I really like how this article is written. I'm a big time crypto fan, but the point the author makes about how something being decentralized makes it more difficult to change is so true. This is the reason Ethereum 2 has been in the works for numerous years and is still several years away from being completed.
The carbon footprint you refer to applies only to proof-of-work blockchains. Unfortunately 3 of the largest systems use this (bitcoin, Ethereum, and doge) but an alternative has already been created called proof-of-stake. Nearly every new crypto uses proof-of-stake and Ethereum plans to switch to it. The market seems to approve of this as well as some of the big gainers in market cap use this system.
His use of the word "decrypted" shows at least some lack of understanding. The SSNs were in base64 as I understand it so "decoded" would make sense but as we all know these two concepts are vastly different. He uses the locked analogy but there is no key or lock in this scenario.
How is that any different from Fiat money? Or anything for that matter. It holds no real value beyond the paper it is printed on. It is valuable because we all agree as a society to give it value.
Yes, cryptocurrency is the purest form of fiat currency, which is to say a very weak one. The difference is that almost all other fiat currencies are backed by an organization with real world power: for example, the US dollar is required to pay taxes in one of the largest world economies, which guarantees trillions of dollars in demand, and it’s what the US government uses to pay millions of people and buy all kinds of different things. Other countries currencies follow that pattern to varying degrees which is also why we’ve seen efforts like the Euro to, among other reasons, increase the overall volume.
Cryptocurrencies lack sovereignty and don’t have an alternative source of baseline demand, which is why they’re volatile on a level normally associated with collapsing states — especially if they’re like Bitcoin where the deflationary model encourages everyone not to spend. When anyone can easily set up a functional equivalent, there isn’t much to anchor the valuation. This is why people created things like NFTs to give others a reason to buy their tokens rather than someone else’s but that’s not especially stable until those NFTs are accompanied by legal contracts conveying tangible value.
While I dont completely agree with you, you do make good points. I would argue that Cryptocurrencies lacking sovereignty is what makes it appealing and gives it value for most users. Bitcoin is seen as an inflation hedge for many investors when they see their own government printing money like its post WW1 Germany (Exaggeration). The volatility is definitely an issue for someone looking to invest a serious amount into.
I personally feel that we are still in the very early stages of this tech and I think it will continue to grow.
Most layer 1 Blockchains are trying to replace the existing payment processing systems such as visa. Not replace all of our computing infrastructure (although some are trying to do this such as ICP)
Smart contracts are huge in crypto currency and are likely here to stay. Afaik all of the top 10 crypto currencies by market cap have smart contracts or plan to have them except bitcoin and tether.
They power decentralized apps and defi. Without them then a blockchain doesn't have much utility aside from processing transactions.
Bitcoin‘s scripting is not Turing complete and therefore does not lend itself easily to sophisticated smart contracts. It will probably always be limited to variations on money transfers.
However, Bitcoiners consider this an advantage as this makes it less vulnerable to exploits. And the Lightning Network is quite an exciting development.
I consider the competition between the two networks good as they are exploring different but nonetheless useful niches.
