Aedilred's Athanasiac Random Banter #241

[Rater202]

Paper money that's not even backed by gold? I thought you liked "old fashioned" money. Not this modern fiat currency.

Gold coins aren't old fashioned.

Bartering's old-fashioned.

You want me to make you some leather gloves? You better bring me two pumpkins my friend.

[Peelee]

Green paper money isn't modern though. It has been for so many years before when I was born.

Your birthday is not what defines something as being modern.

Gold coins aren't old fashioned.

Bartering's old-fashioned.

You want me to make you some leather gloves? You better bring me two pumpkins my friend.

Best I can do is a small lump of gold. I banged it into a little disc shape though, that's pretty neat!

[Bartmanhomer]

Your birthday is not what defines something as being modern.

Best I can do is a small lump of gold. I banged it into a little disc shape though, that's pretty neat!

Well what constitutes being modern then?

[Peelee]

Well what constitutes being modern then?

Depends on the thing. With TVs, for example, curved screens are fairly modern and CRTs are old fashioned. But TVs have only been around for 70 years or so. Currency? That's been around for millennia. Fiat currency is incredibly modern.

[Qwertystop]

Gold coins aren't old fashioned.

Bartering's old-fashioned.

You want me to make you some leather gloves? You better bring me two pumpkins my friend.

Questionable - apparently barter economies are mostly found among groups people who previously had money-based economies but then ceased to have access to money, rather than in contexts where money has not yet been invented yet (where instead you get things like gift economies or communal allocation of goods).

[Rater202]

Questionable - apparently barter economies are mostly found among groups people who previously had money-based economies but then ceased to have access to money, rather than in contexts where money has not yet been invented yet (where instead you get things like gift economies or communal allocation of goods).

Damn you, public school!

[Anonymouswizard]

I have a very interesting question to ask everyone: What does everyone think of bitcoins or cryptocurrency? I'm not a fan of bitcoins or cryptocurrency because I have a very difficult time understanding virtual money plus I prefer old-fashioned money.

It inherently goes against the principles of the kind of internet I like. Also a lot of things not suitable for this board.

I never asked for digital scarcity in the first place.,

[Murk]

I think cryptocurrencies are very cool.
When I learned as a kid that money doesn't have inherent value I often thought "so why can't I just make my own currency?", which of course always failed.

But cryptocurrency actually did "just make their own currency" and some of them rather succesfully.
I like that. It's like a conlang that people actually speak, a functioning micronation or a succesful indie kickstarter.

Yeah, crypto quickly turned into an environmentally-damaging moneymaking scam, but that's just what people do with all cool things.

[Aedilred]

Green paper money isn't modern though. It has been for so many years before when I was born.

Modernity started in around 1450

But Peelee's teasing you. The point is that modern cash money - all paper money, and almost all coins - is actually just junk with an exchangeable IOU printed on it. If you look closely at some countries' paper money this is made explicit: £10 notes issued by the bank of England say for instance "I promise to pay the bearer on demand the sum of £10": the note itself is just a promise of payment . The coins and notes have no value in and of themselves and the only reason people accept them as payment is that they believe the central bank issuing them is reliable enough that the debt will be honoured if ever called in.

Once upon a time coins were made from precious metals, so the coin itself was worth roughly what it said it was even if the central bank in question collapsed. Once they stopped making coins out of precious metal, central banks still used to keep the value of their currency pegged to precious metals, so that say one US dollar was always worth the same amount of gold. For various reasons, most countries don't do that any more (I want to say "nobody", but there might be someone somewhere who still does). So modern money gets its value from what people believe it's worth, not because the coin or note actually has any value.* The coins and notes are just physical tokens to represent the transfer of money, most of which actually happens by adjustment of digital ledgers.

Cryptocurrency works in pretty much exactly the same way. The only difference is that there is no central bank behind the currency. This means that if the market loses confidence in a cryptocurrency (or , there's nobody to step in to try to steady the ship, and this is one of the reasons why crypto tends to fluctuate in value much more than most currencies that people trade in (i.e. volatility).

That is all very heavily simplified but hopefully explains what's going on. So what Peelee is getting at is that although you say you prefer "old fashioned money" the difference between the money you use, and crypto, is in many ways minimal. If you really want the money you carry around to have inherent value, you need to be using gold or silver (etc.) coins.**


*Of course, gold and silver only have a value of what people say they're worth too. But it has been taken for granted for millennia that precious metals do have inherent value.
**Some banks, including the US Federal Reserve and the Bank of England, do still issue gold and silver coins. But these are collection pieces, not intended to be used as everyday coins (in fact, the face value of the coin is usually much less than the precious metal content, so if you do pay for goods using them as coins, you're getting a very bad deal).

[Anonymouswizard]

But cryptocurrency actually did "just make their own currency" and some of them rather succesfully.

Here's the thing though, the more successful a coin is the worse at being a currency it is. The smallest unit of Bitcoin is one bitcoin, so let's take a wallet and do a weekly food shop!

I mean we could. But bitcoins are scarce but valued enough that I'd have to buy in the region of 240 weeks worth of food, plus spend more money to actually get a transaction slot. The very systems baked into successful cryptocurrency stop them from being used as practical currencies.

That's not getting into the philosophical disagreements some of us have against cryptocurrency and blockchains.

[Fyraltari]

Why is it a huge scam? I'm curious.

Because cryptocurrency cannot and never will fullfill its basic promise while at the same time it causes a lot of damage (such as enbaling even bigger scams, like NFTs).

The main selling point of cryptocurrency is to be a currency freed from a central authority, one that would in time replace fiat money, right? Problem is that the nature of the blockchain technology and the encryption protocol means that each transaction takes ages. Imagine grocery shopping except that each buyer has to spend 15 more minutes at the register for the money they're paying to be transferred to the shop, can you picture the size of the queue? And since the value of each cryptocurrency varies wildly very fast, the amount of money you end spending at the end of the calculation is going to be very different from the one you promised at the beginning. You meant to give away $15 but what you actually gave could be anywhere between $0.03 and $250,000. Good luck!

Because the calculations take so long (and other factors, I'm not an expert), the blockchains end up splitting (or forking) creating parallel blockchains. Which one is the real one? Well someone is going to have to decide. What was that about cryptocurrencies not being beholden to central authorities?

As a result, cryptocurrencies have almost no practical application (except for cases where you really, really want your transaction to be untraceable. Like buying hard drugs or sex slaves) meaning almost all of its value come from speculation. Oops, that's a bubble! The only way to get rich using cryptocurrencies is to be one of the early adopter who convinced other people to join in and sold them cryptocurrency in exchange for large sums of fiat currency. Sounds suspiciously like a pyramid scheme to me.

And finally, those huge calculations demand a huge (and ever-growing) amount of power. Since the power grid isn't running entirely on renewable energy yet, that does a tremendous amount of damage to the environment.




So, basically, cryptocurrencies are just another way the web 3.0 is turning the internet into a nightmare.

I think cryptocurrencies are very cool.
When I learned as a kid that money doesn't have inherent value I often thought "so why can't I just make my own currency?", which of course always failed.

But cryptocurrency actually did "just make their own currency" and some of them rather succesfully.
I like that. It's like a conlang that people actually speak, a functioning micronation or a succesful indie kickstarter.

Yeah, crypto quickly turned into an environmentally-damaging moneymaking scam, but that's just what people do with all cool things.

All money is fake, but that doesn't mean all money is created equal. Some are faker.

[Peelee]

Because cryptocurrency cannot and never will fullfill its basic promise while at the same time it causes a lot of damage (such as enbaling even bigger scams, like NFTs).

Eh, NFTs aren't inherently a scam. Imean, the ape pictures were just money laundering, sure.

[Form]

I would advise anyone to stay far away from cryptocurrencies, including for the very good reasons already listed above by several others. As far as I know there is no problem that crypto claims to solve that is not already solved in a different, better way and cryptocurrencies are notoriously volatile, though cryptoenthusiasts sometimes like to claim they're not (because they're dishonest and/or delusional). The crytospace is rife with scams and, frankly, you'll have a hard time to tell the scammy ones apart from the 'legit' ones (because these ones are also scams) because of the very nature of cryptocurrencies.

I'd honestly consider going to a casino to be a better 'investment' of one's money. At least then it's clear you're gambling with your money and the casino is more honest about it.

Eh, NFTs aren't inherently a scam. Imean, the ape pictures were just money laundering, sure.

I've yet to see or hear of a NFT that is not a scam or at the very least a blatant cash grab whilst providing nothing of value, so I'm going to continue to treat NFTs as inherently scammy.

[Aedilred]

Here's the thing though, the more successful a coin is the worse at being a currency it is. The smallest unit of Bitcoin is one bitcoin, so let's take a wallet and do a weekly food shop!

I mean we could. But bitcoins are scarce but valued enough that I'd have to buy in the region of 240 weeks worth of food, plus spend more money to actually get a transaction slot. The very systems baked into successful cryptocurrency stop them from being used as practical currencies.

That's not getting into the philosophical disagreements some of us have against cryptocurrency and blockchains.

I mean, you can trade fractions of a base currency unit. You don't have to spend a minimum of one bitcoin on any transaction, just as you don't have to spend a minimum of one pound on any transaction.

As to transaction time, that is an issue, but it's one that also affects regular currencies and they've got round it without the need to wait for cleared funds every time. As to the fee, from what I understand, these do create friction but they're not that different in proportion to the transaction charge you often get for using a debit or credit card online. Or in some cases, the charge for a plastic bag from a supermarket.


Overall, I do entirely agree that people should stay well away from crypto unless they really know what they're doing (and chances are, if you're asking about it on a forum like this, you don't) and have enough financial security elsewhere that you can afford to lose everything you put into crypto. I do, however, think that the underlying principles have validity and I don't think that they or NFTs are inherently a scam. (Much of the reason for this is sufficiently political that we can't really discuss it here). It's just that that's the way it always works out because the only people willing to put serious time and money into making it work are functionally scammers.

[Peelee]

I've yet to see or hear of a NFT that is not a scam or at the very least a blatant cash grab whilst providing nothing of value, so I'm going to continue to treat NFTs as inherently scammy.

Let's say you play the new Star Wars game and you buy a lightsaber from the online store with euros. You then decide later on that you don't care for that lightsaber anymore and you decide to sell it to another player, not for in-game currency but for euros, just as if you had bought a collectible lightsaber from a store and fhen later sold it to someone else. Except it was a digital lightsaber that only exists in code online.

[Fyraltari]

Let's say you play the new Star Wars game and you buy a lightsaber from the online store with euros. You then decide later on that you don't care for that lightsaber anymore and you decide to sell it to another player, not for in-game currency but for euros, just as if you had bought a collectible lightsaber from a store and fhen later sold it to someone else. Except it was a digital lightsaber that only exists in code online.

Okay, now let's say that what you bought and sold wasn't the lightsaber that you can use in-game but but a piece of text claiming that you are the lightsaber's owner that doesn't give you any special control over the lightsber. Everyone else is still able to use the lightsaber as much as they want, for free.

That's Non Fungible Tokens. You aren't buying the picture, you're buying a token saying you own the picture. Everybody else can just right-click on the JPEG to use it as a profile picture or whatever and there's nothing you can do about it. Because you didn't actually buy the picture.

[Anonymouswizard]

Eh, NFTs aren't inherently a scam. Imean, the ape pictures were just money laundering, sure.

I've yet to see a good use for them that doesn't basically boil down to 'proof of access'. I mean sure, maybe I'll be able to buy a hairstyle for my Team Fortress 3 character and sell it to another player, but CSGO skin trading was a thing before NFTs came along.

They're not inherently a scam, but I really don't know of a single use for them that I actually want.

[Form]

It's just that that's the way it always works out because the only people willing to put serious time and money into making it work are functionally scammers.

I feel that already says a lot about the nature of crypto if that's the kind of people it attracts more than anyone.

Let's say you play the new Star Wars game and you buy a lightsaber from the online store with euros. You then decide later on that you don't care for that lightsaber anymore and you decide to sell it to another player, not for in-game currency but for euros, just as if you had bought a collectible lightsaber from a store and fhen later sold it to someone else. Except it was a digital lightsaber that only exists in code online.

Except you don't need NFTs for that, as shown by the fact that item trading between players was a thing well before NFTs. Outside of video games: see also things like transferring real money digitally to someone else's account, which is the same principle (digital transfer of a thing) and also does not require NFTs.

I also really don't like microtransactions in general, but that's admittedly separate issue from NFTs. Still, I feel that NFTs enabling those is just yet another mark against them.

[Peelee]

Okay, now let's say that what you bought and sold wasn't the lightsaber that you can use in-game but but a piece of text claiming that you are the lightsaber's owner that doesn't give you any special control over the lightsber. Everyone else is still able to use the lightsaber as much as they want, for free.

That's Non Fungible Tokens. You aren't buying the picture, you're buying a token saying you own the picture. Everybody else can just right-click on the JPEG to use it as a profile picture or whatever and there's nothing you can do about it. Because you didn't actually buy the picture.

Except other people can't use the lightsaber. Other people could copy the image of the lights art, but as I specifically used an example of something that is not an image, that's not useful in any way.

Except you don't need NFTs for that, as shown by the fact that item trading between players was a thing well before NFTs.

You don't need euros to buy a fish as shown by the fact that trading between fishmongers and peasants was a thing. Imean, if we want to talk about "need". And disregarding that most trading is done with in-game currency and trading personally purchased digital items for real currency is trickier.

The question wasn't why are NFTs "needed". It was whether there is a non-scam use for NFTs. If you want to shift the discussion to need, that's all well and fair, but let's not use it as a rebuttal for the first issue.

[Anonymouswizard]

Except other people can't use the lightsaber.

You're underestimating the determination of video game modders

Don't do NFTs kids! There's a reason their creator called them No ****ing Thanks.

[Aedilred]

I feel that already says a lot about the nature of crypto if that's the kind of people it attracts more than anyone.

I think it says more about the nature of people. The principal attraction of crypto is that it's absent central control, particularly state control. That makes it an ideal environment for people with no conscience to take advantage of others. Any time you create a space with minimal-to-no restrictions on behaviour, it lasts at best for a short time before those people discover it and ruin it. State of nature, baby.

Crypto is particularly bad for this because its nature tends to attract people who are both generally credulous and idealistic, and have no real experience with financial mechanisms or investments, who are perfect prey for the scammers.

[Peelee]

You're underestimating the determination of video game modders

Well sure but it's not like nobody's ever engraved their own plates and made their own cash to pass off as the real thing. Doesn't mean that's not a non-scam use case of NFTs.

Don't do NFTs kids! There's a reason their creator called them No ****ing Thanks.

Oh, I'm not saying they're a good idea at all!

I think it says more about the nature of people. The principal attraction of crypto is that it's absent central control, particularly state control. That makes it an ideal environment for people with no conscience to take advantage of others.

I think you're right about the nature of people absent state control, but not in the way you think. And I actually have a fascinating case study to back that up, but sadly not one I could share here. It's really cool though. It's got bears.

[Fyraltari]

Except other people can't use the lightsaber. Other people could copy the image of the lights art, but as I specifically used an example of something that is not an image, that's not useful in any way.

That's not how NFT works, though. They're tokens, not the object they represent. When somebody buys an NFT of one of the bored apes, they don't buy the digital file or anything like that. They get their name affixed to the relevant blockchain and that's it.

If someone buys an NFT of an in-game object, they don't get the object, they get their name added to the blockchain.

[Peelee]

That's not how NFT works, though. They're tokens, not the object they represent. When somebody buys an NFT of one of the bored apes, they don't buy the digital file or anything like that. They get their name affixed to the relevant blockchain and that's it.

If someone buys an NFT of an in-game object, they don't get the object, they get their name added to the blockchain.

The object could also be the token.

[Fyraltari]

The object could also be the token.

Could it? Wouldn't that make it no longer a token?

[Anonymouswizard]

The object could also be the token.

That's great for all the token collectors. But I'm not collecting tokens, I'm collecting lightsabers.

It's like buying a milk cap with the picture of the Mona Lisa, and claiming that it means you own the Mona Lisa. Sure, there might be a contract out there saying the owner of the milk cap owns the painting, but I'm highly doubtful that's the case.

[Peelee]

Could it?

Yes. I actually looked it up before I posted to ensure I wasn't just tossing out silly ideas.

That's great for all the token collectors. But I'm not collecting tokens, I'm collecting lightsabers.

The token is built into the lightsaber. It's a digital item with a digital token attached. You cannot collect one without the other. By collecting tokens you are collecting digital lightsabers.

It's like buying a milk cap with the picture of the Mona Lisa

No, it's not.

[Keltest]

That's great for all the token collectors. But I'm not collecting tokens, I'm collecting lightsabers.

It's like buying a milk cap with the picture of the Mona Lisa, and claiming that it means you own the Mona Lisa. Sure, there might be a contract out there saying the owner of the milk cap owns the painting, but I'm highly doubtful that's the case.

Worse than that, because a lot of the time NFTs are being used to openly steal things like artwork and profit from that theft. Take your Mona Lisa milk cap. Youve got the contract, except that contract was written by some rando with a computer in Idaho who does not own the Mona Lisa to sell it in the first place. But they created an NFT of the Mona Lisa, and sold that, and now somebody out there thinks they actually own the Mona Lisa, and not just a sticker with their name on it that somebody has arbitrarily decided is attached to the Mona Lisa without any ability to decide or enforce that.

The token is built into the lightsaber. It's a digital item with a digital token attached. You cannot collect one without the other. By collecting tokens you are collecting digital lightsabers.

This may be the theoretical idea of how they were supposed to work, but allow me to tell you quite directly that they do not work that way in practice. You might find some less malicious people who actually will give you the digital lightsaber with the token, but a very significant number of NFTs do not come with that.

[Form]

You don't need euros to buy a fish as shown by the fact that trading between fishmongers and peasants was a thing. Imean, if we want to talk about "need". And disregarding that most trading is done with in-game currency and trading personally purchased digital items for real currency is trickier.

The question wasn't why are NFTs "needed". It was whether there is a non-scam use for NFTs. If you want to shift the discussion to need, that's all well and fair, but let's not use it as a rebuttal for the first issue.

Well, alright, allow me to put it thusly: The only reason for a company to push NFTs seems to be to allow them to sell a whole bunch of overpriced junk by introducing artificial scarcity whilst pretending this somehow empowers consumers when in reality it does not. We could get into the weeds about whether NFTs are technically inherently scammy or not and you might very well be correct, but in practice I don't see a meaningful difference.

When someone tries to sell NFTs to a consumer base, even though NFTs do not actually fulfill a need that's not already met in different and better ways, I get very suspicious as to why they're pushing NFTs instead of something else that's less prone to abuse and/or less complicated. As such, I don't have a problem regarding NFTs as inherently scammy, technicalities and semantics be damned.

[Peelee]

Well, alright, allow me to put it thusly: The only reason for a company to push NFTs seems to be to allow them to sell a whole bunch of overpriced junk by introducing artificial scarcity whilst pretending this somehow empowers consumers when in reality it does not.

I'm not disagreeing with any of this. However, the vast majority of that also describes the fine art world, I find it interesting to note.