> The argument presented is very reasonable and requires a rebuttal.
> The other comments on this thread are worthless and just shilling crypto.
Let me try to present a rebuttal which hopefully you will not dismiss as a "shill" for crypto.
To begin, Tether is obviously ridiculous and most people, even in crypto acknowledge this. However, Tether is not precisely an unregulated "central" bank, but rather a semi-regulated private bank. I say semi-regulated, because they do have some oversight (https://www.cnbc.com/2021/02/23/tether-bitfinex-reach-settle...). It also has many competitors such as USDC, Binance USD, DAI, which are comparable in size: https://coinmarketcap.com/view/stablecoin/. USDT is less than half of the stablecoin market by capitalization, but it is over 80% of the daily transaction volume of the stablecoin market.
If we dig a little deeper though, you can see that the daily transaction volume of Tether often exceeds its market cap: https://nomics.com/assets/usdt-tether/history. This suggests that most owners of Tether are only holding it for a short period of time, which make sense given that on centralized exchanges like Binance it many, if not most, markets are denominated in USDT as one half of a trading pair.
So why, if Tether is generally understood by the market to be backed by nothing, and run by dubious individuals, is it still worth something? It's not because people are stupid, but because of a combination of 1. the enormous international demand for cryptocurrency assets, 2. the lack of sufficient "backed" digital dollars to efficiently lubricate the quantity of transactions people want to make and 3. Gresham's Law (https://en.wikipedia.org/wiki/Gresham's_law), which says given two kinds of commodity money, people will spend the less valuable one, and save the more valuable one.
It's honestly a fascinating example of a money forming out of the matrix of exchanges in a barter economy, and yes, it's a dubious product that will likely break its peg and crash to nothing at some point. But because the total market cap is relatively small, there's not really any significant contagion or
"bank run" risk here (BTC lost more than Tether's entire market cap today and mostly people just shrug and say "that's crypto").
The question I want you and all people who say "crypto is a fraud, ponzi scheme, has no value" to ask yourself is "If I'm right, why is there such demand to buy crypto?". Some crypto-critics argue it is because people are stupid and greedy, but to me that's a lazy and elitist answer. My interpretation is that crypto demand is driven by the same forces that cause people to buy condo's in New York City, London, Vancouver, etc. which then sit empty. It's mostly, right now, a combination of inflation and capital flight.
But there is also a growing sector of the crypto-economy which is capable of doing things which are not feasible in traditional finance (e.g. crowd-funding like Gitcoin, anonymous payments like ZCash, or decentralized money like MakerDAO). I don't think current crypto-asset valuations are justified by that sector, but I am hopeful that in the coming years those use cases will grow and will create extraordinary value for the world.
> The question I want you and all people who say "crypto is a fraud, ponzi scheme, has no value" to ask yourself is "If I'm right, why is there such demand to buy crypto?".
There are a few reasons, but the main one is the same reason there was demand for beanie babies.
Yeah, and like I said, that's a lazy answer, because it raises the question "Why, actually, was there demand for beanie babies?" It was actually a really complex and fascinating phenomenon (I recommend https://www.amazon.com/Great-Beanie-Baby-Bubble-Delusion/dp/...) from the early days of the Internet and e-commerce. Likewise with the Tulip Mania and the South Sea Bubble (which people often compare crypto to); they're a lot more complicated than "people are greedy/stupid speculators", and are in fact important moments in the development of modern finance and the joint-stock corporation.
It really isn’t more complicated. People were told beanie babies were investments that would make them money. They were fed stories about people who made a lot of money from beanie babies. They got fomo and bought in, then it inevitably dropped.
Crypto is only more complicated because it also has other groups, like anarchists/libertarians that see crypto as subversive to government, taxes, and regulation. They buy in out of a mistaken philosophical view that it furthers their political ends.
> They were fed stories
> They got fomo and bought in.
But the key factor is that they were they fed stories via a new information medium: The Internet. And the Internet is also where beanie babies could be bought (via ty.com) and resold (via Ebay). An argument could be made that Ebay might not even exist today without the beanie babies phenomenon which gave it early traction.
I'm suggesting that a large part of the phenomenon you're describing as "garbage that exploits people" is caused by the asymmetry of information found in new market technologies, and that as those technologies mature, those asymmetries dissipate. And that many market technologies we today recognize as good and wholesome started had that kind of bubble phenomenon when they first appeared.
The main question that requires answering, I think, is why we let Tether and Bitfinex print a bunch of Tether and buy a bunch of Bitcoin during low volume periods. The Bloomberg report et al and the SEC both suggest that this is happening, constituting clear price manipulation.
Is that not by definition fraud? It's like the US federal reserve printing a bunch of stimulus. At least our central banks are nominally appointed by elected officials, on the basis of a social contract.
Tether and Bitfinex are certainly highly dubious and I would not at all be surprised if what they've done rises to the level of fraud. So far they have remained mostly out of the courts, but there's a wonderful quote by @patio11:
> Bitfinex and its principals have not yet been indicted by the U.S. Attorney for the Southern District of New York, but crucially, not in the same sense that you have not been indicted by the U.S. Attorney for the Southern District of New York.
I definitely am not in any way pro-Tether, and I think the industry/the world would be better off without them. However, I do not think this implies a. that Tether serves no function, b. that their collapse will bring down wider markets or c. that this meaningfully reflects on the ethics of cryptocurrency as a whole.
As far as central banks go, I would love to see the adoption of a central bank digital currency at the Fed, ideally with accounts open to the general public. This would combat the plague of regressive fees at commercial banks, allow future economic stimulus to go directly to spenders, and perhaps even allow people to transfer money over the weekend.
> Given that cryptocurrencies don’t produce anything of material value
I've read this "crypto has no use-case" meme a lot recently, and it's always perplexed me. Crypto is clearly the easiest way to do international payments right now, particularly for countries with restrictive capital controls, like, for example, Argentina (https://www.bloomberg.com/news/articles/2021-08-13/argentina...).
Sometimes this is qualified as "crypto has no use-case except crime", but what obligation do I, a US person, have to follow or respect corrupt Argentinian regulations?
I make international payments regularly using things like Wise (formerly transferwise), and it’s far simpler than any crypto solution, and accepted by everyone.
And yes, I own some crypto and could use it if anyone was willing to take it.
The only case where it is simpler is there there are capital control, and in that case it is being used illegally.
I'm glad you brought up Wise! I love Wise and use it frequently. However, there are some jurisdictions it simply doesn't work for. For example, there is currently no way for a US company to use Wise Business to pay a Brazilian contractor.
This absolutely does not stop you from doing what Wise does under the hood: have bank accounts in two countries and settle using comms rather than the banking system. A message comes in “Alice should now be given x amount from the local account” and a local bank transfer is executed.
Yes, you could do that if the payment volume was high and bidirectional. It doesn't work at all for a company that occasionally has to pay someone in Brazil, but has no revenue or presence in Brazil.
> And yes, I own some crypto and could use it if anyone was willing to take it.
And if you're sending money to Argentinians, they would beg you for it, as otherwise your recipient would just receive a fraction of the USD you send because of the difference between the official rate the government enforce, and the real rate.
Read about Blue Dollar in Argentina and you'll realize you're very mistaken in your idea that Wise is the solution there.
Observe, this is a policy limitation rather than a technological one. These policies can and will change and there can and will be limits to crypto in the country. Unless you can get everyone in the country to accept crypto, you’d still need a way to convert it to local fiat. And everyone in the country will absolutely not accept crypto as the transaction costs are prohibitive.
Wise doesn't send physical dollar bills to Argentina, so your reference doesn't apply. Send money via Wise or any other app, and either spend it from there, or withdraw it in pesos. Nothing is lost, and it's as easy, fast, and cheap to use as any crypto-currency solution.
Once it becomes a serious enough problem for the government, they will just strangle the off-ramps, like it's been done before. So this makes such method of transfer... a temporary hack?
> Once it becomes a serious enough problem for the government, they will just strangle the off-ramps, like it's been done before. So this makes such method of transfer... a temporary hack?
Temporary, if you believe it can be strangled.
Given the lack of success of the Argentinian government with the Blue Dollar, my Bayesian prior is that it won't be temporary!
Also, this makes me wonder. If there is such a massive influx of inbound cryptocurrency transfers, where does the cash for them come from? Surely whoever cashes those transfers out has to sell the cryptocurrency to _someone_? It doesn't sound like it's balanced out by the outbound transfers? Or someone is sitting on a massive pile of fiat and handing it out to hold a massive pile of coins?
Take this thought experiment: imagine you're given the opportunity to purchase a crypto like BTC for say 20 grands per BTC. Even if you don't believe in the business model of crypto, you would jump on the purchase (irreversible being a nice feature) then you'll immediately flip it (liquidate it) on the open market, for a nice profit, right?
Now think about the general case: you pay a bit less than the going price in the rest of the world, to take into account the problem of "where the cash come from" (certainly not a difficulty for a country with as large as Argentina, with multiple land borders and sea ports) and price in the cost of solving this problem. Given the right price, you'll find clients, as every trade needs a counterparty, for a mutually beneficial exchange.
Basically crypto is a way to scale up illegal financial activity? One trader has a way to get money in nobody asks questions about and is able to capitalize that ability.
The laws of Argentina do not matters to us in the US: if some company wants actual dollar bills to distribute them in South America, can prove the source of their funds is trading crypto, and pays for that service, who are we to tell them "no, that's bad, I won't do business with you".
It's a good thing for everyone - including the people in Argentina who get to enjoy the Blue Dollar by receiving more from the remittance.
BTW It's quite frightening to see replies likes yours. Most people here on HN seems to have a blind admiration for governments and laws, with about 0 critical thinking abilities when it comes to policies that are ultimately harmful (for ex, based on what I read here about Wise etc, I'd summarize the default HN position to "let's make our apps obey currency control laws in Argentina, even if it further impoverishes the locals!") until they are ultimately proved pointless (ex: turning back Australia into a prison island to control a virus as contagious as the smallpox... yeah not gonna work, but thanks for demonstrating that)
I'm admittedly very uninformed when it comes to Argentina, but the point is that tracking down the entity that is paying cash for coins cannot be that difficult. Even the most inept governments in the world typically become very efficient when it comes to money.
Some of us have an understanding of physics and have asked the question, if cryptocurrencies are a store of "value" what is the value that they are storing? If you break it down to its most basic unit of measurement the very concept of Proof of Work is that the "value" is entropy in for form of spent compute. That is all it is. The concept of "wastes energy" doesn't begin to cover it, the value is literally the sunk cost of the net energy used to "mint" a coin. Let me ask you a question, what is the value of used energy? There is none, entropy flows in one direction energy once spent, has no value. I can't get energy back from the spent compute, that power used is not producing anything useful other than a hash value on a ledger. Many of us are then anti-crypto because we're simply stating, The Emperor is wearing no clothes or The value of entropy is nothing. The entire thing is a purely speculative market on the cost of entropy, but entropy has no value.
The question of physics is entirely relevant and infrequently discussed. I think your line of questioning leads to some very interesting problem sets that bitcoin in particular was built to address.
bitcoin is by design inefficient, and it could have been efficient by design. the inefficiency model implies the need for large compute resources, which is a form of industrial, technological, and infrastructural prowess and capacity. See smaller and more power-insecure nations banning crypto-mining. Bitcoin only makes sense from an electricity standpoint when you have excess electricity that you would otherwise have no way of using. Hydropower, solar, and virtually all power plants have some excess capacity that they could theoretically convert directly to mining operations, for as long as they had no consumer power demands. The theory behind bitcoins numbers/algos is that the power plant shouldn't have to make a choice between serving customers and running crypto operations, they make the most possible serving customers, and burning excess supply.
Market conditions have temporarily distorted bitcoin mining distribution, but with fewer coins left to mine and a growing understanding of bitcoins algorithmically enforced economics, you will see it banned from everywhere that it does "waste energy", and lots of miners will realize that "stateless" currency depends entirely on industrial surcapacity which is entirely dictated and governed by the state. So a nation's governance structures and ability to adapt to a developing world turn out to be just as critical as the country's ability to supply massive energy demand. The places that are able to do this are typically worth spending money in so it makes sense as a unit of "value".
bitcoin was an attempt to replace gold mining and gold transfers, but it was also an effort to represent something about the miner who mined it. A bitcoin miner had to have lots of cheap energy and the technological capability to run distributed compute efficiently. bitcoin has been narrowing in on global energy surcapacity, and it turns out there isn't any. This will have all kinds of effects on the price of bitcoin, as lots of inefficient players and players in insufficiently developed economies are forced out of the mining pool.
however in places where bitcoin is mined efficiently, one could theoretically use those same bitcoins to purchase either cheap (or even green) electricity, efficient (cool) compute, or whatever else goes along with running massive mining facilities.
> bitcoin was an attempt to replace gold mining and gold transfers
Imagine replacing a valuable material asset with nothing. I get that bitcoin was designed as a hedge against market volatility. But instead of soaring when the traditional market sours it has become a leading indicator of volatility. If you look at the crash of 2020 and the one happening now buttcoin variants preformed poorly almost a month before the market did meanwhile gold is doing what its supposed to.
> however in places where bitcoin is mined efficiently, one could theoretically use those same bitcoins to purchase either cheap (or even green) electricity, efficient (cool) compute, or whatever else goes along with running massive mining facilities
This is stupid, who would burn energy to buy energy? Bitcoin proponents who believe these lies probably also believe in overunity, free energy and perpetual motion.
I love this question, the answer is obviously no. The value of the US dollar is determined by the credit of the issuer, its rate of exchange in conjunction with the value of labor. Just like all fiat. Yes, if any of these fluctuate the "value" of the dollar goes up or down but it still has a value that isn't just the paper its printed on.
Of course you can use SWIFT, at the cost of bank fees, opaque exchange rates and waiting a week. You could also take a briefcase full of cash on a plane.
Whereas with crypto, you get transparent fees/rates, transaction confirmation in minutes, at any time of day, with a permanent cryptographic record of payment, and you don't unnecessarily leak information to the recipient's local tax authorities.
Transparent?! You've no idea what price the recipient will get for crypto sent.
I can hold foreign currency in my bank account (many banks allow this), so sending money in exact amounts internationally is trivial. And £20 isn't opaque or expensive. Much easier than putting a coin order in and then sending that.
Bypassing local law enforcement isn't a feature for me. These systems exist for reasons.
It's "money-laundering-for-good" but it's still money laundering.
There is a reasonable question where allowing money laundering for good would offset the use cases for those with more evil intentions.
My opinion is probably not since most people in Argentina are going to launder a fraction of a BTC at a time, but all that would be offset by the harm from criminal syndicates (drugs, human trafficking, even oppressive governments).
This feels like solving an edge case with a massive potential downside. It would be a shame to have provided a technology that freed the people of Argentina, but at the same time, allowed the narcos to enslave them.
Remittances to Argentinian citizens have nothing to do with capital controls put in place to prevent capital flight and exchange rate arbitrage, which involves money leaving Argentina, the opposite of remittances.
If an American wants to send money to someone in Argentina they have plenty of options that are cheaper and safer than Crypto: Wise, PayPal, Xoom, even Western Union.
If an Argentinian wants to evade capital control laws in their own country crypto may be their best option. Just calling it corrupt, as a foreigner, does not make it legal or ethical.
> Blue Dollar AKA Dolar Blue or unofficial dollar is parallel dollar rate of USD in Argentina. This is the cost of buying and selling a physical dollar bill in a cueva, or clandestine financial house in Buenos Aires. This is the best price you’ll get if you are buying or selling physical bills, and the transaction is done with no involvement of any government-sanctioned or licensed entity (like a bank).
What does exchanging physical dollar bills in Argentina have to do with remittances, or crypto? Many countries have informal or black markets for exchanging currencies, separate from the official exchange rates. That is not the same as remittances unless you are sending envelopes of dollars to someone in Argentina. My comment responds to the claim "Crypto is clearly the easiest way to do international payments right now," which simply isn't true, not even to Argentina.
> What does exchanging physical dollar bills in Argentina have to do with remittances, or crypto?
That, who would have guessed, there are places who'll happily convert the crypto remittances at the Blue rate. So the people you send money to will get more money, while you'll send the same amount, just in a different way.
And the people receiving money, would would guess that, will be happier by receiving more money instead of less :)
This can work without crypto. I haven't sent dollars to Argentina, but I (US citizen) have lived in a country with currency controls and artificial exchange rates. And I pay a freelancer who lives in a SE Asian country with currency controls and and poor official USD exchange rates (i.e. an informal market for dollars). I pay that guy in USD through PayPal or Wise, and he transfers from the USD account to someone who changes to local currency at the street rate (equivalent to Blue Dollar in the country he lives in). The transaction fees are low and the process is fast, almost instant. I could pay him with crypto if he asked, but he hasn't, because it's easier to just transfer USD. He still has to figure out how to convert USD to his currency at the best rate, a problem he would still have if I paid with BTC.
Reading the Blue Dollar web site I noticed that Argentina recently started taxing crypto transactions, which means the government is requiring exchanges to report those transactions, like they already do for USD transactions.
> Reading the Blue Dollar web site I noticed that Argentina recently started taxing crypto transactions, which means the government is requiring exchanges to report those transactions, like they already do for USD transactions
I seriously doubt that people who already use the unofficial exchange rate will use the official exchanges for crypto...
A reply with useful information works better than writing that someone absolutely doesn’t know what they’re talking about, but your comment did spur me to look more into the subject.
Then I'm happy you gained something from our conversation!
I made my initial reply because the amount of disinformation about crypto on HN is frightening.
You may want to incorporate that to your "reading lens" priors when reading dismissive information here: there is a large probability the person has no idea what they are talking about, and is simply repeating something.
And BTW it's not a value judgement, as repeating stuff that's true is good, valuable, and a valid default heuristic for most other topics on HN.
It's the name of the protagonist from science fiction novel Diaspora by Greg Egan, which is where the quote at the top of the README is from.
> In the Truth Mines, though, the tags weren't just references; they included complete statements of the particular definitions, axioms, or theorems the objects represented. The Mines were self-contained: every mathematical result that fleshers and their descendants had ever proven was on display in its entirety. The library's exegesis was helpful-but the truths themselves were all here.
(N.B. We removed that module from the language core since we're trying to make that no_std, but we're adding it back to our utils crate soon: https://github.com/yatima-inc/yatima/issues/70)
But we can't use petgraph for the actual computational lambda-DAG because of performance. For example, one thing we get by using pointers is constant-time insertion and removal of of parent nodes (every node in the graph points to their parent). We actually wrote our own Doubly-Linked-List in Rust (it can be done!) to store pointers to the parents for this reason: https://github.com/yatima-inc/yatima/blob/main/core/src/dll.....
There's also memory concerns, given that the lambda-DAG collects its own garbage, freeing space allocated for nodes when no longer in use, whereas I believe petgraph is just `Vec` internally, which would require shrinking, and that would also be slow.
All this low-level pointer manipulation was, tbh, a huge amount of work, but the end result is a performant lazy lambda-calculus reducer with sharing in a few thousand lines of Rust, which means fast lambdas on wherever WASM runs.
(That said, I'm a little bit concerned about cache misses with all the pointer chasing we do, but I haven't yet gotten around to profiling different Yatima expressions to measure this. Would be a great project for an OSS contributor too, so I'll probably make a GH issue for it!)
"vaporware" is a pretty harsh accusation for a project that has:
- A performant lazy functional runtime with sharing implemented from scratch in Rust
- A dependent type system with substructural types
- Parsing, tooling, a standard library, ability to run on the web via wasm
- Content-addressing and serialization to IPLD so that packages can be shared over IPFS
That's what we claim to do in our README, and that's what we do.
It's true that Yatima doesn't have an effect system yet, nor is it production-ready, but it's a pre-alpha programming language project, what's the standard being applied here?
I would dearly love to make Yatima a usable theorem prover, and Lean has been a huge inspiration particularly regarding syntax. But building a usable theorem prover is a huge project, and at minimum will require substantial work on our theory, on type-inference (which is fairly minimal right now) and on advanced features like quotient types or univalence.
On that point, we've done a little exploration on encoding the Path types from Cubical Type Theory as self-types, and I think there's some promising work to be done there. But I know my limits and while I feel very comfortable building a useful programming language that can do a little bit of basic theorem proving, I know that doing a proper job on a real theorem is going to require larger scale resources.
As far as the link from the Self-Types paper, our theory is similar to their System S, but is not the same. Not 100% sure but I think the main relevant difference here is about Leibniz equality, which iirc allows for saying `a == b` when `a` and `b` are of different types. Yatima's Equal type https://github.com/yatima-inc/introit/blob/main/Equal.ya, implements the more standard homogenous/Martin-Löf equality, but this is just a library, not a language builtin.
We really do need to write an actual paper for Yatima's theory though, especially considering that we've combined the self-types from System S with a variation of Quantitative Types a la Idris 2. Writing that paper is likely step 0 of any Yatima as a theorem prover project, until then we should view Yatima as just an unsound functional programming language with some nice type-level features
https://en.m.wikipedia.org/wiki/Betteridge%27s_law_of_headli...