Kind of a shower thought, and far less important than the pragmatic takedowns others have laid here, but another thing that bugs me.
One of the tells that one is talking to a crypto bro is use of the term fiat currency, almost exclusively, when talking about non-crypto currencies. One rarely (I’ve never) heard/read them talk about representative currency (backed by actual physical commodities). There are in fact, some important ways in which they all differ, but the one that drives me nuts is their relationship to, well, entropy.
Commodities, by their nature, are low-entropy. Think gold bullion, or even wood. Or salt. Whatever. Being low entropy, they represent potential—or there’s something innate about them that make them desirable. So, representative currency represents potential, and also “authenticates” it… makes it real. And representative currencies in turn grant liquidity to commodities.
Fiat currency—e.g. the dollar, the euro—don’t have any intrinsic value, so they instead are “made real,” and liquid, by the credit of the government backing them and controlling both their supply and how much it costs to borrow them.
And the physical instruments of exchange of both kinds of currency (cash, coins) are fungible and anonymous. Of course transfers that transit the banking system are traceable, but physical exchanges far less so.
Cryptocurrencies, by contrast, are not only intrinsically and indelibly traceable (yes, there are various tumblers and mixers, but mathematically that’s just obfuscation). But the real kicker is that it’s neither their low entropy / high potential, nor the guarantee of an authority that lends them their authenticity or value. Their value represents effort that has already expended for literally nothing useful other than making a token unforgeable —they’re valuable because of their scarcity measured in past entropy increase. They’re the representative currency of burning tires.
Like I said, inchoate shower rambling, but there’s something about the dependency of crypto upon energy having been converted to waste heat evokes the image of crypt bros selling the opportunity to wrap one’s lips around a tailpipe rolling coal, and I find that a useful visualization to keep in mind.
Yes, I know things are a little different in a proof-of-stake system like post-fork ethereum, but it’s kind of a technicality.
The data sovereignty argument of crypto is also BS; as other posters have said, one literally loses all control of data added to a chain; there are some cases where this property is desired, but it’s not one’s chat messages (Matrix), and god no it’s not one’s medical records. It’s not one’s consent to have sex.
Indelible, immutable public records aren’t sovereignty. They’re the forfeiture of optionality, and most value boils down to optionality in the end.
Kind of a shower thought, and far less important than the pragmatic takedowns others have laid here, but another thing that bugs me.
One of the tells that one is talking to a crypto bro is use of the term fiat currency, almost exclusively, when talking about non-crypto currencies. One rarely (I’ve never) heard/read them talk about representative currency (backed by actual physical commodities). There are in fact, some important ways in which they all differ, but the one that drives me nuts is their relationship to, well, entropy.
Commodities, by their nature, are low-entropy. Think gold bullion, or even wood. Or salt. Whatever. Being low entropy, they represent potential—or there’s something innate about them that make them desirable. So, representative currency represents potential, and also “authenticates” it… makes it real. And representative currencies in turn grant liquidity to commodities.
Fiat currency—e.g. the dollar, the euro—don’t have any intrinsic value, so they instead are “made real,” and liquid, by the credit of the government backing them and controlling both their supply and how much it costs to borrow them.
And the physical instruments of exchange of both kinds of currency (cash, coins) are fungible and anonymous. Of course transfers that transit the banking system are traceable, but physical exchanges far less so.
Cryptocurrencies, by contrast, are not only intrinsically and indelibly traceable (yes, there are various tumblers and mixers, but mathematically that’s just obfuscation). But the real kicker is that it’s neither their low entropy / high potential, nor the guarantee of an authority that lends them their authenticity or value. Their value represents effort that has already expended for literally nothing useful other than making a token unforgeable —they’re valuable because of their scarcity measured in past entropy increase. They’re the representative currency of burning tires.
Like I said, inchoate shower rambling, but there’s something about the dependency of crypto upon energy having been converted to waste heat evokes the image of crypt bros selling the opportunity to wrap one’s lips around a tailpipe rolling coal, and I find that a useful visualization to keep in mind.
Yes, I know things are a little different in a proof-of-stake system like post-fork ethereum, but it’s kind of a technicality.
The data sovereignty argument of crypto is also BS; as other posters have said, one literally loses all control of data added to a chain; there are some cases where this property is desired, but it’s not one’s chat messages (Matrix), and god no it’s not one’s medical records. It’s not one’s consent to have sex.
Indelible, immutable public records aren’t sovereignty. They’re the forfeiture of optionality, and most value boils down to optionality in the end.