

I only started watching it after I got spoiled, and didn’t mind it. Before I knew about the premise I thought the show looked boring. Didn’t pick it up based on the excerpt on Netflix.

The show doesn’t really rely on not knowing the twist. And even saying there’s a spoiler for season 1 will probably clue most people onto what the twist is anyway

nytesky•about 2 hours ago

I am ride or die Good Place; my family has the Trolley Problem party game. Don’t spoil it if you haven’t seen it.

But honestly I feel the Darkest Timeline is more apt, ala Community.

mcintyre1994•about 1 hour ago

I do agree that there's a huge amount of fraud and scams, and obviously that's only got worse since the President of the US started being part of that ecosystem.

But at the same time there is also finally real finance happening on-chain too. Backpack launched a SpaceX token at IPO that can be moved between on-chain and your brokerage. I think Coinbase announced their on-chain equity offering will have the same capability. Just yesterday Bailie Gifford launched a tokenised fund where the actual register of record is on-chain. I still think crypto has significant potential as financial rails, and that does seem to be being explored by real financial players now too.

titanomachy•about 2 hours ago

> A shadow dollar system, newly blessed by federal statute, is quietly migrating the savings of the global poor onto the balance sheets of a handful of opaque private companies.

I'm out of the loop on this one. Is he talking about some crypto thing?

deweller•about 2 hours ago

I assume he is referring to the uptick in stablecoin adoption. USD Stable coins are US dollar-backed cryptocurrency tokens that are intended to always hold a value of $1 USD.

Stablecoins are not backed by a central bank. Instead their source of value comes from a private company that holds actual US dollars or USD-equivalent reserves (like treasury bills, etc).

RobotToaster•about 2 hours ago

I've always wondered, how do the companies that run stablecoins make a profit? Are they buying treasury bonds?

koolba•about 2 hours ago

Each $1 of stable coin is supposed to be backed by $1 of dollar or short term equivalent. So the issuer is making money by collecting interest on it.

3-4% of billions (USDC alone is $80 billion) would itself be billions of dollars of annual interest. Easily covering the operating cost of these companies.

However, they don’t keep it all. Nobody is going to let you hold their cash in size without getting a slice of the interest. All the big players (like an exchange holding USDC of its patrons) cut deals with the stable coin issuers for a revenue split of that interest.

Ekaros•about 1 hour ago

Well if you pay 0 on deposits and then loan money out even just to treasuries there is money to be made. Get enough volume and it is big. Next step is riskier investments and not being fully backed... After all it is just IOU you minted yourself...

luke5441•about 1 hour ago

The profit created from issuing currency is called seigniorage. It is madness letting private companies capture this.

kikimora•about 2 hours ago

Yes, bonds, sometimes corporate debts, often money market participation.

nytesky•about 2 hours ago

Is it similar to WildCat banking?

andy81•about 1 hour ago

More than similar. Another word for the same thing.

l23k4•about 2 hours ago

When you go outside of the nice countries, local money becomes worthless. Nobody wants it, they'd much rather have dollars instead.

Stablecoins for the first time offer a reasonable way for the global poor to store value in dollars, or in the form of any relatively stable currency.

Obviously this comes with all kinds of issues, but it's still better than the original situation where "savings" simply didn't exist except in the form of physical dollars or gold bought at a significant premium.

pjc50•about 2 hours ago

While this has a very reasonable point about access to dollars, it's also funny to contrast it against the breathless propaganda from crypto advocates that the dollar itself is going to be the victim of hyperinflation Real Soon Now.

ryanjshaw•about 1 hour ago

Crypto advocates are not one homogenous blob.

dragandj•about 2 hours ago

The global poor already had ways to store value in dollars. They could simply exchange whatever meager savings they had into... real dollars! And they have been doing that for decades. I don't know whether anyone in the west really believes in this bullshit of cryptocurrencies that give the global poor options.

ryanjshaw•about 1 hour ago

This is simply not true. In South Africa, one of the largest African economies, you cannot hold foreign currency unless you are traveling and then you have to sell it back within 30 days of returning to the country. You can open a foreign currency account with a minimum of eg R1500 which is half the monthly minimum wage. Then there are the exchange fees to talk about. You are oversimplifying.

salmonik•about 2 hours ago

I am pretty sure he's talking about the TrumpCoin.

thelastgallon•about 1 hour ago

> A market, she says, is a price discovery mechanism for goods and services whose value comes from outside the market itself. The price of wheat reflects something about the world. The price of a share in a public company reflects expectations about real cash flows. The price of an interest rate future reflects collective views about real monetary conditions. In every case the market is a measuring instrument for an underlying reality, and the participants take positions on that reality.

> The price of Bitcoin measures only the price of Bitcoin.

keiferski•about 1 hour ago

It is really striking how technologists keep disregarding any aspect of ethics, philosophy, proper usage, etc. and just focus entirely on the technology itself. Cryptocurrency, AI, social media, on and on.

I used to think it was merely an innocent ignorance, just a soft subject that technologists weren’t familiar with. But anymore it seems like actively hostile to me, a kind of blind belief in the idea that technological problems will just be magically solved by adding more technology.

titanomachy•about 2 hours ago

> At no point in this pipeline does Mike's capital touch productive enterprise.

This is an interesting economic/philosophical angle. What is the logical conclusion of this? What happens as a higher fraction of people deploy their capital in zero-sum games? Is "deployment" even the right framing? A bet doesn't necessarily "tie up" capital in the same way as a real investment (you could place your bet moments before it's settled). Buying crypto does tie up capital, sort of, although in theory you could invest crypto-denominated assets into something productive.

My capital is in real estate and (mostly US tech) company equity. Is society actually better off because I put my capital there instead of letting it sit in a bank account or crypto wallet?

blenklo•about 2 hours ago

Buying crypto actually 'doubles' money by increasing risk:

You buy crypto and give out fiat. Now you have apparently 1 crypto worth 1 fiat and someone else now has 1 fiat.

ForHackernews•about 2 hours ago

The logical conclusion is it should be taxed as gambling, not investing. Some countries like India have already gotten this one right.

zeafoamrun•about 1 hour ago

> "A platform that the federal regulatory apparatus has agreed to treat as adjacent to a derivatives market listed, ran, settled, and paid out a binary contract on the eschatological return of the Christian messiah."

How is this not the coolest shit ever?

thomashabets2•about 1 hour ago

1. A looong skim before it's revealed which type of "crypto" this is about. Because quantum computers, real crypto is also having a challenging year.

2. 2026? Cryptocurrency was always just hell. Well, before it was hell it was LARP.

SonOfLilit•about 2 hours ago

I wish I could just read the prompt rather then the very long article full of tiny mistakes that was generated from it.

estetlinus•about 1 hour ago

> gold carries a floor of industrial demand

I can’t help but think Bitcoin carries a floor for criminal activity. It will always be valuable.

coreyh14444•about 2 hours ago

Has been since 2017 IMO...

kriro•about 2 hours ago

The fun ahead will probably be capable LLMs + smart contracts. There are probably a lot of issues that can be discovered.

blenklo•about 2 hours ago

I don't think so as smart contracts have huge issues unsolved.

It also doesn't solve a problem we haven already solved; If i buy something, companies are quite aware how this default contract works and what are up and downside of doing business with someone.

In smart contracts you remove the trust these people build and now come up with another mechanism. The latest i'm aware of is blocking capital from both sides until transaction is done. This binds a lot more capital on both sides which might be a huge problem for a small company vs. a big one, it could alos kill one party if the other party never accepts any resolution.

A current LLM with a credit card an already just buy something and everything in the background works as it has for a long time.

pjc50•about 1 hour ago

Fun for the first person that prompt injects their way to a billion dollars, I suppose?

kriro•33 minutes ago

Yeah just to clarify, I meant there are probably a lot of issues in existing smart contracts that can be discovered with Mythos style LLMs. And given how many exist and are fairly blindly trusted (who ever reads the audit reports) this could be a pretty epic meltdown spiral that gets triggers.

pjc50•about 2 hours ago

> The public's trust in markets is finite. Every dollar lost on a self-referential game labeled a market consumes a small piece of that finite trust, and the consumption over fifteen years has been considerable

Yes, and not just in crypto. People have started to view a high-trust society like a rainforest: a natural resource that has lots of life-sustaining positive externalities, but you can just burn it down to make a quick buck instead. This has been bad since the GFC, and accelerated by the modern rightwing influence sphere.

There's a very real tendency to people to go "I don't trust mainstream source <X> for <slightly valid reason in one case>", and then immediately jump to totally trusting some random youtube or tiktok conspiracy theorist.

shoelessone•about 2 hours ago

> People have started to view a high-trust society like a rainforest: a natural resource that has lots of life-sustaining positive externalities, but you can just burn it down to make a quick buck instead.

I've never read this analogy before but it really works for me. Thanks!

foobarbecue•about 1 hour ago

Contains unwarned spoilers for The Good Place.

polnurfer•about 1 hour ago

I’d rather bitcoin than rupee

sfjailbird•about 1 hour ago

> Each one, taken alone, would have been a bleak, dystopian fever dream ripped from the pages of a William Gibson cyberpunk novel.

Gibson isn't really that kind of dystopian. And the Good Place reference makes no sense. The article reads like those old Time Magazine pieces by some baby boomer breathlessly trying to scare other old people.

rvz•about 2 hours ago

I think we have a clear idea on what sort of crypto is useful (stablecoins) and which ones are not (memecoins, Bitcoin).

As we have seen with Stripe [0], Shopify [1], PayPal [2] and many others have all figured out its utility is in stablecoins like USDC, which you can send them worldwide, same day, 24/7 in seconds close to $0 with no room for speculation and pay for things and soon agents will do the same. [3]

We get that the author is still upset about Cardano ruining his own crypto startup (Adjoint Inc.) in 2017, but I think we are way past the "crypto is scam" chantings and the companies that I mentioned would agree.

[0] https://stripe.com/en-es/payment-method/stablecoins-and-cryp...

[1] https://www.shopify.com/news/stablecoins-on-shopify

[2] https://www.paypal.com/us/digital-wallet/manage-money/crypto...

[3] https://tempo.xyz/

yfontana•36 minutes ago

I bet the first failure of a large stablecoin will be fun (for external onlookers at least).

blenklo•about 2 hours ago

Only virtual fiat is useful everything is garbage.

The stable coins in question are absolut idiotic. You can't just have billions and trillions of dollars/euros/fiat in some bank and not do anything with it while everyone else is using your stable coins.

It motivates these companes to invest the fiat they have to hold, which adds risk which wasn't there before.

Just make it a real digital fiat from central banks.

But than what did you win? Instead of having your banking ssystem in place with certifications, bank licenses etc. you have nothing to replace it with just bare digital fiat.

Smart contracts don't work.

Now what? a new whole parallel ecosystem? For what?

rob74•about 2 hours ago

> Each one, taken alone, would have been a bleak, dystopian fever dream ripped from the pages of a William Gibson cyberpunk novel.

Or rather, a totally outrageous parody of a William Gibson cyberpunk novel. If this wasn't real, I probably couldn't stop laughing about it. But unfortunately, it is...

PaulHoule•about 2 hours ago

The weird thing about it to me is that it lumbers on. There was that time I’d dread going to parties because that crypto guy was there. That time Bloomberg got its best writer to write a whole issue of Businessweek about it a week before the SBF fraud broke. Then there was that weird time between when crypro brown jumped on the AI bandwagon before Ezra Klein did.

And now the crypto bros are still talking… to each other. Still looking at the price of Bitcoin obsessively. And the rest of us hardly ever hear about it.

sfjailbird•about 1 hour ago

> The weird thing about it to me is that it lumbers on.

Perhaps it is actually useful to some people.

blenklo•about 2 hours ago

And they repeat the same wrong garbage.

At least the pressure on the financial market, GPU shortage through AI, AI we have a realistic chance that crashes more and more.

epolanski•about 2 hours ago

We definitely live in depressing times where all decency has long been lost.

Just yesterday the US president has Tweeted the he "loves bombing the shit out of Iran".

The language is disgusting, what's happening is disgusting, from prediction markets and their disgusting shills/cultists trying to sell you that price discovery has positive social impact, politicians and administrations blatantly involved in scams and corruption, the US threatening its allies, civil liberties and privacy more and more dying around the world, the US kidnapping foreign leaders and half the world clapping and pretending it's not happening.

Every day there's more animosity, nationalism, protectionism, people blaming globalism ignoring the huge benefits and prosperity it brought, computer algorithms (AI) quickly eroding the only positive and creative edge humans really had.

It's just sad to see the state of the affairs and the increasingly selfish direction the world is taking.

d--b•about 2 hours ago

> The price of a meme coin reflects only the collective belief of meme coin holders that they will be able to sell to a greater fool

Author is at times a little too emphatic, but he has some sentences like this one that are really efficient in conveying the idea.

broodbucket•about 2 hours ago

Really wish we could go back to saying "cryptocurrency", it is incredibly depressing that the world has decided that "cryptocurrency" is more relevant than "cryptography"...

pb8226•about 2 hours ago

cryptocurrency is too long for the people using it for marketing

ForHackernews•about 2 hours ago

100% @dang can we edit these sort of titles for clarity?

Cryptography came first and has millions of practical applications, and will only become more frequent fodder for discussion as quantum computing advances. If any discipline deserves claim to "crypto" it's -graphy.

(I'd also accept cryptozoology as the one true 'crypto')

retired•about 2 hours ago

The global stock market has been outperforming Bitcoin for a while now.

testfrequency•about 2 hours ago

It’s always been bad. Crypto people have always been scum. Institutions only caved after being convinced it was the next commodity wave, and they wanted to be prepared.

Don’t even get me started on all the tax fraud they committed. They all got away with it, and continue to.

edit: found the tax evaders!