Bitcoin is dead says economist – Trustnodes
Bitcoin is dead once again in the eyes of the mainstream media, with the economist asking “Is this the end of crypto?”
“Great personalities, incestuous loans, overnight meltdowns – these are the stuff of classic financial manias, from tulip fever in 17th century Holland to the South Seas bubble in 18th century Britain in going through the American banking crises of the early 1900s,” he says.
From the Great Depression to the Great Recession, the flaws of fiat currency and its requirement to trust intermediaries, who can and will abuse that trust, have continually surfaced, whether in crypto or any other industry.
But you won’t hear such criticism from places like The Economist, although oddly enough, economists today are much more open to crypto than techies.
“When Crypto was young it was so cool…now it’s a way to scam people out of their savings,” a coder told Hacker News.
He only joined in 2019, however, showing this saying that the more a platform is adopted, the lower its common IQ.
Still, better than r/technology, which is actually anti-tech. You see, while economists don’t need to understand technology to understand money, common-IQ techies of course think that how little code they understand is everything.
“People should be free to spend time and money on fusion power, airships, the metaverse, and a whole host of other technologies that might never get good. Crypto is no different” , said the economist.
Some speculate that they speak for the elite and that the elite understand a thing or two, especially when it comes to pretty vital nuances.
Things like clearinghouses, which aren’t the business of the public, but are vital to the operation of fiat.
Or things like the fact that fiat tends to fail and the current fiat system – without any objective anchors – is only 50 years old.
Half a century, and what’s more, it’s exactly the same system in the four corners of the globe. There is not a single country that uses a different type of currency or fiat design.
The complexities from there can only increase in the analysis, but for our purposes suffice it to say that if the fiduciary system fails, we will be there. There will be a plan B, a backup, a transition tool, a global payment and an exchange rail.
Rather than a failure like the mainstream claims with its regurgitation of old tales, when it comes to these pages, we have both a reminder and yet more evidence of the inherent flaw in the current fiat system.
Paper money like the dollar or the euro is very fragile. It is built on blind trust, and that trust is abused regularly as well as periodically.
Some $7 trillion was printed by Federal Reserve banks in 2020-21. The UK has already taken steps to make the common man pay, lowering the capital gains threshold to non-existent while raising taxes on wage slaves.
It is above all an injustice, an inequity, because the richest who have benefited the most from this impression thanks to guaranteed loans without tax at zero percent on their shares are obliged to pay nothing, and even less a proportion higher.
Added to this is regulation, which some claim is the panacea. Yet the key regulation in this case is jail, and Sam Bankman-Fried is far from such a jail.
The regulator can be co-opted, corrupt or biased, and in all these cases what the regulation says is irrelevant because they rely on people, and therefore on trust.
Not on code. Like bitcoin, which rather than dead has arguably been revitalized because the only way to avoid these fiat failures is to expand native crypto systems.
These recent events and the bear remind us that we have not focused enough on this true crypto expansion, although we have spent the past few years building much of the foundation and blueprint for native crypto systems.
While centralized exchanges will continue to play a role, they will hopefully become less and less relevant, especially as second-layer integrations grow.
Notably because centralized exchanges have always been seen as a transition tool. By definition, they too will be disrupted if broader finance is to be brought up to speed on more solid foundations.
In the meantime, we have to deal with fiat and just like when crypto interacts with the physical it causes the problems of the physical world, likewise when it interacts with fiat it causes the problems of the fiat world.
And FTX was as fiat as it could be with a centralized database that Bankman-Fried could manipulate at will.
Not that it’s new, of course. Mt Gox was a 100 times greater challenge from this faulty system. That’s why we built all the challenges. This is why we created stablecoins.
Now, at least some Cryptonians don’t quite need those flawed fiat middlemen anymore.
That in itself is utility or use. A new non-fiat financial system with integrated clearinghouses, an integrated payment system, account maintenance and open source dapps.
This is an area where the saying code is the law actually applies, and it’s an area where a failure would be a cryptographic failure.
There have been hacks, and they are crypto failures. It’s not a perfect system. But we have found workarounds for this hacking problem which seems to have solved it for the most part as there are many applications running which have not been exploited so systems of exploit-free crypto code are possible.
We need to build many more of them and scale them and we need to develop the native crypto universe because the nature of fiat indicates that sooner or later its fundamental flaw, which cannot be fixed or circumvented, will make a mess.
We prefer not to. We live in this fiat system, even though we crypto. If we had the choice, we’d prefer Fiat to be flawless, but that’s what it is and it’s outdated.
So the Hacker News latecomers hopefully understand that for many Cryptonians, the cryptocurrency debate is long over.
We build them instead of debating, that’s why we even partly ignored in these pages many suggestions about regulations, even from the OSCE, because we think they are not relevant for crypto-native systems , and where they apply to the fiat partie, then that is their business.
So the “flaw” being maybe it’s hard to believe that these crypto native systems can top finance because it’s always been done in a certain way and even for us it’s hard to imagine that can be done cryptographically.
Yet the downfall of FTX is in many ways the salvation of many cryptonians who want to see a crypto world.
This proves in its own way that crypto can’t quite be co-opted, not easily anyway. This proves that Cryptonians are still very much in charge.
As such, perhaps now is the time to believe that we can extend these native crypto systems without any trusted intermediaries, that we can build a crypto world.
Even that we have to do, and we do, because we are in the midst of a crack-up boom, and crypto is the only alternative to that.
The elite understands this, which is why family offices are piling up and piling up.
This will not change. The only thing that can change is that the public, who currently owns most crypto, goes and is tricked into giving it freely to those who already have it, and for those who don’t, they are deceived to stay away.
It’s a free choice of course, for both, but perhaps cryptonians need to do a little more to persuade the unsuspecting public that, corny as it sounds, we’re breaking their shackles freeing them from abusive middlemen like FTX or Theranos or Fed.
Rather than taking a beating as if this game of public trust is something new, the crypto space should realize that the FTX type is precisely what we built for.
Not that it will necessarily change anyone’s opinion, except that defi has caused a noticeable change among economists, at least the most mainstream ones, who see freedom in this crypto space.
It’s time to extend that freedom, through the hard work of building these code systems, to the point where we won’t need fiat at all and won’t need to bother with its fundamental flaws .