In reference to the article's question: "could we turn Community Notes itself into something that's more like an economist algorithm?" My answer would be: no, as soon as you add an economic incentive to a system such as this, you break it, by adding an immediate and direct incentive for abusing and gaming it. FWIW that's why I think the concept of "credible neutrality" applied to money is a fantasy, like a neutral weapon (as soon as it is used it has, by definition, to have taken a side).
I don't think the idea of an "economist algorithm" is to add an economic incentive, but rather to realize that such incentives already exist (of course people want to abuse and game the community notes) and to design a mechanism so that these incentives lead to using the system as intended. (cf. https://xkcd.com/810/ )
The article fails to point out that cryptocurrency has already effectively been banned (or at least delegitimised) in other major economies like China and India, so the US is in some sense just playing catch-up. At this stage, at the national level, cryptocurrency is primarily supported by mafia states like Russia, rogue states like North Korea, micro-states like various Caribbean islands, and otherwise failing states.
I mean, why would any state support crypto, something explicitly designed to bypass state control of money? Only those suffering oppression of their ability to transact, of course.
Crypto was not designed to bypass state but to provide transparency and stability to currency/money. Say you are in Venezuela where your money is constantly devalued and your political power is diminished, every option that you have to survive that doesn't harm people directly should not be considered in high horse moral terms.
Some states have accepted that they are unable to run a trusted currency and used the US dollar instead. Bitcoin seems like a straightforwardly better choice there, since the US Fed can't print bitcoins.
The irony is that Bitcoin was created in direct response to the perceived shortcomings of the traditional financial system (see the message in the genesis block), but since then the traditional financial system has cleaned itself up enormously, while cryptocurrency has had the exact opposite trajectory and is now nothing more than a magnet for actual or latent fraudsters.
Bitcoin addressed at most one issue in finance, without properly tying it to the financial crisis, and since then has reinvented all the others in a massive Chesterton's Fence speedrun. It's been nothing but "oh, so that's why the rules are that way" since then.
I’d say that Bitcoin itself has been operating pretty well, minus the stupid decision to keep the block size cap in the single-digit MBs that has created tx congestion and excessive fee competition (BCH fixed that, thankfully). The problem with cryptocurrency is simply that it’s attracting to frauds, and is dominated by fraud and get-rich-quick gambling/speculation.
It’s attractive to fraud for the same reasons why it’s attractive to people who take issue with legacy finance. Your “account” (wallet) can’t really be shut down or frozen, you can transact quickly and easily with only an internet connection and a phone regardless of borders or capital controls, and the currency itself can be audited and resists inflation. All those things continue to be true, but unfortunately the current largest, visible use case is fraud.
The original use case for Bitcoin was right in the title of the white paper: P2P electronic cash. Unfortunately, that hasn’t taken off, and some governments like the US have done their best to kill it. See the IRS guidance for Bitcoin taxes from 2013 which made it practically impossible to use as cash in a legally compliant way. That was the first, and clearest, regulation of cryptocurrency I’m aware of. All other currencies are treated differently. Only Bitcoin/cryptocurrency was singled out for particularly onerous tax treatment.
You can barter with anything you want, that doesn't make it a currency. In fact, bitcoin has a way harder path to being recognized as a currency explicitly because there is no army to enforce it as a currency. That means it can only really be a currency by consensus, and if walmart and kroger don't take it, good luck making people agree to it being a currency.
Bitcoin does not meet the desires laid out in the whitepaper, not even close. Bitcoin isn't even a currency by it's own standards.
Barter goods also serve a purpose other than as a medium of exchange. And Bitcoin is legal tender in El Salvador (not that I like El Salvador or their Bitcoin law), so it actually is a currency.
At least with barter exchange tends to happen in person so you can figure out if you're being scammed before you hand over your goods. Bitcoin gives you the worst of all worlds by making the exchange completely impersonal while lacking the ability to look your counter-party in the eye. The two are most decidedly not the same.
Nothing stops you from exchanging Bitcoin in person, though, so I’m not sure what’s been lost there. Bitcoin can also use a multi-signature escrow. Many services are set up like this.
Gold and precious stones can also be mediums of exchange. That doesn't make them currency.
A currency has to be widely accepted as a medium of exchange, and it has to have a relatively stable value. Bitcoin fails bitterly at both of these. And experiments with bitcoin payments in the mainstream quickly failed (Steam, Tesla).
Your definition of a currency is incorrect. Many fiat currencies have experienced rapid devaluations (hyperinflation) while still being recognized as currencies. El Salvador has recognized Bitcoin as legal tender, so it also has at least some recognition as a currency. The IRS has not updated its guidance.
CeFi is not a cryptocurrency technology and thus is cannot solve shortcomings of the traditional financial system because it is the traditional financial system.
Noone who is ideologically consistent with the crypto ethos would expect that ideology overrides greed.
What do you believe tradfi has done to clean itself up? Please address how the astonishing amounts of global inflation (which I assume will be in your answer) are a good thing for everyone.
Bitcoin yo-yo’s between hyperinflation and hyperdeflation. Unchecked inflation is a problem. But a currency as volatile as Bitcoin is obviously not the solution.
Bitcoin has neither hyperinflation or hyperdeflation. It does have volatility[0], but has gotten better. It is about as volatile as the British Pound[1].
> Bitcoin has neither hyperinflation or hyperdeflation
Measured against a basket of goods, Bitcoin’s value soars and free falls.
Using a 17th-century definition of inflation, which in modern parlance is called money supply, Bitcoin is simply inflationary, but that definition swap concedes that it is a curiosity, not a currency.
> You are confusing inflation with volatility. Prices may rise and fall without changes in a money supply.
You are confusing inflation and debasement. When price levels rise, it's inflation. Even if the money supply shrinks.
This difference is meaningful because for a currency user, stability in value is more important than stability in the number of imaginary things. In 2008, U.S. dollar broad money supply crashed while central bank money surged. That is less meaningful to a currency user, or even financial market participant, than the amount of goods and services each dollar today buys compared with yesterday and tomorrow.
Note that this is the same Worldcoin that has been going round poor countries scanning people's eyeballs with an orb in exchange for some shady cryptocurrency with the primary objective of making some billionaires richer. See e.g. previous discussions on HN at https://news.ycombinator.com/item?id=28947468 and https://news.ycombinator.com/item?id=28998065 . I thought trying to turn our world into a terrifying dystopia for private profit was scary, but this article trying to sell it as something that is somehow beneficial for humanity is even worse.
I would encourage people who are otherwise deeply cynical of anything crypto (I know I am, and I hate 99% of crypto projects) to not immediately discount Worldcoin and make their own judgements based on the content Worldcoin presents. Much of the hacker news discussion on this project is making claims and assumptions that are factually incorrect or at best, misleading.
Online discussion is already largely broken, and will get much more broken in the coming years without something similar to Worldcoin.
Thirteen years is a very long time in technology. The "problem" with HN is that many of us have been around since the start of cryptocurrency, and have a very deep rather than superficial understanding of the technology. That means we have seen how the cycles work out (start out with something reasonable, e.g. a system for "small casual transactions" in Bitcoin's case, fail to deliver, change promises, fail to deliver, and rinse and repeat, each time with a new generation of greater fools) and understand that each new wave of promises are impossible to deliver for various technical and in some cases non-technical reasons. Unfortunately the current generation of proponents just don't have the depth of experience to understand this, and are blinded by false hope that this is their generation's breakthrough technology, so are doomed to repeat the mistakes of their forebears. FWIW I don't think it'll go to zero or disappear - it satisfies a niche in some human's psyche to try to "get rich quick" with little effort - just like we've had Multi Level Marketing schemes like Mary Kay for decades, and casinos and various forms of gambling for centuries.
It's a long time in technology, but that's just the foundation upon which it's built. The industry it's placing itself alongside to compete with is one of the pillars of society, and as such 13 years is a long time to survive in competition, but also a short time in which to create a defendable position.
It took 20 years to go from the car phone suitcase in Lethal Weapon to the first release iPhone.
By the mid-1990s, tens—if not hundreds—of million of people had mobile phone subscriptions, and those who didn’t clearly understood the tech offered humanity a profoundly new ability: communicate anywhere, all the time.
Looking for a cryptographic solution to this is certainly missing the point - it presupposes cryptocurrency coins and tokens are assets in the traditional sense, which they are not. At best they are like casino tokens - they have no intrinsic value, no legal entitlement to anything, and their use is entirely at the discretion of the issuing casino. That works fine for casinos because everything operates within the casino. The problem is that cryptocurrency wants to go outside the cryptocurrency sphere and into the real world, which is something that it is simply not designed to do. As we have seen, this leads to endless exploits, e.g. VCs and exchanges printing up billions of dollars worth of tokens, claiming they are actual assets (imagine a real casino printing chips with a total face value of $1.6 billion and claiming they had $1.6 billion in assets), convincing retail "investors" to exchange real money for those "assets", and then using that real money to gamble in different casinos.
It's solving a simple and well-defined problem: making sure that whatever tokens you put in the exchange, you can get back out. You may think this is beside the point, but it's exactly what FTX miserably failed to do.
One that seemingly failed to be properly regulated despite doing business in the USA, and where supposedly sophisticated investors seemingly failed to do due diligence.
"Crypto" is being blamed a lot for FTX, but it's starts to feel more like it's a scapegoat at this point.
(And/or an excuse for everyone to just look away from how the sausage is being made while the numbers were going up : see also : the complicated math behind the subprime morgages in the 2008 crisis.)
Surely if those US regulators and those huge investor companies felt incompetent about "crypto", they could just have hired specialists ??
(And it's starting to look that not even this was needed, simply sending your average accountant might have uncovered FTX' lack of... accountability ?!)
Yes, casinos are pretty well regulated in most countries, which is why I wrote "At best they [cryptocurrency coins and tokens] are like casino tokens". Although casinos don't have a spotless record, e.g. US$63 million from the 2016 Bangladesh Bank cyber heist is suspected to have been laundered via casinos in Manilla.
Intrinsic is not the right word to use but the overall point that was made is correct. A $1 U.S. bill has “intrinsic” value that comes from the backing of the United States government and an accompanying set of laws regarding usage.
There are so many red flags in that article, and that article is coming from Sequoia Capital itself. I can't understand how anyone would have invested anything at all in FTX, let alone an astonishing $1.3 billion in Series B and Series C. Does no-one at these VCs do any form of due diligence (e.g. reading the articles on their own web sites), or are they unfathomably incompetent, or living in some alternate reality from the rest of us where everything is reversed (incompetence is competence, war is peace, ignorance is strength, etc.), or is there something else I'm missing?
They likely thought they'd be able to front run any issues. VCs don't invest to build viable businesses, they invest to make money. You can make a lot of money as an insider to a Ponzi scheme.
If you're planning on front-running any issues, I doubt you'd put articles like that (which publicly exhibit an almost pathological lack of self-awareness) on your website.
I was kinda thinking the sell to investors was that only the depositors were going to lose all their money and that suited the equity investors just fine.
A decade of money printing left investors with more money than they knew what to do with, so they threw it at anything related to current thing chasing the next FANG (which by the way, hasn't really happened since the last crash...probably because the startup market is saturated). It was a good thing after the 2008 crash and we needed to revive the economy, but it went on for far far too long and now we have a bunch of overvalued/unprofitable/scam companies.
The corollary to this is that the average citizen is likely to believe that the average billionaire cheated their way into money. The recently passed prop 1 in MA is likely just the start of efforts to tax/regulate the activities of wealthy individuals.
You're missing the point of VC funds. Due diligence doesn't matter, incompetence doesn't matter, reality doesn't matter. What matters is if they can turn their 1 dollar into 2.
Doesn't matter if that requires breaking laws(airbnb) or stealing from naive people(shitcoins) they will do it, full stop. Once you understand that VC funds are literally robber barons who grouped together and gave themselves a new name it all makes a lot more sense.
Investors were offered chunks of FTT token that would vest long before any company liquidity event, in addition to company equity. So they were also buying into a speculative directional bet with faster returns, that they’d almost certainly get to dump on the market when insider info hits their networks. Not sure what the original source is but it was reported by Barron’s today.
This sort of thing is as old as crypto itself - see e.g. "How to steal Bitcoins" with some excellent HN comments (including from one of the thieves referenced in the original article) from 8 years ago: https://news.ycombinator.com/item?id=7365663
