Just wanted to comment that sol's post is not in any way speculative or conspiracy-theory oriented. We have definitely seen several new brand new users pop up, post one time about their scam ico / pump-and-dump "shitcoin" (linking to their blog that's similarly singularly focused in their signature), and then promptly disappear forever after the mods removed it. I have flagged one or two for the mods to look at myself.
That makes me feel a little better about the savage welcome.
Cryptocurrencies are absolutely in the wild west, and it will be very hard for them to climb out of that untrusted state. It seems every single week (if not day) you hear about yet another ICO scam, a new exchange exit scam / "getting hacked", a new coin-mining malware / unethical websites using your browser to mine without telling you / people using university / government / corporate computers to mine for them (illegally / unethically). Add on top of that the regular old giant speculative bubbles where regular Joes get tricked into "investing" at the top due to the FOMO, possible (probable?) regular old fraud that's underwriting maybe a third of the crytpo market from Tether, the correct fact that cryptos are in fact used to a large degree for purposes that would otherwise be illegal / unethical, and the difficulty of convincing people that an asset that has no fundamentals or revenue stream or traditional value proposition is an "investment".
Agreed the ICO scamcoin phenomenon is in desperate need of regulation, it's a black eye on the crypto community.
Agreed the FOMO speculator aspect is a problem, as is the periodic bubble cycle it drives. People have and will get burnt. Users whose only goal is to resell later at a profit provide no value to the network and take away from the entire point of the technology and interfere with its adoption.
The malware issue is separate. I was a victim-witness in a federal trial when a computer of mine was hacked. It was used as part of a botnet for an ad click scheme that stole a staggering amount of money. The issue with distributed mining malware is with computer security.
Tether may or may not be fraud, I cannot verify so I do not use it. There's what, 2bln tether? The crytpo market cap is ~450bln right now. I have not done research to determine the overall price shift that would occur if tether were to be fraudulent. The exchanges make so much money that there is a non-zero chance that it's actually backed by USDs.
The illicit activity topic I cannot verify or deny without data. I'm a tax paying law abiding citizen and do not use crypto for illicit activity. Nearly all forms of money are used for criminal purposes.
I don't know if the proper solution is just to stop talking about it whatsoever, I actually probably agree that cryptocurrencies are here to stay and will have some sort of very-long-term value proposition. But at some point just throwing the "do your own research" and "don't invest more than you're willing to lose" and "well you should have known not to store your money on an exchange" buzzwords around is not sufficient, and will make people suspicious of your ulterior motives. Cryptos are burning through public trust very quickly right now. There has never been a more clear argument *for* financial regulations that I've ever seen.
Agreed regulation is sorely needed.
All right, I've got an honest question for you surf
As I proofread this post and review yours to make sure I responded to the important ideas you raised, it occurs to me that I may be Charlie Brown with the football here, and your entire post may have actually been an elaborate dismissal. Fingers crossed!
It wasn't, it was an honest question, although I'm obviously fairly sceptical of the current state of cryptos.
I'm grateful, thank you.
If I may summarize your response, you believe that Bitcoin will be the long-term winner because the momentum of the large current user / merchant / developer base will allow it to react and evolve faster than anything else could grow. You may be right but I actually hope you're not. Bitcoin seems to be one of the worst cryptos in regard to energy requirements for mining, and I don't agree that mining will become less valuable if Bitcoin continues to be king. That adds up to a terrible waste of energy just because people are unwilling to move to a better solution.
Yes, cautiously. Its fundamentals are sound and being the largest means the most utility offered. I don't think it will react faster, but it is upgradeable and many desirable features are in development. It just has to evolve those features the community desires before they leave for a different blockchain.
Owning a cryptocurrency is kind of like owning a telephone. You don't have to make calls on it every day to derive utility. The fact that you are available to make or receive calls(in this case send or receive funds) contributes value to the network. If you're the only one with the phone, it's useless. If much of the world has it(or at least entities you want to , it's valuable.
The energy use is an issue yes. The amount of miners competing for rewards is likely outpacing the adoption rate.
However, scaling the network to more users is not linked to the amount of mining power required to verify the network. Also since electricity is an operating cost the miners are incentivized to use renewables because they are cheaper.
I too hope a more energy efficient, yet still secure, algorithm gains traction.
I meant to mention it earlier but I found your comparison to Linux interesting. I think it's probably a fair comparison, but not in the favourable way you meant it. I think an individual cryptocurrency is probably comparable to an individual Linux distribution, not to the whole Linux ecosystem. Linux distributions come and go and gain and lose popularity all the time. And yes, there are some big players who stay relevant for a long time. But there are no guarantees, and since everything in the Linux world is open source and freely available there is nothing to prevent some upstart from creating their own distribution that does something better and convincing a huge portion of the userbase to switch. It's a safe bet that Linux as an operating system will stay relevant forever. Any individual distribution not so much.
That is an excellent point.
Corporations like facebook are very good at creating profit, but vulnerable to being overtaken by competitors(RIP myspace). Open source distributions like Linux are very good at offering value to the userbase, and often fold would-be competitors into their community, but generate little profit. As a result they are more resilient.
The overlap here is that the fiscal value of a blockchain network is directly linked to the utility value offered to the user base. Basically, a linux-style approach may yield the highest utility product, which is also the highest fiscal value product. In this instance there is no corporation to pay profits to, so anyone who participates in the network benefits from the increased value, until it reaches equilibrium. Whether equilibrium is 0 users or millions will decide the fiscal value.
The reason scamcoins are valueless is A) noone uses them(metcalfe's) and B) they rarely do anything better than the established blockchains.
Agree completely that any one distribution/coin may or may not be relevant on a long time frame.
Bitcoin "distribution" variants come as hard forks, where an owner of 1btc receives 1 of the new version of the bitcoin open source, if it becomes successful. Thus by holding bitcoin you obtain all future versions.
This is NOT the case for non-btc competing blockchain technologies, which makes paying attention to the top market players important. If one offers better value, and you hold $5k of bitcoin, you can sell it for $5k of Coin X if its long term prospects are higher. This requires research and vigilance.
