I first learned about blockchain years ago talking to some middle eastern clients who had implemented something with it. After looking at the technology from a data & software engineering pov, I thought it was basically useless and incredibly niche. I said as much, but they didnt believe me; they also thought ML was where you "fed data to a machine and it did everything" because that's what some lecturer had told them.
For years I was mostly just confused that "crypto" was anything at all, and latterly it seemed pretty clearly insane. The pitch to replace governement-back currencies with deflationary tokens clearly a fever dream of some political moron. Then it became very clear that it was just a scam: the dream was the hook. And "tokens" fit the collectables mould, in which assets with only ephemeral value to collectors boom in speculative bubbles.
Two years ago a friend wanted to get into the industry, and I said that soon it'll be a black mark on a CV and everyone will be hiding it.
What is interesting is that amongst professional finance much of this has been apparent the whole time. I've spoken to senior people in UK banking and they've confirmed as much. And as much is clear by reading the FT.
What is interesting is how much "elite tech" has captured the elite and silenced professional finance. The Economist article cited above, for example (and on HN the other day), was absurdly pro-crypto giving the scam-sales-pitch verbatim.
Some documentary is no doubt in the works on this, and I can see an Adam-Curtis style one on "how silicon valley beat the financial elites and captured the political imagination of a generation"
Fintech and swinging for the fences is not a bad thing per se. As long as you aren’t an executive for a scam or something; I have never seen in my career experience being treated as a bad thing. Might perhaps get some added questions to get you, but it is also a unique selling point.
Crypto essentially allows you to make trust less systems with tokens, what those tokens mean or not depends on the situation. Writing that off as purely speculative isn’t necessarily fair. Utility tokens are a thing after all.
Black mark is exactly right. I wouldn’t hire someone who spent more than a couple of months at a crypto job — that’s enough time to realize what’s going on and get out. If they stayed longer, it invites the question of whether they’re gullible, incompetent, pathologically greedy, or too good at compartmentalizing.
Do you think “I was an accountant at Enron” is considered positive career experience in that field? Crypto is the equivalent in software engineering.
Are you actually responsible for hiring people? If so, it's quite a narrow-minded and borderline silly take on things. I've been hiring people for the last 8 or so years and if I come across a good engineer, I really don't care what industry they worked in, as long as they are capable, motived and a pleasure to work with.
I think crypto is mostly pointless but I've been working in and out of the sector for nearly 10 years. Why?
1. I have a family to look after and it pays quite well.
2. I get to work on technology which is very interesting and applicable to other domains - consensus alogirithms, security in a highly adversarial environment, peer to peer networking and associated networking alogirthms, the intersection of finance and technology, the intersection of economics and technology.
3. I get to use tools and langauges I enjoy working with.
4. I work with smart, interesting people from a variety of backgrounds.
5. The industry moves fast, so there's always something new to learn.
I get constant inbound from recruiters and no-one cares that I work in crpyto.
I'm responsible for giving hiring input and I've talked to multiple people who are solely responsible, and working in crypto isn't necessarily a dealbreaker, but for me and those people you're definitely competing at a disadvantage from the outset.
Okay, I may be a bit blunt, but to spend any significant time with crypto means that you are either a) illiterate in finance, b) illiterate in technology, c) into scamming people, d) into gambling or e) into illegal things. If a or b, you yourself probably do not realize it. Anyway, any combination of these would constitute black mark in my recruitment process for most of the jobs.
But as soon as there's a conversion to/from fiat or anything else in the real world, you have to trust whatever exchange or vendor you're dealing with. That means it's still a system that requires trust. With cash and banks I can go to the legal system to get issues with trust violation addressed. With crypto, I'm up shit's creek with no recourse when the exchange I used gave my tokens away or my computer was hacked with malware. This is not exactly "better" by any stretch of things. For many people it is turning out to be immensely worse.
When and whether it should be a black mark is separate to whether it will be.
On highly technical roles with a highly technical hiring process, sure, it'll be fine. I think, however, lots now are scrambling to decrypto their image.
Most of the highly technical software engineers I've spoken to have felt similarly. Blockchain is a neat solution to some very niche problems. However, there seems to be a middle ground of perhaps less technical people (the tech bros) who are attracted by the easy money and don't think too deeply about the underlying technical realities.
> I thought it was basically useless and incredibly niche
Quite, I tried on and off for years to imagine a single use case for the real world. Always came up dry because the Blockchain Oracle problem is unsolvable.
> What is interesting is that amongst professional finance much of this has been apparent the whole time.
It is important to note, that even if from looking from far outside, finance looks like one thing, in reality there is a big divide within finance regarding how "value" is defined. On the other hand, there is a simple notion that value of a thing is whatever someone is willing to pay for it. And on the other hand, there is a bit more complex idea that if you somehow know the value of a cash flow, then if you are able to create the same cashflow in some other way, then the other cash flow must have same value.
The first one is the home of powerpoints, VC capital and crypto. (It's also easy to recognize these professional financiers once you start to discuss whether sweat equity should be valued similarly to cash equity. They are completely appalled with the idea, because reasons.)
The second is home of financial regulation, really fancy maths and modern banking risk management.
The failure modes are different here. The first one, typical failure model is scam. The second, well, you can google LTCM for that.
And what comes to crypto, there is a clear and obvious difference. The first ones see no reason why not investing into crypto, after all, someone is paying 60k for a BTC, its value is thus 60k, what more do you want? The second ones scratch their heads. They see no positive net cash flows anywhere, thus the value must be negative. And this is the reason (in addition to regulation) why banks and professional bankers for the most part keep clear from crypto and struggle seeing value, while VC money is/was pouring in.
A world without political control on the money supply is a vastly inferior one to either (1) no control; (2) automated control; or (3) control by gold miners.
(1) leads to great depressions (mass poverty, famine, etc.); (2) leads to feudalism; and (3) to colonialism, war and poverty.
Political control over the money supply is one of the most stabilising, peaceful and moral inventions of the 20th century.
For human history the poor have been destroyed by deflationary currency which was always better to bury than invest (see, for example, Jesus' story of the talents (coins) where he recommends burying rather than investing -- incomprehensible today, but sane with metal currency).
The trans-A slave trade was a more-or-less direct result of the massive inflation of the discovery of gold in the americas which made labour impossible to pay.
People discovering rocks in the ground is no basis on which to design a world-wide political system; and the origin of a vast amount of evil. Comparatively, central banks targeting 2% inflation is an unalloyed good.
No one controls inflation, the only variable under control is the cost for a bank to receive money from a central bank (an interest rate).
Any value of an interest rate is a political tradeoff: a low rate favours spending, a high rate favours saving. So a low rate promotes expansion and an excess of cash in the system; a high rate promotes contraction and a relative deficit of cash. No value for an interest rate is "correct", it is an ethical decision. And the effect of a given rate will depend on economic variables that are basically unmeasurable (eg., aggregate preference for future consumption at a given rate) and have to be determined by best-guess expert judgement.
What would an algorithm do? Who would create it? Who do you think would create it?
My view is that replacing any aspect of politics (, law, etc.) with "algorithms" has a pretty clear line to feudalism or similar. Political judgement should never be naively deterministic in a chaotic, unmeasurable and unmeasured world.
A deterministic "politics" makes its power structure eternal and immutable. Do we change the alg when the world changes? No, that's just status quo. We mean an alg that never changes regardless of the change to the world. It's mad.
I can see where you're going with this. An algorithmic approach without a political fallback can lead to feudalism because the people who control the algorithm, control everything.
This is why I teeter on "end the fed". You need an independent body not influenced by the politics, yet accountable for their performance in the end. I'm not sure they're currently accountable in a manner that matters.
Edit: when I say inflation in this context, I mean monetary inflation. That can be controlled.
Edit 2: I'm not really sure how the current system is that far from feudalism. They are literally talking about putting the plebs out of work so their (feudal overlords) cash isn't made worthless.
If you want to end fed controlled interest rates you would either need to abolish cash and replace it with cheques or introduce a demurrage currency as cash. Cash acts as a perpetual bond with a guaranteed 0% interest rate. If there is deflation then the nominal interest rate needs to be negative so that the real interest rate is correct again. If you can't express negative nominal interest you will have to run away from deflation aka permanently issue more money.
This is pretty much universal, even DAI (algorithmic stablecoin backed via deposited Ethereum, etc) has this problem. When DAI trades above the peg, the only answer is create more DAI and sell.
There is RAI where the answer to RAI being above the peg is to just lower the redemption rate.
The obvious answer then would be to introduce an optional dollar that has an interest rate built into it that can be negative. It doesn't have to replace every existing dollar bill, it just has to exist and in case of austerity or a recession the Fed will try to not increase the number of 0% dollars in circulation. This will make regular dollar bills trade above their face value meaning people are less likely to transact with 0% cash and instead electronic payments and the negative interest dollar will continue doing their job.
The money in Wörgl was named emergency money (Notgeld) for a reason. Fight the depression with a higher velocity of money, not more money.
Any rate a central bank sets has winners and losers, with inflation at 10%, 90% of people are losing.
The fed is being the most "economically reasonable" of almost any central bank in the world right now. The UK central is afraid of matching the Fed because property owners would be screwed, and the UK economy is more dependent on real-estate. This is compounded by Brexit (a project of those property owners) which is driving import inflation that the central bank is also ignoring.
So I, as a pro-EU UK renter, am losing out for the benefit of UK property owners wealth and political projects. I'd still vastly prefer that over whatever you might imagine the alternative is.
A similar story can be told in the reverse direction: any rate is a political decision, and the losers have a story about how they're being oppressed.
The bank of england, fed, etc. are at least aware of the consequences of their decisions and have some level of accountability. Neither of which can be said for any automated system which acts completely ignorant of these matters.
This isnt feudalism, this is politics working the best it has in human history. If you imagine you could do better, I'd suggest that hell is much closer than heaven.
I AM A billionaire! Well not necessarily yet, I only have 4 dollars and 53 cents, though I think it will hit that net worth level at some point in the future.
The law isn't the arbiter of what is moral. History shows that countries enact capital controls. Morally, if I decide this is going against the contract with me and my country, I may choose to "break laws" in order to leave.
Bitcoin solves what is called the double spending problem without a central authority. Any other existing digital cash system, including the present-day fiat currencies and payment infrastructure relying on them as well as other digital currencies, require a central authority to maintain and dictate the true history of a monetary ledger, to make sure that the same units of money are not spent twice. Bitcoin instead decentralizes the bookkeeping and uses a proof-of-work system to maintain consensus between independent bookkeepers about the true history of the ledger.
If someone steals from my bank account I’m getting that money back. Yes I’ve been scammed a couple times and had money withdrawn from an ATM in countries I’ve never been. Within 24 hours my money was back in my BoA checking. All my bank deposits are insured by the FDIC.
Not to mention my $dollars (or even €/£) have not lost a huge amount of value and fluctuated like a rabid dog.
Blockchain doesn’t help at all and most banks keep pretty good records.
Banks have an unpredictable money issuance policy.
While Bitcoin's policy is know for the next 100 years.
That will allow unseen before economic growth for entities going on to the Bitcoin Standard, with proper planning.
After the first pioneers show to the world how it's done, it will become obvious to anyone that Bitcoin is the most advanced money we have as a civilization.
Ok but money has two sides. There are those who have it and those who accept it. What Bitcoin does is effectively provide a very expensive paper ledger but money is a social relationship between humans. There aren't enough people negotiating contracts denominated in Bitcoin. It is a very loose relationship that can be ended at any time.
For years I was mostly just confused that "crypto" was anything at all, and latterly it seemed pretty clearly insane. The pitch to replace governement-back currencies with deflationary tokens clearly a fever dream of some political moron. Then it became very clear that it was just a scam: the dream was the hook. And "tokens" fit the collectables mould, in which assets with only ephemeral value to collectors boom in speculative bubbles.
Two years ago a friend wanted to get into the industry, and I said that soon it'll be a black mark on a CV and everyone will be hiding it.
What is interesting is that amongst professional finance much of this has been apparent the whole time. I've spoken to senior people in UK banking and they've confirmed as much. And as much is clear by reading the FT.
What is interesting is how much "elite tech" has captured the elite and silenced professional finance. The Economist article cited above, for example (and on HN the other day), was absurdly pro-crypto giving the scam-sales-pitch verbatim.
Some documentary is no doubt in the works on this, and I can see an Adam-Curtis style one on "how silicon valley beat the financial elites and captured the political imagination of a generation"