Crypto is easier to trace by law enforcement than fiat according to a former deputy FBI director. This shouldn’t be surprising as it has to be converted to fiat at some point plus all the hacks that have taken place. Yet another shortcoming of crypto and why it’ll ultimately just be rendered to a dark corner of cyber.
I’ve been critical of crypto for many years and, in particular, derivatives like NFTs. My evaluation was always simple through a product lens: what value does it create for what segment / what problem does it solve? Interestingly, when I’ve posed this to crypto advocates, I never get a clear answer (as a side note, I believe the blockchain tech belying crypto has interesting use-cases like chain-of-control for produce so this is mostly focused on crypto/NFTs). In addition, when knowing that the vast majority of crypto is held by a tiny minority of people, you start getting more nefarious thoughts about what is really going on.
This post by Lars Doucet on Noahpinion has some interesting points including the comparison between crypto and Amway.
Amway and crypto on the surface might not immediately seem similar. Amway was (allegedly) a convoluted system where you bought a bunch of products from them that you then sold to family and friends and eventually other customers, and then you recruited those same people to become part of your distribution network, forming your “downline.” Then you would (allegedly) encourage them to recruit more people of their own, forming their own downlines, which would nest inside of yours. From their perspective, you and everyone in the recruitment chain above you would form their “upline.”
https://noahpinion.substack.com/p/is-web3-culture-similar-to-amway
My dollars (euros, etc) are already digital. I rarely transact with them physically. Do the transaction facilitation middle-men and clearing agents extract too high a fee? Perhaps, but I know its been coming down dramatically with newfound digital competition (and some regulation particularly in Europe). Plus, those fees fund the many layers of private and public monitoring and regulation which is fundamental to a high functioning financial system that crypto cannot replace (at least under current proposals).
BTW, this video terrifies me:
This is the best article yet to have an objective view of why web3 (including cryptocurrencies, NFTs and blockchain) are just more of the same centralized control. Its mostly people trying to unlock value from the big “web2” platforms and make their own. Don’t be fooled by the hype as its the wild west filled with snake oil salespeople:
I have only dipped my toe in the waters of web3. Looking at it through the lens of these small projects, though, I can easily see why so many people find the web3 ecosystem so neat. I don’t think it’s on a trajectory to deliver us from centralized platforms, I don’t think it will fundamentally change our relationship to technology, and I think the privacy story is already below par for the internet (which is a pretty low bar!), but I also understand why nerds like me are excited to build for it. It is, at the very least, something new on the nerd level – and that creates a space for creativity/exploration that is somewhat reminiscent of early internet days. Ironically, part of that creativity probably springs from the constraints that make web3 so clunky. I’m hopeful that the creativity and exploration we’re seeing will have positive outcomes, but I’m not sure if it’s enough to prevent all the same dynamics of the internet from unfolding again.
https://moxie.org/2022/01/07/web3-first-impressions.html