astralcodexten.substack.com
I made this a top level post because I think people here might want to discuss it but you can remove it if it doesn't meet your standards.
Edit: removed my opinion of Scott from the body
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Many rationalists support crypto because they consider that it will help to avoid government control to buy nootropics, participate in prediction markets etc. My advice is that instead of supporting crypto it is better to lobby politicians to allow to do these things legally and openly. That may take longer time and be harder to achieve but it will be much better because negative externalities from crypto are too severe and damaging that they cancel all the benefits that crypto could give us.
Many of these things are legal in other countries and they are not as great as many rationalists think. I am in Latvia now; piracetam and phenibut are manufactured by a local pharmaceutical company here, they are not only legal but doctors routinely prescribe them. What I think about them is that their effectiveness is very low. Healthcare professionals consider them as low class antidepresants/anxiolytics. They have very few adverse effects but basically they do very little.
If 50% of antidepressant effect is due to placebo effect, then prescribing something to people with moderate depression/anxiety will have 50% improvement rate. Doctors initially select medicines with less side-effects and switch to more serious antidepresants when they are not effective. It would be good if other countries used them as well but in the big scheme, they matter very little that it is not worth to use crypto to illegally buy them.
Are you for real?
No, I need crypto to move assets out of an authoritarian country, to buy actual illegal drugs and VPN and bulletproof servers, to fund people doing unapproved research and in the extreme case, assassinations. I cannot rely on «lobbying politicians» who can easily score political points with the 95 IQ hoi polloi by throwing them some witches or saying they're «thinking of the children» or some such. No polity is deserving of my trust and vulnerability.
Societies with very well tracked money tend toward tyranny since Spartan times, and tyranny tends toward tracking of money streams; your approach is entirely dependent on trusting democratic procedures, but that is obviously impotent past some points of no return which are easily reached. This clown world logic of «let's force people to do everything in the public sphere instead of running underground, then they will negotiate a better equilibrium» is either naive or just a cynical cover for totalitarianism with extra steps. Likewise for its variations – let's disarm people so they become more active in civil politics and such. Let's prohibit medicine to promote healthy lifestyles while we're at it.
In reality, the absence of privacy, freedom to change one's state, and tools of personal agency such as weapons and means of exchange, reinforces the dominance of incumbent players, by shortening the feedback loop. It takes away the chances of small players to prepare something and come to the table with solid counteroffers, and rewards them for just shutting up and accepting the mainstream position, wherever it originates.
I believe that the emergence of domesticated peoples who can trust the polity is already a massive negative externality of economies of scale and organized state violence, and a dangerous step towards the eusocial attractor. It's incomparably worse than a little crime and some modest waste of electricity.
Talk about ambitions ;-)
Cyber crypto assassinations are something that happens in cyberpunk fiction and anarcho capitalist theory, there is no one documented case IRL of succesful online murder for hire.
To order assassinations, you need close and deep personal connections of the right kind, the opposite of crypto.
"Why are you so sad? Seeing my friend sad breaks my heart so much."
"Billy Bob is messing with your business and causes you so much trouble? Fortunately, I know some guys who know how to deal with such problems. No, I do not need anything, I will do everything for my friend."
...
Few days later, Billy Bob is found swimming in the nearby lake wearing concrete shoes. Everyone lives happily ever after.
Sounds like a market opportunity to me. Why aren’t there Bond-villain type organizations that kill for profit alone? Was RICO that effective?
Any hired killer who actually put themselves up online openly would get immediately arrested, and anybody who googles "hire killer online" will be led to a police honeypot and promptly arrested. Because duhhhh.
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Maybe there are no Bond-villain type organizations? I mean, there are crime syndicates, but they do not need to retail their enforcement capabilities to any random Joe with a bitcoin. They want them for themselves, tightly controlled by their leadership. And those who would retail probably would end up taking an order from LEO and going to jail very soon. It's an inherent contradiction between having wide retail appeal and tight opsec.
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Thanks. I can better understand the mind of crypto supporters.
I am not completely naive and understand that any government can become totalitarian very quickly. The recent pandemic is a prime example – how leaving your home to have a walk in a park suddenly became a punishable offence. And at that time I was in Spain that is known for quite liberal attitudes and yet the police stopped me to check if I really had a receipt from the closest grocery shop to justify my walk outside. I won't even start with vaccine mandates and other restrictions.
I just don't see how crypto can help. I only see that it is even more important to work collectively even now to maintain democratic norms, to allow debate and free choice. Pandemic restrictions were supported by majority of population, so it is not only the problem of politicians turning totalitarian but the lack of understanding and information by the whole population.
The same advice I give to those who already live in countries that are slowly turning totalitarian like Russia. People should be more active in re-establishing democratic norms instead of working on crypto. It was unfortunate that Iranian emigrants are capable of much wider protests abroad than Russian ones.
We had large protests years ago, to no avail. Bluntly, we shouldn't have bothered with protests at all. They are an instrument of negotiation within an already-mature democratic polity where the power has not separated substantially from the populace, and within its Overton window at that. They do not work against an entrenched, well-armed and competent (at this sort of thing) regime, and Russia routinely devolves into a state with such a regime. What we should have bothered with instead are kamikaze drones, and setting siloviki houses and cars on fire, like Ukrainians do with Kremlin appointees. That had worked once – for good or for ill. And crypto would have helped, but for the unwillingness to seriously try – because it's the only reliable means to transfer value untraceably over long distances, that's available to commoners and not just mafia.
I'm still kicking myself about it. Hopefully other people around the world take notes.
@crushedoranges speaks of serious no-nonsense men who don't fiddle around with crypto and, when totalitarianism approaches, take out cash etc. etc. Very cool – in a decade they'll be as weird as crypto enthusiasts if not more. Governments promoting Central Bank Digital Currencies, and nice organizations coordinating deplatforming on Paypal and other centralized platforms, will see to it. And you'll learn, too, that banknotes are unhygienic (do you want to kill granny?!), wasteful, enable criminality and so on; and seeing the cost of resistance and hurdles to financing and lobbying it, it may be that you'll learn to very sensibly repeat this received wisdom.
In my opinion, those serious men with their unwillingness to master even layman-friendly tech are fetishistic LARPers of a bygone era, coelacanths who exist solely at the sufferance of their regime and are unable to mount any organized resistance; as an untraceable means of exchange crypto is strictly superior to cash, allows more freedom, and for anyone with half a brain and serious concern about coercion the implication is clear.
I agree that protests sometimes have very little success or no success at all in near term. However, with time they can change collective minds more effectively than armed resistance. After the WWII many Latvians took the arms and waged guerrilla war against Soviet occupation (fondly remembered as Forest Brothers). They failed and had no impact at all. What changed everything was Gorbachev's glastnost (openness) policy, people were allowed to talk freely and they decided that they don't like the Soviet system anymore. Despite what you read in history books, that was the main reason why the Soviet Union ceased to exist.
Today I learned from my aging mother that during WWII as a small child she was a refugee in camps in Germany. She might remember some details wrong but when the war ended they were let out and they had to decide: stay in Germany or go back to Latvia. She said that they had no information, no understanding about global things and they were afraid to stay in Germany (after all, Germany had started the war), so they decided to return to Latvia. Today it sounds like a monumental mistake considering that Latvia remained occupied by the Soviet Union and how different the post-war development turned to be. This just illustrates that sometimes people make bad choices because genuinely they don't know better.
Ukraine is again a good example of that as well. Areas with greater Russian loyalties are much easier to conquer by Russia. Ukraine is in a bad shape but encroaching totalitarianism is much worse with potentially poor future outcomes. Beliefs that people have in Russia about the west are main reason why this war is happening at all. Protests can nudge people to change their minds better than weapons.
But that ultimately reveals the answer as to why the Soviet Union fell: for one critical moment, the Russians lifted the boot.
Fast-forward 30 years, and now everyone there is clamoring for re-application of said boot.
Not everyone, only people who are misinformed.
The communist party tried to put the lid back and a coop was staged against Gorbachev and army units were sent to the Baltic countries etc. They failed because people were not afraid to talk about it anymore.
I don't know why Russians willingly blinded themselves afterwards. Of course, it was the government that gradually started to control information and played on their nationalistic feelings. Most people who support Putin, do it because they favour Russian supremacy, they want to feel that Russia is the greatest nation on earth. Globalization robs you of that. As many critics say that people in the European Union have lost their roots and exchanged their culture to material goods. When one sees oneself as a true carrier of civilization and the rest of the world as rotten, one can justify all brutalities in Ukraine.
But the reality is that Russian culture is nothing special, based on the same things that people value all around the world.
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Many of us think crypto and decentralization are just good things in and of themselves.
This is, bluntly, underpants gnomes logic.
I know you're an enthusiast, but liking (and seeing) those things as worthy of pursuit in of themselves does not make it true. There are a lot of X and Y things we can introduce into systems that exist, but would we want to? Is there a tangible, economic benefit? Is it cheaper? Is it better? Or, lacking in those two essential traits: is it the right thing to do regardless?
Forgoing the efficiencies and economies of scale of the current system is a cost. Trusting centralized institutions is extraordinarily cheap on scale. And sure, there may be a market of legitimate use - buying grey-market goods, sending funds to dissidents, etc. But that economic activity is a sliver of a sliver. That's not what advocates are pumping. They're envisioning a mass adoption across the whole economy - of which crypto's limitations and decentralization's costs would become rapidly apparent.
Crypto without exchanges is a currency without liquidity, a nightmare of passphrases and uncertainty of payment. If everyone self-custodies and that is the result, what value is the technology? How are you going to buy a pizza with your cold storage wallet?
At least underpants physically exist as a tangible good.
This may be true, but as Aqouta pointed out, trust has to be earned. Doubly (or triply!) so when you are an institution in a democratic nation. The US Dollar is the world's reserve currency, and while I can grant that fiat currencies are not The Devil, the US Dollar is pretty much held up by confidence in the US Government (or perhaps its value is directly a measure of confidence, even).
So imagine what happens when the country I was born and raised in has been pissing away international goodwill, domestic goodwill, treasure, blood, and competence for practically the entirety of the 21st Century, while private industry finds new ways to exploit the bad decisions made by the Reagan and Clinton admins. Every 5-10 years, there's been some new bubble blowing up, whether that be in tech, housing, or even Crypto. Meanwhile, the Internet, a product of American innovation, has become the new agora, only to be colonized by the same corporate forces colluding with the government to ruin everything. (For God's sake, Visa and MasterCard are pushing Pixiv around. Pixiv! A Japanese company having to self-censor because it made the mistake of connecting itself to the West's payment-processing duopoly!)
I'd like a world, or at least a US, with strong regulations and well-considered laws enforced consistently, where dumb financial shenanigans and abridgement of our God-given rights in the name of profit never happened, but we do not live in that world. We live in the Cheems world instead.
I don't want to act like a defectbot, but our world is incredibly defective, and you do not cooperate with the defective.
Not that I have any true objection to what you just said, but the USD-market has its share of bad actors, then crypto is crawling with them. It would be charitable to say that most of the space is full of scams preying on dumb money.
Just because a system is bad doesn't make its alternative automatically better! Crypto enthusiasts are baffled at the lack of uptake of their ecosystem - it is because for the vast majority of users, they lose their entire investment or come away losing money. An unregulated, legally opaque market is the perfect environment for naive investors to lose their shirt.
(And being a 'grudger', in the defect/cooperative axis, is a suboptimal strategy.)
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Every time I encounter a post like this I have to wonder if we live on the same planet. Have you just not been paying attention?
The center is failing. Absolutely necessary for life central entities are being turned against political enemies. Canadian truckers had their ability to transact removed. Websites have seen what were once bedrocks of the internet open up and swallow them whole at the behest of people who were obviously lying. And this is in the advanced and liberal world.
That you discount centralization risk can't even be described as a failure of imagination because it's happening publicly right in front of you. People are trying to sell you fire insurance in front of your burning home and you are calling them paranoid.
And we can talk about the other benefits if you want, zero cost public and programmable escrow, third party markets for proprietary licenses, cutting out nearly every conceivable middle man or censor for supporting content creators, much more. But you seem to place zero value on decentralization and I can't get you over that hump, you have no plan and don't want one. Good for you. Enjoy your bliss.
I'm find with custodial exchanges existing, I think they're probably the correct option for most people in the mean time. But uncertainty of payment is not crypto, it's centralized entities that can unilaterally tell you to pound sand. And you buy your pizza with your hot wallet obviously, what an absurd question.
On Reddit I made a doomerpost when Trudeau declared his state of emergency. I pulled cash out of my credit union and waited. I'm certainly not uninformed of the problem. I even went to a convoy political meet-up quite recently.
And even in this self-selected audience of people who this is immediately relevant, I heard nothing about crypto. Crypto did not stop the chilling effect of the government declaring martial law. These are relatively affluent blue and white collars and they're keeping their money in relatively traditional investments (gold, real estate, small business) and not crypto. They still bank at Scotia, BMO, etc, for Christ's sake.
And it is because the benefits vastly outweigh the negatives. You can talk all day about things you value but revealed preference shows that most people do not hold the same interest in the technology or in the concept of decentralization. People want to know if it's convenient, cheap, and safe in the real world. If you are a normie with no idea of what crypto is you would have been better off trusting the system because political and free speech rights are secondary to, you know, making sure you don't lose everything to a rugpull.
People who prefer trustless systems are, on the whole, one part tech-libertarian and nine witches.
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I also have a religion and that's fine. It still think that sometimes spending too much time, money and energy on religious activities can be a waste of human potential.
I'll take you seriously when you can successfully follow a 2 step guide for setting up a wallet.
Unnecessarily antagonistic. There was no need for this comment.
fair enough.
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But FTX is not crypto. FTX was a mixture of the old and the new, which is precisely why it failed.
The whole point of crypto is to be completely detached from old systems, so there's zero surface of attack from government. If you use pure crypto (no exchange), then you are immune to these kinds of failures.
I cannot imagine how crypto could work without exchanges.
Once I wanted to install bitcoin wallet just for interest. At that time the wallet file size was 2 terabytes large. I decided not to waste my resources on this. The same is probably true for most people with the exception of a small number of motivated people.
Without exchanges bitcoin would never get to the usage levels it has now. If you want to buy drugs with bitcoin, the seller needs to be able to use those bitcoins to buy something else. Even today there is not much use for them and most likely one needs to use exchange to get another currency that one can use to buy legal things.
I understand the original idea was that everyone mines bitcoins with their own hardware and then engages in commerce with other people. In reality as soon as exchange was started, professional miners started earning real (fiat) money.
But even if bitcoin community had managed to ban exchanges (not really sure how) and had captured sufficiently large economy to be self-sufficient (I sell pizza for bitcoins that I use to buy drugs or whatever), the government would have controlled it, to collect taxes if not for other reasons. Did you know that you have to pay tax even for barter transactions?
There is nothing special about bitcoin as originally intended. It is nothing more than digital cash. That is not sufficient to avoid government control because the government controls physical things. Not fully, not entirely but sufficiently to make it hard enough to discourage the majority.
The exchanges don't need to work like the do now. The exchange could transfer the bitcoin to an external wallet, it doesn't need to be a wallet controlled by the exchange.
It's perfectly doable to buy bitcoins with Binance, and then transfer those to an external wallet you have 100% control of. That way if Binance disappears you still have your bitcoins.
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Decentralized exchanges powered by smart contracts.
You erroneously tried to set up a validator node. A crypto wallet is just a pair of 256 bit keys. You genuinely seem to not know anything at all about crypto, I find it strange that you are willing to comment so confidently on it.
What purpose a wallet will have if I cannot mine or otherwise participate in decentralized network with validations? No, I didn't make a mistake. I just decided that I don't have enough available resources for this.
You don't need a validation node to "participate in decentralized network with validations", much like how you don't need to own a supercomputer to run your code on one.
I am not sure what do you mean by this. Why would I even want to run some code on a supercomputer?
From time to time I'm doing a work project that needs a lot of compute to properly converge. Now this isn't that common an occurrence, to the point that 95% of the time I'm not using one, but for the other 5% of the time it's absolutely necessary, unless I want to wait six months running the code on my office desktop, by which time the signal I'm investigating may well have disappeared. Hence we rent out compute time on a supercomputer from Amazon and this works well for the firm even though owning a supercomputer is not practical as 1) We're not in that line of business and 2) The majority of the time It'd be lying idle doing nothing.
You have a specific job but I don't. Although you could say that by posting here and on reddit I am probably using code that runs on some Amazon cloud services or whatever but that is too indirect.
I just wanted to see if I could be a part of bitcoin network without any extra expense by using my own laptop. It wasn't really possible.
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I'd argue that FTX failed because it made risky bets with depositor funds without consent or disclosure, repeatedly; it could have been completely dollars or completely *coin and had the same problem.
Sure. I am not particularly interested in FTX blow-up. I am saying that whole crypto is misuse of talents and waste of energy, time and money(!). Sometimes we criticise that the smartest minds in Silicon Valley instead of searching for a cure of cancer and other good things, work hard on how to make people to click on ads. But crypto is much worse. Ads at least can help to connect sellers and buyers and improve economy and ultimately our standard of living. But what can crypto give us?
In comparison, Theranos failed and was fraudulent and many hundreds if not thousands of biopharma startups fail. But one of those gave us mRNA vaccine and another Harvoni (highly effective HepC treatment).
I'm very skeptical about crypto, and I agree that the majority of this crap tends to be scams or worse.
But I think people underestimate and badly underestimate the flaws and vulnerabilities in modern centralized systems. People elsewhere have pointed to the issues with financial centralization at time where governments are shutting down bank accounts of dissenters, but it's not the only one. If you don't pay Cloudflare or Akami their due, literally anyone on the internet can burn your site so bad it'll charge you rent. The hosting companies who literally name their company over free speech went from "A lot of people are for it, as long as it’s for them." to "The “Free Speech” in our company name is not a secret dog whistle to you." in less than a decade, and I still trust them better than almost all of the competition, which is to say I trust them a little less far than I can throw their entire server farm.
And there's endless piles of this stuff, in ways that might surprise you! The same
clawbackconsumer protection mechanisms that patio11 argues in favor for traditional finance are why doing anything as a direct seller or commissioner online, no matter how safe and clean, risks getting absolutely steamrolled by chargebacks (and note that Stripe a) won't play with a lot of businesses and b) won't actually guarantee the protection so much as be better than getting fucked over all the time). E-mail and snail mail communication is getting sketchier. The not-very-subtle implication from many messages from OpenAI has been that every regulator anywhere near their field or general policing is breathing down their neck. Search is getting worse by the day; proving identity or ownership of digital media as anything less than a multi-million-dollar corporation is basically just shrug-world.Again, I'm very skeptical: on top of the fraud, there's a deeper fault that crypto isn't there yet and might not be technically capable of getting there. The oracle problem alone makes a crypto-DNS just as vulnerable to centralization failures as traditional DNS, none of the extant chains can get even 1990-levels of compute power together at any latency, it's extremely vulnerable to poisoning, and it's never been particularly clear that the attempted solutions for any of the most trivial of the above problems actually work or could ever work even on toy models.
I'd also prefer more emphasis on atoms than bits -- I love that we're in a world where people are building transistors in their garage, or even marginal stuff like DIY haptics for VR. Getting away from digital providence for everything and anything worth doing would be another solution, albeit one that's probably even harder to solve.
But it's very nearly the only thing even trying to get close to a solution in this problem space. Maybe it'd be better if people realized it was a bad choice, and started fresh; maybe it's not a solvable problem in any way. It's weird to just dismiss the problem space as a whole.
I think that modern finance is complicated and may not be optimal but overall it is working fine. It could be improved but only by people who really understand how it works and what are the actual problems. The crypto essentially proposed to restore the gold standard in a digital format. It completely ignores all the reasons why the gold standard was rejected and tries to solve non-existant problems.
The second aspect that worries me is that most crypto supporters are so much against the government that it could be called anarchist movement. I agree that any government can become dictatorship. But the solution is to make sure it doesn't instead of creating society or any aspect (like finance) that doesn't need government at all.
I'll make the same response I do to more general "but we live in and should reform society" ones: I don't think the math works out for it. You can and should make the democratic arguments where you can win them.
But the truth is you can't win them all. You probably can't even win a majority. Not just in the FCFromSSC sense that multipolar tolerance failed, but the deeper issue where even if it had survived, you need to get to 50%+1. The smallest minority is the individual, and for any politician is willing to serve a market of one, there's a few dozen businesses willing to take commissions for a thousandth of the price.
You cannot win every fight, it doesn't mean that we shouldn't put efforts to support democracy and freedom of speech.
I cannot blame EA or rationalists for not taking greater stance against the government restrictions including vaccine mandates. That's everyone's personal decision to choose the hill to die on. But I am annoyed for them to actually support restriction of speech during the pandemic out of fear from disease. When I tried to speak out in the beginning that forced lockdowns are extremely damaging and will not prevent the spread of covid significantly, they called me names. At the end I was vindicated and the governments that forced lockdowns and vaccine mandates and fired unvaccinated people from their jobs were proven wrong, and that's not even acknowledged properly.
Possibly we got into this situation because dissenting voices were subtly and unjustly suppressed on all levels, including on social media. Alex Berenson was kicked out from Twitter for saying that vaccine does not prevent the spread of infection when this information was already publicly known. I don't agree with everything he says but clearly the overzealous fact-checkers had no understanding of nuance and scientific details.
In spite of all these setbacks, I believe that the only way forward is to foster debate, free speech and democratic norms. We need to learn from these mistakes. It is not too late to fix Canadian customs law and make them to respect minorities. Concentrating too much on technical solutions makes us to lose the focus on these important aspects.
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