Cryptocurrency Is an Abject Disaster

I work for a large provider in the VCS&#x2F;CI space. While I appreciate the varied opinions in the comments here on the perceived usefulness of Crypto, I think folks outside of the space simply do not understand how much time is being spent combating the issue.<p>If we, for example, had a team of 20 working on our CI offering, we would have re-allocated at least 50% of them to work full-time on combating the miners. And this trend is not slowing, it is only accelerating.<p>One week, we may have a breakthrough and find some common heuristic in running binaries that identify _this weeks_ miners, but next week they will have figured out that we have figured it out and make the requisite changes. It&#x27;s something akin to the early days of anti-virus software, but given the 2021 scale of the internet, the iterations are moving at warp speed in comparison.<p>If you care nothing of the environmental impact (IMO you should), then take a second and ask yourself what your life as a creator of _things_ be like with no free access to CI tooling? I guaranty you that changes to the free tier of ALL CI services are on the way, and I heavily suspect that when that happens, the miners will take over any service offering paid CI where the return outweighs the price. This will lead to an escalation of pricing such that side-project, FOSS, and anything less than large profitable software will be priced out of hosted CI and be forced into a different model.<p>Stake: No crypto stake of any kind

&gt; Cryptocurrency is one of the worst inventions of the 21st century. I am ashamed to share an industry with this exploitative grift. It has failed to be a useful currency, invented a new class of internet abuse, further enriched the rich, wasted staggering amounts of electricity, hastened climate change, ruined hundreds of otherwise promising projects, provided a climate for hundreds of scams to flourish, created shortages and price hikes for consumer hardware, and injected perverse incentives into technology everywhere. Fuck cryptocurrency.

The most alarming thing to me is how effective cryptocurrencies are in drawing out the inner greed of most people. It&#x27;s created an obsession of quick wealth among a lot of otherwise normal people, hijacking their rationality and further propagating the viral nature of it. If you take a look at many of the online communities for cryptocurrencies online you&#x27;ll notice a lot of disturbing behavior that&#x27;s very cult-like.<p>I&#x27;m not even sure why there&#x27;s still a pretense of innovation behind most coins these days - every time I hear or see any new fad of cryptocurrency I can already smell the greed from miles away, and the smell is unbearably intense. More recently there&#x27;s been lots of obvious scams going around social media where bad actors are hacking accounts and replacing them with content shilling their coins and scamming people into sending them coins. When this shit starts invading your personal feeds you know things have started to get really bad.

Cryptocurrency is not an abject disaster.<p>Drew is right that proof of work mining is expensive and has serious negative externalities.<p>Drew is also right that cryptocurrency, via its growth, hype, and decentralized and self-sovereign nature, is often an ideal vehicle for certain kinds of criminal activity, including pump-and-dump fraud or ransomware.<p>Drew is right (perhaps indirectly) that many or most well-meaning crypto projects will end up losing money for most of their investors.<p>But, there&#x27;s a lot more going on in crypto. At this point, if you think crypto is wholesale a scam, bad for the world, or a fad, you&#x27;re simply misinformed.<p>As Drew observes, Bitcoin has a cost problem. For that reason, many crypto insiders think that BTC&#x27;s reign as the #1 top crypto will come to an end within a few years.<p>More reading on Bitcoin&#x27;s cost problem <a href="https:&#x2F;&#x2F;twitter.com&#x2F;RyanBerckmans&#x2F;status&#x2F;1386505715938775044" rel="nofollow">https:&#x2F;&#x2F;twitter.com&#x2F;RyanBerckmans&#x2F;status&#x2F;1386505715938775044</a><p>In contrast to Bitcoin, the Ethereum community is actually building many useful things and will soon stop proof of work mining, replacing it with proof of stake. As a result, Ethereum earns enough actual revenue that ETH is expected to generate lots of cash, like a Buffet stock, in the coming decade.<p>Today, much of Ethereum&#x27;s revenue is what we may call &quot;reflexive&quot; or insular, in that the revenue is related to cryptocurrency services or speculation. That might make Ethereum&#x27;s apps appear to be &quot;not useful&quot; or &quot;scams&quot;. However, I think it&#x27;d be a mistake to conclude that just because most early Ethereum apps are related to crypto, that they&#x27;ll all be. Ethereum apps are increasingly connecting with the regular economy, and that&#x27;s the primary growth opportunity.<p>Further reading on Ethereum&#x27;s cash flow <a href="https:&#x2F;&#x2F;ethereumcashflow.com" rel="nofollow">https:&#x2F;&#x2F;ethereumcashflow.com</a><p>Disclosure: I hold ETH and no BTC, and am the author of both links.

I think there is a place for crypto, and I say that begrudgingly, ‘cuz ego, since I’ve been calling it all Tulips since a Bitcoin was $8.<p>The biggest reason why Bitcoin works, and other established coins work, is because of demand from the developing world. If you don’t have reliable banks or governments then Cryptos are at least as good or better than your local banks because even if it collapses you can still access it. For a lot of countries with unstable governments and banking system this is the differentiator. Bitcoin will never be a “currency” but a long-term “store of value” seems quite likely.<p>It’s pretty clear to me now, long term, Musk knows&#x2F;thinks that the energy used by the coins’ networks will be free from renewable sources.<p>I don’t think cryptocurrency is an abject disaster. I think it’s something with a lot of potential to do good and a lot of potential to do bad. I can agree we’re just gonna have to wait to see...

It&#x27;s really unfortunate that rent-seekers (may have) ruined blockchain as a technology. The fundamental problem IMO is that the most useful applications have no speculative potential, and structuring blockchain applications in a way that creates speculative potential seems to inherently reduce their usefulness.<p>Decentralized currency on the blockchain? Great! But a currency&#x27;s much more useful if its value is stable, so if you want to maximize its usefulness (assuming you don&#x27;t want to tie its value to an existing currency, as existing &quot;stablecoins&quot; do) you probably need a mechanism to increase or decrease the money supply in response to changes in demand. Poof, there goes the speculative potential.<p>Or consider another potential use case that I&#x27;ve thought about a lot, raising funding for co-ops: it&#x27;s hard for a startup to raise capital without issuing equity, and decentralizing that process could create realistic alternatives to the stock corporation ownership structure for big nonfinancial organizations. Or similarly, as an example that might be more familiar or important to folks on HN, it would make a lot of sense as a decentralized funding mechanism for FOSS development. (Yes, there have been attempts to do this, which I won&#x27;t link here.) But no one&#x27;s content to just build a protocol that lets people put (say) ETH in a pot to fund business investment or software features and then let others claim that ETH in exchange for implementing the stuff. No, you have to create your own DecentralizedFundingToken with a structure that&#x27;s contrived to create speculative potential to reward &quot;early adopters&quot; and then do an ICO.<p>I currently own no cryptocurrencies. I owned &lt;$10k in Bitcoin between 2011 and ~2014 (no, not at mtgox).

It&#x27;s in it&#x27;s infancy. In two decades we will know what it means to us as mankind.<p>Cars were also dangerous, unregulated, expensive and excessively polluting. It got a lot better on all these points, and not all due to the cars: some of it was a mind shift that mankind had to make.<p>Same will hold true for cryptocurrency.

On top of all this, it could be macro-economically destabilizing and lead to disastrous results. Even Douglas Adams tried to warn us 40 years ago: <a href="https:&#x2F;&#x2F;benoitessiambre.com&#x2F;specter.html" rel="nofollow">https:&#x2F;&#x2F;benoitessiambre.com&#x2F;specter.html</a>

This is really a complaint against Proof of Work based consensus protocols.<p>&quot;Cryptocurrency&quot; is also kind of a dumb term. Everyone seems to still think this is about creating new currencies. Really we are talking about <i>tokens</i> that represent some component of a <i>system</i>. Yes that is general because the base for experimentation with tokens is absurdly vast. God we need to move beyond thinking about Bitcoin! Really this article is saying &quot;Fuck Bitcoin&quot; and well, I&#x27;d agree with that at this point.

&quot;Cryptocurrency is the multilevel marketing of tech&quot;<p>It&#x27;s rare I see such a massive amount of hype, complexity, computation, articles, blather, bullshit, etc deconstructed so powerfully with a simple phrase.

Crypto, gig working, social media, HFT, and ad tech are all symptoms of late-stage capitalism - perfectly neutral technical ideas that are completely unworkable in our current sociopolitical and economic structures.<p>Surely everyone would agree that putting our collective intelligence into 100-year timeframes for lifting all of humanity would be a great boon.. .<p>And yet we&#x27;re stuck in Black Mirror world of fraud, exploitation, misinformation, &quot;eff you, got mine&quot; shenanigans.<p>Really exhausting as someone who grew up with a twinkle in his eye about changing the world through technology.

So it seems Drew is biased here, he is biased because his service is being used by thieves to make money.<p>My tainted opinion: I think the criticisms of Proof-of-Work are totally justified here. There are perverse incentives for &quot;miners&quot; to execute work in the cheapest way they can, whether that is JS miners, bot farms, abuse of free services, hacked AWS accounts, abusing favorable tenancy conditions etc. and even if the miner isn&#x27;t downright stealing, there&#x27;s a good chance they are operating in an environment where the cheapest electricity isn&#x27;t going to be exactly &quot;green&quot; either.<p>Practically all of these mining efforts are not done out of some kind of altruistic, utopian goal of shutting down central bankers, but are simply done to make money.<p>What I think is unfair of Drew is to categorize cryptocurrency as a whole as an abject disaster, when in his own article he writes &quot;attempts at reform, like proof-of-stake, are viciously blocked&quot;. Well proof-of-stake still falls under the cryptocurrency banner, doesn&#x27;t it? Perhaps it&#x27;s better to say that cryptocurrency is facing an identity crisis.<p>My opinions on proof-of-storage: I always expected that the price of these coins would naturally level out because you&#x27;d have to remain competitive with the likes of Backblaze or S3. I don&#x27;t know enough about the incentive structures of Proof-of-Storage coins, but if there are incentives to have empty spinning rust then these are the wrong incentives and I&#x27;d say those protocols are likely broken. Rewards should be heavily slashed if there&#x27;s wasted storage (ie. empty storage), so as to disincentivize miners from over-provisioning hardware (hoarding disks).<p>Disclosure:<p>I&#x27;m currently holding roughly a pay check each of Harmony ONE and Polkadot and have a small, locked stake in ETH2. All of these projects are Proof-of-Stake.<p>I also own pocket change amounts of Stellar Lumens which are used between myself and a friend to keep track of who&#x27;s paid for lunch. As I understand it, the Stellar consensus protocol is not computationally intensive when compared to Proof-of-Work.

I respect his opinion (especially if his biggest exposure to it was through CI abuse to mine Monero and other CPU-based PoW crypto, I won&#x27;t even deny that&#x27;s an extremely shitty situation many service providers have had to deal with these past months more than ever), even if I disagree with it.<p>It&#x27;s not difficult to be negative on crypto when it personally brings you nothing but grief. Our point of views are unequivocally tainted by our personal experiences; I&#x27;m sure had I been born in a reasonably free country, with competent social structures and the means to actually own the fruits of my labor, I&#x27;d probably hold a different view on the entire ecosystem: I&#x27;d see nothing but grifters and scammers polluting the planet while taking advantage of gullible fools.<p>And as the article says, I&#x27;ll disclose my stake (Even if I see it as pretty spiteful): I sold off the majority of BTC I had when it touched $60k but most of it is in stablecoins, so I&#x27;m still part of the ecosystem. A considerable part of my net worth is in cryptocurrency I&#x27;ve been slowly accruing over the years, converting however much I could save up in local currency to a minority in cold hard cash and the rest in crypto, and it wouldn&#x27;t have been possible for me to save up otherwise. Yes, I am in one of those so-called &quot;isolated examples of failed national economies&quot; that maybe aren&#x27;t nearly as isolated nor as uncommon as he seems to allude to.

I generally agree. I do have a question, though. Would it be this bad without the marketplaces? I had a sliver of hope for a small period of time that bitcoin would truly replace fiat currencies. And that ethereum could replace law. Both have failed to achieve their goal. Is it society’s fault or has the tech always been pointless? Are there meatspace things society could do like e.g. ban using dirty energy for mining, ban proof of work, some [thing] about regulating exchanges, etc.?

Keep in mind that this is not an objective take, fraud is destroying his business.<p>He’s conflating all crypto with PoW based systems. A more accurate title would be &quot;Bitcoin is Making My Life Complicated”.

&gt; The industry has been setting up informal working groups to pool knowledge of mitigations, communicate when our platforms are being leveraged against one another, and cumulatively wasting thousands of hours of engineering time implementing measures to deal with this abuse, and responding as attackers find new ways to circumvent them.<p>Does anyone know how to get in contact with these informal working groups?

Cryptocurrency bad -&gt; explains why basically everything related to mining is bad instead of telling us why cryptocurrencies are bad.<p>Should be named mining is a disaster.<p>PS: I have no stakes in anything that requires mining not even gold.

some fair arguments here... but this is exactly the same kind of vibe most people emitted when i went to CS grad school in the early 90s. everyone was like, &#x27;oh msft is so evil. they suck.&#x27; and i just didn&#x27;t understand. in reality msft put compute in front of everyone and created an insane amount of opportunity. this sounds like a &#x27;get off my lawn&#x27; broad attitude and maybe a better approach is to be open to some of the innovation that is getting put down here.

It was obvious to me from the very start. I hope one day it will be a crime and those &quot;miners&quot; would get what they deserve: the prison.

Cryptocurrency is the worst form of currency, except for all the others.

:)

HFSP

Bitcoin falls and anti-crypto headlines rise it’s like bond prices and bond interest rates.

&gt;Cryptocurrency is one of the worst inventions of the 21st century. Clearly this person has never had a problem to get a bank account.

Jfc, while cryptos exacerbate the climate issue, our climate problems are directly and completely a consequence of a bunch of inventions in the 19th and 20th century...<p>Yet burning gasoline like a deranged madman is apparently constitutionally protected in every country.<p>Infrastructure spending is literally dependent on the continued ability of peoples to transport themselves quicker by sacrificing their grandchildren’s future.<p>How did this complete brain fart become policy? It’s far, far more destructive than “cryptos”..

&gt; This rant has been a long time coming and is probably one of the most justified expressions of anger I&#x27;ve written for this blog yet. However, it will probably be the last one.<p>You&#x27;re free to disagree whatever you wish to, but from this to &quot;I&#x27;m ashamed to share an industry&quot;. Hey man, who are you? Then I&#x27;m ashamed to share the web with you. It&#x27;s fine to disagree&#x2F;agree&#x2F;comment, but I&#x27;m little bit triggered of your words.<p>TL;DR: &quot;cryptocurrencies is evil&quot;, but you are not understanding that it&#x27;s not the technology that is evil. Cryptocurrency is a tool, and as a tool, many aspects of it depend on the people that use it. Let&#x27;s then rant about AI (that is used for military scopes, so must be evil!) and IoT (ahh those chips that can not be found!!1111! Crisis!).<p>You&#x27;re not ranting about cryptocurrencies, you&#x27;re ranting about attackers. I would personally remove your last words about &quot;ashamed&quot;.<p>[spoiler: I work with cryptocurrencies, sorry]

&gt; For my part, I held &lt;$10,000 USD worth of Bitcoin prior to 2016, plus small amounts of altcoins.<p>LOL ouch. Selling prior to 2016 must sting. It makes sense that somebody who made this mistake would be bitter.<p>This guys take of:<p>&gt; It has failed to be a useful currency, invented a new class of internet abuse, further enriched the rich, wasted staggering amounts of electricity, hastened climate change, ruined hundreds of otherwise promising projects, provided a climate for hundreds of scams to flourish, created shortages and price hikes for consumer hardware, and injected perverse incentives into technology everywhere.<p>is so bad and off the mark and missing the reality that is it even worth a well-thought reply? This reminds me of people who would shit on the Internet in the 90&#x27;s because of porn and scams and this and that. The Internet had and will always have negative components but it&#x27;s worth fighting for because of all the good. Crypto and decentralization is exactly the same way and in many ways even more important.