… the founding ideas are promising, and something I dream of.
Before I start, just a little bit of background on me so you can understand how biased I am (😅): I’m a 16 years old programmer and I won a few crypto hackathon/funding rounds and I made a lot of friends in the field. It allowed me to get quite a bit of ETH/XMR along the way!
I see cryptocurrencies getting a lot of hate, rightly so for the number of scams, shitcoins, NFTs bullshit, “governance”, DAOs and all those often useless & snob terms.
However the founding ideas of decentralisation and freedom with your money are very appealing to me. Smart contracts are really interesting for creating your own banking operation and tokens can represent anything! It’s a world of possibilities to play with, and you get to build something useful for people!
I’d just like to add a bit of nuance tho: I see a lot of apps being built and what’s really making me laugh is the lack of open-source, decentralisation and auditing on privacy. Granted, there is a lot of fake promises, but it’s like everything, you have to find the talented people to follow.
I find it fascinating to build unstoppable, decentralised, user-first apps. I just hope that web3 stays true to its founding principles.
Hope it was interesting, tell me what you think!
EDIT: title+typos+the game is not comfortably played in Act 2
I think the central problem with crypto is that it is a hammer in search of a nail. The founding ideas are great in the realm of ideas, but in the real world it doesn’t really pan out. A currency is only as valuable as the goods you can buy with it. For our most common currency, the USD, the value of an individual dollar is based on its near universal acceptance and its ease of use. The price of the dollar may fluctuate because of speculation (stock traders betting on what the dollar will be worth in the future), but without speculation, the dollar would still be valuable because you can use it to buy almost anything in the world that is for sale.
What is the use case for crypto? Where does using bitcoin or ethereum make more sense than just using USD or Euros? Crypto is secured via the blockchain, but it is not more secure than standard currencies. Quite the contrary - if i make a credit card transaction and the vendor doesn’t send me my goods, I can call my credit card company and dispute the transaction. If I do the same with crypto, I am left high and dry. There are methods like escrow to get around this, but those require the intervention of a third party. At that point, why not just use your credit card?
The only real world advantage that crypto seems to have over other currencies is that it is both difficult to trace and it is digital. To my knowledge, the only time one might need both these qualities is if you are making an illegal online transaction. If the transaction is not illegal, then using a credit card is always better. If the transaction does not need to be online, then using cash is always easier.
Illegal online transactions are a relatively rare use case, and so most people that are buying or selling crypto are doing it to speculate. They don’t believe in crypto as an idea - they dream of buying low and selling high, or mining the coin and selling it for more than the cost of the power to mine it. Because most people are only buying into crypto to sell it later (rather than exchange it for goods), coins have nothing to stabilize their value. It’s pump-and-dump schemes all the way down.
most crypto currencies (excluding Monero) are easier to trace than fiat money since every transaction is public to anyone as long as you know the public key (address)
relying on “Mixer” services require are third party in hope they don’t actually sell you out and most crypto exchanges have kyc implemented by law
great point, which actually helps further my point. Regulations passed over the past 10 years to clamp down on crypto have minimized its effectiveness as a less-traceable currency, which further reduces the cases where cryptocurrencies are better or easier to use than fiat currencies.