I see Trump held a crypto summit yesterday.
Oh goody, goody.
I’ve been researching crypto, trying vainly to understand it, for some time now. I just did some more research on how safe it is, and can it be stolen. Yes, indeed. “Coins” can be stolen. The exchange registries (how coins are swapped around and their legitimate owners kept on record) have bugs — as Gomer Pile used to say, surprise, surprise, surprise! Apparently known bugs. Also the “hot wallets” as they call them have bugs too.
One called the Bybit hack apparently managed to steal $1.5B — billion — and there was also the BMM Bitcoin hack which walked away with $305 million. These were recent. Probably many others before that. Those are thefts from private individuals. From people. Not from banks with their insurance. The worst kind of theft there is.
And this is what President Trump wants to change the US economy into?
Besides the tremendous further damage to the environment, just one EMP and the entire economy is dust.
(Of course, that’s an assumption. I don’t know where the exchange servers are [hopefully no one does] or how [or *if*] they back them selves up to multiple locations. Locations all around the world? Or not? But still… money that requires a working power grid… Maybe I’m getting old fashioned, but that seems like a really bad idea to me. In my location we just had a major power failure. Lasted hours. In an earthquake zone, how would people pay for goods they need just to survive?)
If it’s to avoid counterfeiting of US dollars, try making a US dollar that’s hard to counterfeit. New Zealand’s money is actually counterfeit proof (or very nearly), unlike the supposedly absolutely safe $100 bill the US released a few years back where counterfeits were picked up hours before its official release. So much for counterfeit proof. Apparently those in the US Treasury don’t get out much.
(But as for any new USA currency bill being safe from counterfeiting, it might be if every merchant was informed of what the new bills actually looked like and how to test them for authenticity. The US does not do this. Can you believe that? [I know it for a fact, yet not sure I can believe it.])
I can think of no other reason for “embracing cryptocurrency.” No rational reasons, at least. Plenty of ill-thought-out ones occur to me and even some conspiracy ones. But a rational, good reason to go there?
Also, I still don’t understand how one uses a bitcoin. Per one source talking about the summit, the US already holds 200,000 bitcoins, approximate value (approximate??? approximate!!??) $17B. Makes each coin worth $85K — approximately. “Excuse me sir, do you have change for an $85,000 coin? I want to buy a magazine.”(1)
But here’s the real kicker (as if the previous isn’t bad enough): if I don’t grok(2) this stuff, where does that leave the average consumer for whom it’s already all magic anyway? The consumer understands cash, somewhat understands debit cards (not completely) and less and less understands banks, and has utterly no command what so ever over that mysterious thing called “the economy.” Even fewer understand computers. That leaves the typical consumer just ripe for scams and ripoffs of his newly minted crypto’s. Without the knowledge of how things work you can not possibly protect yourself from flim-flam operators, snake oil salesmen and other such scum of the Earth.
I have friends and aquaintenaces for whom even a smart phone is incomprehensible. They don’t own one, dont’ want one. I know people without Internet in their homes, who couldn’t care less about any of that stuff. What are they supposed to do when “money” requires the use of a device they neither want nor understand?
A bank gets robbed, and there’s physical goods being hauled away. Guys in masks on cameras. Car chases, cops and FBI agents doing leg work and following a trail. The money itself can be traced when spent. But these crypto coin thefts are all anonymous hacking, done quietly from some basement in a small country far from the site of the theft. Or from Moscow or Beijing. With virtually no international law enforcement available. There’s no one to chase. No chance of recovering the stolen goods.
There is a war on, folks. One being fought through computers. Not often spoken of, but the US, China, Russia, North Korea and others are fighting WW3 right now. It’s a cyber battlefield. Increasing one’s vulnerability to cyber attack at such a time seems like a very silly idea, just in general.
Billions have been stolen in crypto already, and it (like the newest US $100 bill) were supposedly impossible to steal, hack or counterfeit.
Then there’s the seemingly arbitrary value of individual “coins,” where they can be auctioned off and such. Excuse me? That is not money, that’s a commodity. The moment you turn money into a commodity it isn’t money any more. It’s a possession. Money is for exchange of commodities but can not be a commodity in itself.(3)
Like most technological “solutions” just because you can, doesn’t mean you should. In fact, much of present technology needs to be seriously questioned, revised and in many cases finished. (Yes, finished. “Bugs” mean the software isn’t finished. Nothing less than that.)
The environmental damage alone is enough to put the whole subject on hold. Elon Musk (before he “went crazy”) announced a couple years back that his businesses would no longer accept crypto because of the serious damange to the environment “mining” them causes. That is, the unbelievable amount of power necessary to create one so-called coin, with all of that power ending up as heat.
A few year back environment experts came to the conclusion that a rise in Earth’s global average (average, mind!!) temperature of 3 degrees would make life as we know it impossible. No recourse. Since that time, the average temperature has gone up 1.6 degrees. The number of storms of previously unprecedented fury, water shortages, and so on is completely off the charts. Annual death tolls from heat are higher eveyr year than ever before. The 20 hottest years on record just happen to be the last 20 years. Each year in itself the hottest year on record, meaning also hotter than the previous year.
We just don’t have that much margin left, get it? Not the time to be burning more energy with the current technological base.(5) At this time do you really want to switch the economy to something that requires the output of several major nuclear reactors? That’s heat… nothing but heat.(6)
As I said, I’m an experienced technologist and also an amateur futurist (with a real futurist for a close friend), social philosopher (as you may have noticed if you have read many of these postings) and a few other things(4), and I just don’t get it. Even with all the research I do on crypto, it fails to add up.
Admittedly this is my own ignorance. I know (intellectually) that people own crypto-coins and even spend them. And I also know that some crypto companies have gone out of business and some have collapsed owing billions, and other such things.
I can’t help thinking back to the dot net scam in early oughts. Folks back then asked what I thought of dot net and I said, it’s a Ponsy Scheme. They didn’t like that answer so sought other opinions and invested anyway. Then they lost their money, because it was a ponsy scheme! Nothing was backing up the supposed wealth. Just all numbers on a computer somewhere. A big house of cards ready to be blown over, as it was.
Kind of like crypto, no? (Maybe? Maybe not?)
On the flip side, treasury notes (US dollar bills) are not money, either. They are “notes” which is banking slang for an IOU. America hasn’t had money in circulation for many decades now. If they weren’t backed by a major government they’d also be a ponsy scheme. Factor that one, if you can.
Short version: I keep looking up Crypto and asking questions on the Internet and not getting answers to my questions.
The only answer to what crypto really is is this: it’s a commodity traded around by wealthy people, along with Yen, Marks, Rubles and Dollars. It’s not meant to be something you keep in your pocket. President Trump’s scheme for making the USA into a “crypto capital of the world” is probably ever only going to affect the wealthy, as just another socially acceptable Ponsy scheme. Crtypto coins are “valuable” only in how much energy it takes to create one (tremendous amounts of computer power and a very, very long time), so they are relatively rare. Save that with quantum computing coming along that will no longer be the case. Will crypto still have the value it apperas to have today when anyone can make one on his handheld device?
I doubt it.
Folks, what I do know and can absolutely testify to is that computers are not 100% reliable, will never be so, given our current technology base. There will always be bugs in software, even in the hardware, and those bugs will always be exploited, until such people are banned from ever getting near a computer. Period.
This is a good idea? Really?
What am I missing?
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(1) Yes, obviously I’ve never used crypto. As a very long time computer programmer I simply do not trust the concept. But really, how do you spent a coin (one coin) worth $85K? Makes little sense.
(2) Don’t understand “grok”? Time, then, to go read Stranger in a Strange Land by Robert Heinlein. Time was the work grok was in common usage, that’s how popular that book is/was. Also how far our society has sunk now, when reading a book is almost a perverse activity. <Sigh>
(3) Which brings up the fatal flaw in international money markets. You are actually stealing money from innocent bystanders when you trade dollars for rubles or rubles for yen or… this is theft, not investment. Yet it’s sanctioned by “all right thinking people” (yes, that’s a pun…)
(4) You may have some descriptives for me of your own, too. I don’t require you to agree with me, however. (Like Morphius said in the Matrix III, “my beliefs do not require me [to believe what I believe].” But facts are facts, and not matters of opinion. That doesn’t mean I have my facts right or — always a major possibility — complete on any given subject. I expouse these viewpoints based on what I currently know. I’m perfectly willing to junk all my opinions at the drop of a new fact. FACT, I say. It has to be verifiable, of course. Though I will entertain theories, too and thought experiments and what-ifs. That’s the only responsible way to go about it, after all. What are the facts and only then what are the possible what-if’s following those facts?
(5) The current technological base uses tremendous amounts of power. There are different approaches in development that use far less power. Can’t we wait a little bit longer until “mining” these crypto-things is not ruinging the one and only House we all live in?
(6) Even the light from a low power light bulb ends up as heat absorbed into the environment.
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