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suy  2yr ago (astralcodexten.substack.com)   Edited 2yr ago   4226 thread views

Scott Alexander on Sam Bankman-Fried, FTX and Effective Altruism

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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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.

I cannot imagine how crypto could work without exchanges.

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.

I cannot imagine how crypto could work without exchanges.

Decentralized exchanges powered by smart contracts.

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.

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?

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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