It’s always a solution in search of a problem. In theory, could there be a useful applications? Maybe? Let’s see. Bitcoin was released in Jan 2009, and fourteen years later all we have is scams and failures. HTML was released in 1991, and fourteen years later we had Google, Amazon, Ebay, geocities, webmail, videos, blogs …
The fundamental moral failing of all this tech is the idea that you can magic something out of nothing. Like I said above, the value of money doesn’t come because a government wills it into being—as is implied by the term “fiat”—it is because governments do stuff that creates value in peoples’ lives. That creates trust in government. When government money fails because governments are bad, the solution is not to replace government money with pixie dust, but to build a better government. And that takes people you can trust. To imagine you can replace trust with code is purely a technocratic fantasy.
Build a nation with crypto and we’ll talk.
Obviously less energy consumption is less bad. But since the economic, moral, and social value of crypto is also negative, it just makes it “marginally less terrible”, not actually good.
Anyway, there’s a better way of reducing crypto power consumption. Stop using it.
I discussed using blockchain for monastic proof of identity with other monks literally a decade ago when I was still at Santi. The problem is, no-one cares about your theoretical tech proof of identity. What matters is trust. They’ll believe someone is ordained because they know someone at the other monastery. There’s no practical problem here, it’s easy to identify scammers, the issue is how do you deal with it. But if I saw a monk who tried to prove their identity with an NFT, I would immediately tell them to leave.
We should be trying to build a world with more trust, where the relationships between people are less transactional, not just giving up on humanity. The whole drive to replace human connection and relationships is based on a collapse of faith in humanity, and a naive belief that we can rebuild using code.
In addition to being a moral and spiritual failure, crypto is always a technical failure, because at the end of the day a human being holds the keys to the kingdom. And in the world of crypto, that human being is a scam artist, a fraudster, and a criminal. Every last one of them. This is not an incidental detail, it follows from the premise. If you build a system based on not trusting other people, the system will end up being run by untrustworthy people.
SBF is not an outlier, he is the norm. Here’s yet another excellent article by Stephen Diehl, who has been the most consistently incisive commentator on this field, with an excellent grasp of the tech, the economics, the history of ponzi schemes, and the human dimension. And I don’t say that because he liked my talk. Or at least, not just because he liked my talk!