Let's talk about how crypto mining is hurting cloud computing and driving up the costs of the internet for everyone. (1/) 🧵
Cloud computing is in essence selling compute time on servers you that you rent and can customise, but don't own. Because of economies of scale Google and Amazon can run a better, faster, more reliable data centre than their users can. (2/)
SaaS (Software as a Service) are companies that offer software services that build on top cheap cloud computing servers. Many of these services involve testing or running custom business logic on behalf of users. (3/)
Baked into these service is the notion that you have to take arbitrary code from your users, which could do literally anything, and run it on servers that you purchase from Amazon or Google on behalf of your customers. (4/)
And this is where cryptocurrency has invented a whole new type of abuse. Malicious "customers" are now hijacking many services to run their miners on the company's dime. (5/)
This is particularly widespread in the Continuous Integration subsector of SaaS companies where these companies offer developer tools allowing their clients to integrate and test code with other developers. (6/)
Companies that used to offer free or discounted services for open source projects are forced to shutdown their free tiers in order to prevent massive amounts of signups from abusive users. (7/)
It also drives up the server costs for legitimate companies that offer essential services to their customers, forcing them to pass on those costs to their honest legitimate users. (8/)
Or the companies are forced to implement laborious controls and monitoring on compute time that destroy the usability of their product and hurt their company's growth and business model. (9/)
The cryptopaths are now playing an extremely sophisticated game of cat and mouse across multiple service vendors, all for the sole purpose of trying to squeeze out as many free compute cycles as they can to mine on someone else's dime. (10/)
Many have written about how crypto investments are a regressive tax on the poor and financially illiterate.

However this is now starting to boil over into other sectors of the economy and are now a tax on all of society for even using GPUS and cloud computing at all. (11/)
This is not a sustainable path, and at the moment there seems to be no technical solution to the problem from within our industry.

The only actions that can help mitigate this threat must come from regulators and policy makers cracking down on crypto through legislation.


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More from @smdiehl

5 Aug
Let's talk about the world's longest running Ponzi scheme, MMM, which has been running in some form for 32 years. And the uncanny similarities to crypto investments. (1/)🧵
Like so many of these stories go, when countries have a major shift in their economic model or political upheaval there is a vacuum left by non-functioning institutions and fraudsters come out of the woodwork to defraud the public. (2/)
Albania saw this in 1997 when it moved from a communist system to a market economy and the massive proliferation of pyramid schemes collapsed the economy and drove the country into civil war. (3/)
Read 17 tweets
22 Jul
Let's talk about the mechanism by which government regulation will effectively kill cryptocurrency. 🧵
Seems inevitable at this point that the US government and EU are going to clamp down hard on cryptocurrency because of three recent developments: (2/)
1) The ransomware pandemic is starting to threaten national security

2) Elon's wake of destruction caused hundreds of thousands of citizens to lose their life savings, and they're complaining to consumer protection bodies

3) Potential systemic risk to traditional markets

Read 19 tweets
18 Jul
It may surprise people, but I actually have zero issues with a digital money market fund that theoretically used a cryptographic ledger for tracking investor holdings. Effectively a regulated "stablecoin".
Now I do think these things would have to be highly regulated, because opaque MMFs and shadow banking were a big component of why things blew up in in 2008. And we don't want a repeat of that.
And if they were as transparent as traditional funds, reported their portfolio holdings, bought sensible paper, followed all the FinCEN guidelines on withdrawals and transfers, and were set up as proper legal entities (i.e. not in a Caribbean tax haven).

Read 6 tweets
16 Jul
I've been hammering on this point for quite some time, but it's worth repeating in the simplest English possible that you could explain to a twelve year old.

Cryptocurrencies aren't currencies. They're investments, and pretty bad ones at that.
They may have started out with that idea to be magical internet money, but that idea failed.

Now most people they treat it like an investment. People want to get more dollars than they put in.
Unlike investing in shares in a real company which does something in the world, buying a crypto token doesn't do anything.

It's like a casino chip.
Read 10 tweets
15 Jul
Thinking a lot about the Jackson Palmer thread on my commute home. It's is a scathing and brilliantly written synopsis of one man's soul searching and conclusion of thinking through the consequences of actions.

Takes a lot of courage to do that in public.
There are probably tens of thousands of other people in exactly the same situation, they found themselves in too deep in what is very much a echo bubble that reinforces the normality of these scams and they just don't have anyone yet in their lives to convince them otherwise.
It takes a fair bit of research at the intersection of some very disparate fields to understand the core of why crypto is so harmful to society.

It's important to give people time and space to reach those conclusions. It's very much like cult or MLM deprogramming in some sense.
Read 6 tweets
15 Jul
I don't think it's widespread public knowledge how social media companies try and fail to protect against employees prying on users. But it's a lot more widespread than the public knows and it here's how it happens... 🧵
So basically social media companies have giant databases that store user accounts, messages, profiles and these are separate tables in the databases. Associated with each user is something called a primary key or unique user identifier.
Access to the databases for rank and file employees usually has some "safety pre-processor" where all queries (written in a language called SQL) are sent to it are scanned to determine if they are looking up a specific individual or doing bulk queries.
Read 7 tweets

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