Thread by @swardley

X : How do we make cryptocurrency more environmentally friendly?
Me : Get rid of everything but CBDCs.
X : What if we change the consensus algorithm?
Me : That'll make crypotcurrencies less obscene but it won't make them environmentally friendly.

X : Why CBDC?
Me : At the heart of the environmental debate are the issues of inequality. To resolve this you'll need centralised authority. The current crop of decentralised cryptocurrencies have levels of inequality that are more obscene than we get with fiat currencies.

X : Can that not be resolved in the cryptocurrency itself?
Me : A system of greed which desires no central authority suddenly going "we should be responsible". That's right up there with "trickle down effect","the economy is a meritocracy" and "self regulation in finance"

X : I thought you were interested in DAOs and decentralised?
Me : I am. I have a great interest in decentralised structures driven by common purposes and principles. I have an interest in the use of specific tools (i.e. the market) for specific contexts ... but ...

... I have little interest in systems where the sole purpose of society is based upon greed and the magic pixie dust of philanthropy will somehow solve all problems.

X : You make it sound like bitcoin is evil.
Me : Bitcoin isn't evil, it's a technology, it's a weapon. It has a payload of laissez faire and a delivery mechanism of greed. The issue you need to tackle is whether the people involved are ... and that's a question of perspective.

i.e. Vincent de Gournay (18th century) argued for limitations on government intervention in the market. From a certain perspective of the 18th C then they wouldn't have described that as evil. From today's perspective given he was arguing for a global slave trade ... you would.

So, I understand why people get wrapped up in the whole system of greed but I think it's quite likely that from a future perspective it will be seen as nothing but evil.

X : A system of redistribution could be designed within a cryptocurrency.
Me : Of course and there have been various efforts around this in ethereum. But a system of greed won't voluntarily redistribute options, these will be edge cases.

X : Options?
Me : Wealth. Options are what wealth is, it's the purpose of wealth, the accumulation of options. The wealthier I am, the more options I have in any given context.

So a system that accumulates options under some power law distribution (i.e. a system of greed accumulating excessive wealth) is not going to start redistributing options (i.e. giving away money) especially when no central authority can efforce this (i.e. a Gov enforcing tax) ...

... all you can rely upon is philanthropy and that just reinforces a need to maintain an unequal system i.e. we need excessively wealthy people because if we didn't have this then who would give generous donations to build schools for the poor ... ad nauseum.

X : Bitcoin will fail?
Me : Oh no, not in the West. Our political systems are also captured by greed. Those cryptocurrencies are likely to flourish to obscene heights until they collapse the entire West - blog.gardeviance.org/2013/11/a-spoi… ... a dystopian future a la Elysium beckons.

X : The West?
Me : Yes. There are many things I disagree with China over but their moves to control cryptocurrencies, establishing a digital Yuan, use of the market as a tool not a purpose, focus on common infrastructure, high levels of situational awareness are ... spot on.

As it currently stands with the way the games are being played then ... the West ends up like Elysium and China ends up like the Star Trek Federation.

X : You're against blockchain technologies?
Me : No. I see many useful use cases. I'm opposed to specific implementations i.e. cryptocurrencies such as bitcoin.
X : But in favour of CBDC?
Me : Yes. Centralised authority seems necessary for redistribution mechanisms in the future.

X : What about Web3?
Me : I've expressed my view -

https://twitter.com/swardley/status/1472867974843441153

- "A set of worthwhile experiments being tightly coupled to specific forms of crypto for reasons of greed leading to a dystopian society of excessive control and inequality"

X : But this stuff is going to become succesful? You do realise that?
Me : Quite some time ago. In the West, I have no doubt that bitcoin and this vision of web3 will become financially huge much to the regret and horror of the majority of society - blog.gardeviance.org/2013/05/the-pu…

But this goes back to the Vincent de Gournay arguments for limitations on government intervention in the market.

As Adam Smith wrote about, Hayek reasserted and Keynes emphasised ... Gov is really, really, effing important to stop the worst excesses of humanity.

X : Vincent de Gournay?
Me : Laissez faire economist from the 18thC who wrote about the importance of slavery as an example of a global free market. A good introduction - aeon.co/essays/why-the…

If he was alive today, I'm sure he would love Ayn Rand and bitcoin as well.

X : But you're not against virtual worlds?
Me : Of course not. The future of work is mostly remote / virtual. I did a whole research project on how organisations were changing -

... the issues are not that we are moving to a more remote first world with distributed teams and leadership nor the use of blockchain technolgy nor CBDCs.

The problems stem from cryptocurrencies with specific economic ideologies embedded in them.

X : But Gov's commit some of the worst excesses.
Me : They do which is why representation is so important and systems of sortition maybe required because our political systems become corrupted by greed.

X : But some cryptocurrencies are trying to do good.

Me : Park any energy costs and claimed benefits. We need to ask three questions -
1) Can this be traded?
2) Is the associated value variable?
3) What mechanisms for future redistribution exist?

...

... 1)+2) will lead to power law distributions and inequality simply through the application of luck (later reinforced by starting position i.e. capital). See the work of Ole Peters.

3) is your counter to this.

If the system is likely to lead to greater inequality (i.e. no redistribution) then it'll help resolve environmental issues about as much as saying "we're not going to change or share our wealth but the rest of you can't improve your lifesytles because of climate"

and you can dress that up in anyway you like ... create financial instrument to price poor people out of using carbon including the magic pixie dust of offsets -

So, whatever "good" that a cryptocurrency is claimed to be doing, you need to consider the impact caused by increasing inequality if no redistribution mechanism is baked into it. As for philanthropy ... don't get me started, a self perpetuating excuse for inequality.

X : Have you seen the value of bitcoin has dropped recently?
Me : I don't keep tabs on it but to be clear, bitcoin has no value. There isn't even the illusion of value (i.e. a Gov and institutions behind it). All you have is the price people are willing to pay. Pure sentiment.

X : But that price keeps on growing.
Me : Except when it's not obviously. But it has to have a high price.
X : Why?
Me : Electricity isn't free ...

roughly ..
700kWh per transaction
price per kWh (Ukraine)- $0.06
total cost per transaction $42
2,000 transaction per block
total cost per block - $84k of electricity
each block pays roughly 6 bitcoins
each btc > $14k just to cover the power consumption.

Whilst it has no value (there isn't even an illusion of value through institutions), there is a price which people will pay and that price has to be high to cover growing power needs. As your pension funds and banks get onboard, they will do anything to keep it going. See CDO.

Well ... except even CDOs had a notion of value in there was supposed to be a property at the end of the chain. This is pure sentiment.

X : Is bitcoin a ponzi scheme?
Me : Oh no. Well, I sometimes daydream that a bunch of circumstances occur which turn into a Madoff style ponzi scheme but that's highly unlikely. It's far more likely that we suffer the truly horrible situation of bitcoin succeeding.

X : I don't get you. Are cryptocurrencies like bitcoin a good investment or not?
Me : For your wealth, on a balance of probabilities then yes. For society, then no.
X : So, a good thing then?
Me : Are you just blind to society? blog.gardeviance.org/2013/11/a-spoi…

X : We live in a dog eat dog world.
Me ; Ah, you mean you've been trained to believe that humans aren't social creatures. Good pet, do you want to play fetch? As I said, a delivery mechanism of greed and a payload of laissez faire.

X : The real rebels are building crypto.
Me : You are a sucker for advertising. The most hardened, pro capitalist, free market, laissez faire extremists are building crypto ... if they were rebels they would be building radical transparency and redistribution into it.