Sometimes people start out poor, and end up rich. Sometimes this is because they create real net value for the world, and sometimes this is because they gambled, where their wins came from others’ losses. But to the people involved, this difference may not be noticeable. What they see is how they started poor, then initiated many particular risky and effortful activities, had ups and downs which tempted them to quit, but had attitudes that made them persist, and then they finally succeeded.
You seem to be suggesting a kind of mimetic quality to crypto. What are the interesting projects which arise from this mimesis? Absent such specifics, it's unclear to me how realistic your argument is.
This feels dramatically overoptimistic in its typecast of crypto investors, as some sort of inherently altruistic persona which I have a hard time subscribing to. I think it underestimates—potentially wildly—the percentage of these gamblers that were in it because they saw a chance at increasing their personal wealth, as many gamblers do, as oppose to those with "unique penetrating insights which let them see past the lies and conformity to bravely and in teams fight to create and pursue longshot bets..."
Where I live, there was a craze a few years ago around MLM essential oil schemes. A handful of folks became very wealthy, some broke even, and most lost money. The underlying product was described as a revolutionary cure for every ailment, but not actually used that much.
No one talks that much about essential oils these days. They've taken a boring place in most people's cabinets as modestly useful aromatherapy.
If there's a silver lining as you hope for cryptocurrency, I suspect it's as a similarly modest utility.
"I suspect the historical record will show that past bursts of speculative fever tended to be followed by bursts of interesting projects funded by the speculation winners."
Yes, and paradoxically I feel like this is actually subconsciously (emergently? hive-mind-like?) what people are "trying" to accomplish. I feel like crypto is the most "pure" (in a neutral sense, not saying it's "good" - or "bad") form of aggregate investment speculation. For all the other features that may or may not exist, I feel like most coins rise in price purely based on "positive new tech feelings" and innate human novelty seeking. Some rise more than others, if they have perceived specific use-cases (real or not) but in aggregate they are essentially equivalent to buying shares in a "small cap start-up venture capitalist index fund with almost no filters."
So yeah there are scams, there are gains-recipients who blow it on heroin or fraud, there are "industry"-wide disasters, but the vital component of "why" people think that "crypto also uniquely satisfies a deep widespread desire to speculate and gamble" is because our brains are evolved to seek high reward, high-risk-for-the-individual strategies, (because evolution does not care if 99 monkeys die, if 1 monkey discovers something a thousand times better) and we've successfully internalized (as a species) that "wild eyed crazy person pitching new idea" is actually how those strategies often manifest themselves, and that on net, that (SO FAR) results in benefits for humanity as a whole. While certainly allowing that there may be highly negative returns for most "investors" and even "for everyone" relatively frequently. But the general strategy is "resources from not-crazy-idea people --> crazy-idea-people --> therefore crazy people have resources to explore, mostly fail, but sometimes succeed at plans that end up being better for everyone, on net."
My use of the term "investment" applies to everything from crypto to stocks to colonialism, the East India Company, to Alexander's conquests, to founding the first cities, to humans leaving east Africa, to "hey monkeys, let's go see what's in the next valley over".
That may be more relevant for how Bitcoin managed to bootstrap* up from having zero to non-zero value. Traditional theories of money (like chartalism) value fail to explain that, but Bitcoin as a community drawing such types could potentially do so.
Watching crypto history since $160, and realising how important this gambling is, I still figure out how to make from the blockchain technology itself and implement it in my vision and projects not making profit from price etc…
My basic view of crypto is that it is the most rigorous framework for property rights in the digital realm, and assuming that the world economy continues digitizing, it should be #uponly for crypto.
This is a good thing, since I agree with Hanson that the sorts of people who tend to become rich in crypto are much more visionary and "interesting" than their equivalents in the more "traditional" sectors of the economy.
Almost all crypto will eventually go to zero. Most crypto projects rely on Ponzi tokenomics and deliver zero real world value. Even well-intentioned projects in the Ethereum ecosystem (and its various step children), are plagued with insurmountable scaling issues because of a fundamental design bottleneck: relying on account-based or state-dependent architecture that freezes whenever placed under serious loads (CryptoKitties crashing ETH, numerous Solana shutdowns, etc.). There is only one architecture able to scale in parallel: the cash-based or UTXO architecture invented by Satoshi. Most are also unaware that the original Bitcoin protocol also includes a Turing-complete smart contract programming script, and any ETH based Solidity smart contract can be easily recompiled to run on the original Bitcoin protocol (not BTC, which is a corrupted hard-fork). Satoshi’s genius is not fully understood or appreciated: his Bitcoin protocol uniquely tags and time-stamps data so that it can be owned and transferred without copying, fundamentally monetizing data for the first time. Prediction: this technology will disrupt the financial industry, destroy the advertising model of Big Tech, and will likely be integrated into the internet itself at the TCP/IP level.
As a self interested degenerate crypto gambler let me make this point in defense of crypto's utility:
It enables freedom of transacting value, and it's easy to under-appreciate it living in a mostly free country. As a recent example: crypto became the default way for people to get money out of russia, when they were fleeing after the war started.
It's not a "story" about the world. It is worlding, they are worlding. The way one might make a cocoon out of shiny excreta.
It's not art. It's not religion. It's not marketing. Sure, they all use stories and documentation, but it's worlding. We live it as much as we embody it, it's where our identities live, in the extended phenotype, in the metaverse of mythology, cryptic or not.
When you talk about people who get rich through crypto, I assume you're talking about the retail traders who buy low and sell high – not the people like SBF who start exchanges, do ICOs, and the like. Nobody in the latter group goes on to "pursue ambitious interesting projects to change the world". They stay in crypto.
My sense is that the retail investors themselves are pretty unsophisticated as a group. They are overwhelmingly young single men with relatively little investing knowledge, aiming to get rich quick. With no underlying value to the thing they're betting on, they tend to believe a set of narratives (diamond hands/hodl/to the moon) for why they'll get rich. There's a parallel to heavy slot machine players, who believe in such things as lucky machines and hot streaks (or to lotto players with their "lucky numbers").
I'm a bit skeptical that the winners here go on to "pursue ambitious interesting projects to change the world". I think it's more likely they buy Ferraris. But I could be wrong.
Viewing someone or something becoming extremely wealthy through speculation as a solution to a broken world seems strange to me. Obviously everyone has their own ideas about what is broken in the first place. What are we trying to fix exactly? What can we all agree on?
You seem to be suggesting a kind of mimetic quality to crypto. What are the interesting projects which arise from this mimesis? Absent such specifics, it's unclear to me how realistic your argument is.
This feels dramatically overoptimistic in its typecast of crypto investors, as some sort of inherently altruistic persona which I have a hard time subscribing to. I think it underestimates—potentially wildly—the percentage of these gamblers that were in it because they saw a chance at increasing their personal wealth, as many gamblers do, as oppose to those with "unique penetrating insights which let them see past the lies and conformity to bravely and in teams fight to create and pursue longshot bets..."
Adam Smith would have read that opening sentence and gone ballistic that you didn't mention rent-seeking.
Where I live, there was a craze a few years ago around MLM essential oil schemes. A handful of folks became very wealthy, some broke even, and most lost money. The underlying product was described as a revolutionary cure for every ailment, but not actually used that much.
No one talks that much about essential oils these days. They've taken a boring place in most people's cabinets as modestly useful aromatherapy.
If there's a silver lining as you hope for cryptocurrency, I suspect it's as a similarly modest utility.
"I suspect the historical record will show that past bursts of speculative fever tended to be followed by bursts of interesting projects funded by the speculation winners."
Yes, and paradoxically I feel like this is actually subconsciously (emergently? hive-mind-like?) what people are "trying" to accomplish. I feel like crypto is the most "pure" (in a neutral sense, not saying it's "good" - or "bad") form of aggregate investment speculation. For all the other features that may or may not exist, I feel like most coins rise in price purely based on "positive new tech feelings" and innate human novelty seeking. Some rise more than others, if they have perceived specific use-cases (real or not) but in aggregate they are essentially equivalent to buying shares in a "small cap start-up venture capitalist index fund with almost no filters."
So yeah there are scams, there are gains-recipients who blow it on heroin or fraud, there are "industry"-wide disasters, but the vital component of "why" people think that "crypto also uniquely satisfies a deep widespread desire to speculate and gamble" is because our brains are evolved to seek high reward, high-risk-for-the-individual strategies, (because evolution does not care if 99 monkeys die, if 1 monkey discovers something a thousand times better) and we've successfully internalized (as a species) that "wild eyed crazy person pitching new idea" is actually how those strategies often manifest themselves, and that on net, that (SO FAR) results in benefits for humanity as a whole. While certainly allowing that there may be highly negative returns for most "investors" and even "for everyone" relatively frequently. But the general strategy is "resources from not-crazy-idea people --> crazy-idea-people --> therefore crazy people have resources to explore, mostly fail, but sometimes succeed at plans that end up being better for everyone, on net."
My use of the term "investment" applies to everything from crypto to stocks to colonialism, the East India Company, to Alexander's conquests, to founding the first cities, to humans leaving east Africa, to "hey monkeys, let's go see what's in the next valley over".
That may be more relevant for how Bitcoin managed to bootstrap* up from having zero to non-zero value. Traditional theories of money (like chartalism) value fail to explain that, but Bitcoin as a community drawing such types could potentially do so.
* https://jpkoning.blogspot.com/2017/11/the-bootstrapping-of-thorne-magic-money.html
Now that crypto is in peoples 401ks is going to get a bail out if it ever crashes.
Oh yes :)
Watching crypto history since $160, and realising how important this gambling is, I still figure out how to make from the blockchain technology itself and implement it in my vision and projects not making profit from price etc…
back link https://whyweshould.substack.com/p/worlding-example-crypto-fairy-tales
My basic view of crypto is that it is the most rigorous framework for property rights in the digital realm, and assuming that the world economy continues digitizing, it should be #uponly for crypto.
This is a good thing, since I agree with Hanson that the sorts of people who tend to become rich in crypto are much more visionary and "interesting" than their equivalents in the more "traditional" sectors of the economy.
Almost all crypto will eventually go to zero. Most crypto projects rely on Ponzi tokenomics and deliver zero real world value. Even well-intentioned projects in the Ethereum ecosystem (and its various step children), are plagued with insurmountable scaling issues because of a fundamental design bottleneck: relying on account-based or state-dependent architecture that freezes whenever placed under serious loads (CryptoKitties crashing ETH, numerous Solana shutdowns, etc.). There is only one architecture able to scale in parallel: the cash-based or UTXO architecture invented by Satoshi. Most are also unaware that the original Bitcoin protocol also includes a Turing-complete smart contract programming script, and any ETH based Solidity smart contract can be easily recompiled to run on the original Bitcoin protocol (not BTC, which is a corrupted hard-fork). Satoshi’s genius is not fully understood or appreciated: his Bitcoin protocol uniquely tags and time-stamps data so that it can be owned and transferred without copying, fundamentally monetizing data for the first time. Prediction: this technology will disrupt the financial industry, destroy the advertising model of Big Tech, and will likely be integrated into the internet itself at the TCP/IP level.
As a self interested degenerate crypto gambler let me make this point in defense of crypto's utility:
It enables freedom of transacting value, and it's easy to under-appreciate it living in a mostly free country. As a recent example: crypto became the default way for people to get money out of russia, when they were fleeing after the war started.
Crypto is an insurance against oppression
It's not a "story" about the world. It is worlding, they are worlding. The way one might make a cocoon out of shiny excreta.
It's not art. It's not religion. It's not marketing. Sure, they all use stories and documentation, but it's worlding. We live it as much as we embody it, it's where our identities live, in the extended phenotype, in the metaverse of mythology, cryptic or not.
https://whyweshould.substack.com/p/worlding-world-building-artingreligioningmarketi
When you talk about people who get rich through crypto, I assume you're talking about the retail traders who buy low and sell high – not the people like SBF who start exchanges, do ICOs, and the like. Nobody in the latter group goes on to "pursue ambitious interesting projects to change the world". They stay in crypto.
My sense is that the retail investors themselves are pretty unsophisticated as a group. They are overwhelmingly young single men with relatively little investing knowledge, aiming to get rich quick. With no underlying value to the thing they're betting on, they tend to believe a set of narratives (diamond hands/hodl/to the moon) for why they'll get rich. There's a parallel to heavy slot machine players, who believe in such things as lucky machines and hot streaks (or to lotto players with their "lucky numbers").
I'm a bit skeptical that the winners here go on to "pursue ambitious interesting projects to change the world". I think it's more likely they buy Ferraris. But I could be wrong.
Viewing someone or something becoming extremely wealthy through speculation as a solution to a broken world seems strange to me. Obviously everyone has their own ideas about what is broken in the first place. What are we trying to fix exactly? What can we all agree on?