One reason for this dynamic is payoff asymmetry: you can fairly easily point to who benefits if crypto achieves the dreams of its boosters, and the mechanisms by which they benefit.
Can you sketch out who benefits and mechanically now for skeptics?
*how
Some people I respect have said, effectively, “You’re staking an awful lot of career capital on loud crypto skepticism. In a future where you are unambiguously right, what do you get out of it besides HN karma?”
(Catastrophic failure to understand my utility function.)
Having had a couple of years to ponder this issue in the interim, I don’t think I disagree with what I said below.
Some of my closest friends would say this is the thing I’m most wrong and most obviously wrong about.
Obligatory disclaimer, which alludes to some of the issues mentioned in the post: I have a great deal of opinions on a great many topics and the ones I write on Twitter are not (necessarily) those of my employer.
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A repeated experience in working in infrastructure:
As a civilian, you assume civilisation has long since solved X.
You then find out that it has not, and instead there has been a bandaid over X, for 40 years. That bandaid is mindblowingly... words do not describe it.
And then you think "Maybe the experts here know something about it that I do not. Here, let me ask." And so you do. And they say, yes, we know the bandaid is a terrible kludge, but we are worried that it will summon an eldritch horror from beyond spacetime if we think too hard.
And then you think "I mean, eldritch horrors from beyond spacetime seem a little unlikely. How bad could it actually be?"
And then the expert says "Oh it could lead to food riots in Kansas if this system goes down for more than an hour."
Torn between “not really thrilled by gotcha journalism in general” and “forcing people to evaluate hard tradeoffs concretely versus abstractly best way to make sure that some evaluation of tradeoffs happens.”
No subtweet rule: this is about pandemic policy, specific subgenre the politicians who violate generally applicable restrictions on liberty designed to improve population-wide health outcomes such as e.g. the SF mayor violating the mask ordinance, and the discourse about it.
As somebody who was and is very much on team Smash The Big Red Button This Is Very Bad, I wish there was some acknowledgement that the policy regimes implemented have constrained liberty to a degree that I would have had difficulty imagining a few years ago, largely w/o debate.
X, who very plausibly *has never set foot in the United States*, then talks to a lawyer as to how to avoid these actual life-impacting issues which were literally designed to hurt “fatcats and fatcats alone”, and is told the only pathway is to renounce U.S. citizenship.
“Simple solution: we mandate that our legislation has no second-order consequences that we don’t want!” is an unfortunately popular point of view on this.
(CS fans may note that this requires a solution to the halting problem.)
“Still worried about Mohammed, Patrick.”
So one of the many pathways by which this happens: the Bank Secrets Act obligates financial institutions to file a Suspicious Activity Report (SAR) for any of a long list of predicates, including a generic “Something looks fishy.”
The $64,000 question in crypto lending is “Whose equity takes losses and how much of it is there to support the loan book?” and the community seems to think the answer is “What is equity and why would you need it for an overcollateralized loan?”
Forgive me for making this seem really simple but:
Borrower: I want to borrow $60k.
Lender: I will need to custody $90k BTC against that.
Borrower: No worries.
Lender: Purpose?
Borrower: Buying Bitcoin naturally.
Lender: Naturally. I will lend out the collateral.
Borrower: Cool.
There are a lot of things you could say about that structure but “It seems to be totally hedged against all plausible moves in the price of BTC” is not one of those things.
Under the hood this is doing intelligent location of the customer and running your product against a curated DB of the (truly, truly complex) tax jurisdictions and rates by product category state-of-play.
The thing it does not solve is making it truly end-to-end, where in addition to knowing how much money Chicago would charge for a hotdog if it was cooked on the premises for consumption off, at some point Chicago will want some data and some money.
There are a *lot* of services business which have this quality of being heavily, heavily networked on the customer side. This one has the additional wrinkle of having power law economics.
The reason no large player has cornered it yet is that they believe, accurately from their perception of the world, that the IPO/etc is a discontinuous event in someone’s life and an opportunity to sell someone services, and so they didn’t need to nurture 100X clients to there.
I think what most people aesthetically want is a boutique firm that has small N partners, personal service, and a few hundred clients with say starting balances of $100k AUM or less (“a thirty something’s IRA in tech”).
But but but boutique has this problem in year 8-15: