Let's have a frank discussion about bitcoin hype. Bitcoin is really an symptom of the problems of our era, of a post-truth world awash in crackpottery and of a breakdown of trust in our institutions. 🧵 (1/)
First, cryptocurrencies absolutely aren't currencies. They're a sort of pseudo-asset, in the sense that all people do is speculate on its price movements with the expectation of a return on investment. (2/)
Which is pretty much why all bitcoiners ever do is just talk about its price in USD, because there's nothing else *to* talk about. There's no additional structure to the asset other than what someone else will pay for it currently. (3/)
This is very different than trading other products like bonds or equities. Companies actually *do* an economic activity: they build cars, fabricate semiconductors, cook burgers etc. (4/)
You can value normal financial products in terms of the risk associated with their future cashflows and get some approximation for what they are worth on the market. (5/)
Bitcoin has no structure or future cashflows. It is simply a greater fool investment, you only buy them to sell them to someone who is a greater fool than you and will pay more for it. (6/)
Trading these kind of products is a purely negative sum activity, if you factor in the market making and transactions on top of the zero-sum musical chairs, trading it statistically has a negative expected return. (7/)
Sure some people will make money, however you'll never hear about the ones that don't. And everything one winner is necessarily paid by out by multiple losers. (8/)
The reason bitcoiners take out advertisements on the subway and engage in conspicuous consumption is to increase the pool of fools, so that those that bought in early can cash out. (9/)
The whole structure of this project is just wealth redistribution derived from fleecing others and convincing them to buy into this get-rich scheme. Which is why these people are so vocal in touting the investment and act like rabid cultists. (10/)
The whole "brand" of this scheme depends on public perception that it is actually some crazy future tech that you have to get in early on, or miss out. And it cloaks itself in this techno-libertarian narrative about financial independence from the state. (11/)
The reality is simply the same story conmen and hucksters have been selling throughout human history: money for nothing out of nothing, just get in early and don’t ask where it comes from. (12/)
If you peel back the slick marketing and technical obscurantism you're confronted with a simple inescapable cashflow question. Where will all the money come from to pay out all these new paper bitcoin millionaires?

The answer is simple: they need it to come from you.


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More from @smdiehl

12 Jan
Wow, people take the FP winter quote way out of context. I didn't say FP heat death is coming.

Historically the AI winter lead to a machine learning boom twenty years later. It just took a while for spring to come back. 🌺
There is a natural ebb and flow to innovation and progress in our discipline. And good ideas genuinely take many decades to progress to adoption.

Typed functional programming is a still an amazing idea, it just may be in a for a bit of lull in progress while new ideas flower.
There are a lot of great ideas in FP that are still in the "just off the paper" kind of stage that are going to be bloom in like 10-12 years. Think of all the amazing work in Idris2, OCaml Effect Handlers, Lean4 etc that's still kind of finding applications.
Read 9 tweets
3 Jan
Stephen, why are you so critical of Facebook and not the other big tech companies?

A 🧵 for well-intentioned engineers about how to navigate the complexities of big tech.
There's a simple inescapable truth about the distinction in kind between Facebook and the others.

Google could fix its content moderation and stop its military contracts and its business model would still be Google. (1/)
Apple could fix up its supply chain, raises the unit prices on its products for more sustainable and environmentally sound sourcing, and its business model would still be Apple. (2/)
Read 15 tweets
2 Jan
LLVM is really great for languages that to first approximation are sugar on top of C (like C++, Rust, Swift etc). If you don't use System V calling convention, have non-standard register use, closures, or objects with dynamic lifetimes then it's basically just a clever assembler.
It's absurd to propose that somehow LLVM has solved compiler backends (because of Rust handwaving), because it absolutely hasn't. It's an amazing toolchain but it is by no means the end of history and most of the interesting work is still open problems for the non-C family.
You can get quite far with the approach where you write the whole runtime in C, compile out to IR and then let the interprocedural optimizer and LTO have at the final artifacts. But that's very brittle about guaranteeing performance and has a ton of compile-time overhead.
Read 4 tweets
3 Nov 20
So let's finally talk about Coinbase. Let's not mince words ... they are a venture-funded gambling company. (1/)
But Stephen, Aren't they a bitcoin exchange?
Yes they are. And bitcoin IS a gambling product. It has no fundamentals, no exposure to the economy and trading it is a negative sum activity. It is a greater fools gold. (2/)
When you invest in a non-productive asset that isn't tied to any economic activity, the only thing you can do is try to find someone dumber than you to pay more for it. Nothing of value is created in this transaction. (3/)
Read 13 tweets
27 Oct 20
So let's talk about "no-code" this morning. Sure, it's a silly buzzword and pretty much every time our industry has tried this for the last 30 years it's always ended badly. But why? (1/)
We can go back to the IT literature from back in the 2000s and it was clear that Forrester et al thought that developers were soon going to be a thing of the past. Frame-based development and GUIs would enable management to simply encode their business intent directly. (2/)
Truth has a way of asserting itself and in hindsight the entire premise was absurd. The most succesful examples from that era were things like FrontPage ... which in hindsight was a generally terrible idea. (3/)
Read 10 tweets

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