AI Is Starting to Look Like the Dot Com Bubble
AI Is Starting to Look Like the Dot Com Bubble
As the AI market continues to balloon, experts are warning that its VC-driven rise is eerily similar to that of the dot com bubble.
As the AI market continues to balloon, experts are warning that its VC-driven rise is eerily similar to that of the dot com bubble.
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Did you mean the crypto/NFT bubble?
Yeah I was going to say VC throwing money at the newest fad isn't anything new, in fact startups strive exploit the fuck out of it. No need to actually implement the fad tech, you just need to technobabble the magic words and a VC is like "here have 2 million dollars".
In our own company we half joked about calling a relatively simple decision flow in our back end an "AI system".
crypto and nft have nothing to do with AI, though. Investing in AI properly is like investing in Apple in the early 90's.
ultimately it won't matter because if we get AGI, which is the whole point of investing in AI, stocks will become worthless.
"stock will become worthless"
I'm thinking the opposite might happen.
If big companies succeed in capturing the knowledge workers market share and transferring all those salaries into their own profits then it will be reflected in the stock prices of those big companies. People, mostly currently rich people, who own those stock will benefit.
Same as it ever was for other forms of automation or job outsourcing. Why would this be any different?
They meant in the sense that crypto/nft was the last fad that VCs were throwing money at.
It's actually hilariously transparent how dumb VCs are and how much tech companies exploit that. Every now and then they randomly get hyped by some big tech company over some 'new' Y idea, then suddenly they throw money at any company suggesting they are doing Y thinking they will be the next Google or Meta. Then they inevitably doesn't materialise and they move onto the next fad.
Through the years I've been in the industry we've had Big Data, followed by AI, followed by Cloud, followed by blockchain, followed by nfts, followed by metaverse and now back to AI again. And the tech companies don't even need to implement any of this they just have to find a way to spin what they are doing to make it sound like the fad is what they're doing.
NFTs yes but crypto is absolutely not a bubble. People are saying that for decades now and it hasn't been truth. Yes there are shitcoins, just like shitstocks. But in general, it's definitely not a bubble but an alternative investing method beside stocks, gold etc.
Crypto is 100% a bubble. It's not an investment so much as a ponzi, sure you can dump money into it and maybe even make money, doesn't mean it doesn't collapse on a whim when someone else decides to dip out or the government shuts it down. Its value is exactly that of NFT's because it's basically identical, just a string of characters showing "ownership" of something intangible
Whatever man, used electricity will become valuable someday, I just know it.
Being able to pay for things anonymously is very valuable to me and to many other people. That's just one example of what this technology can be used for.
Bitcoin isn't anonymous yet it's the most valuable crypto. Monero is barely used. Most crypto people just want to get rich, they don't actually care about using it.
100% a bubble
I could go to the local ATM and buy Bitcoin anonymously right now. So, unlike a credit card, it can be used anonymously. Monero is better of course and it doesn't matter how many people use it. Even if a store doesn't accept it directly, you can use it to buy gift cards for any store.
I don't care what most crypto people do, it's irrelevant, just like the price is irrelevant and doesn't affect my ability to use this technology.
I could go to the local ATM and buy Bitcoin anonymously right now So you walk around the city with your face covered, only buy stuff with cash, and never ride in your personally owned vehicle or the vehicle of a friend?
The ATM has a transaction time and your bitcoin transaction record. There are enough cameras in the cities near ATMs (for this very reason) that you can be tracked if the government found you as interesting as you think you might be.
This person probably thinks venmo is anonymous too.
You'd be better off going to the ATM and getting cash and then using that cash for your purchase if you wanted to remain anonymous.
Bitcoin keeps a transaction log that's integral to the technology behind it, and is retained longer than fucking Chase Manhattan transaction logs.
That's called 'cash.'
And for online payments?
Mail cash in an envelope if you're that concerned about it.
I know of only ProtonMail which lets you mail money.
It's not even a ponzi scheme, it's just a good old fashioned bubble.
It's digital tulips.
NFTs yes but crypto is absolutely not a bubble. People are saying that for decades now and it hasn’t been truth. Yes there are shitcoins, just like shitstocks. But in general, it’s definitely not a bubble but an alternative investing method beside stocks, gold etc.
What is the underlying mechanism that increases its value, like company earnings are to stocks? Otherwise, it's just a reverse funnel scheme.
What's the underlying mechanism that gives money a value? We the humans give money and gold a value because we believe they're valuable. Same with crypto. Bitcoin is literally like gold but digital. Stop saying what everyone without knowledge says and inform yourself. Not only about crypto, also about money etc.
If you don't understand the fundamentals of money, how can you judge something of being scam. There are lot of people here who didn't even understand how money and gold works.
Money has value insofar as governments use it to collect tax - so long as there's a tax obligation, there's a mandated demand for that currency and it has some value. Between different currencies, the value is determined based upon the demand for that currency, which is essentially tied to how much business is done in that currency (eg if a country sells goods in its own currency, demand for that currency goes up and so does it's value).
This is not the same for crypto, there are no governments collecting tax with it so it does not have induced demand. The value of crypto is 100% speculative, which is fine for something that is used as currency, but imo a terrible vehicle for investment.
I don't know if it's good investment or not, but cryptocurrency has uses that are valuable to a lot of people. You can send money to other people without using a bank or PayPal and you can pay for things online anonymously. Some cryptocurrencies might have additional properties like Monero, which also gives you privacy. NFT might also have practical uses some day - for example it could be used for concert tickets.
Did ChatGPT write your comment?
Do you not have anything constructive to say?
About Bitcoin? Hell no I don't.
You are right in that it increases people's belief in money because it is the primary source of revenue for states. But if the majority of people did not believe in the piece of paper, it would be worth nothing. That is the fundamental value of money as we know it.
There have been states where stones were the currency simply because the inhabitants believed in them.
Gold Standard
Linking money to a material with intrinsic value for it's value
Gold has intrinsic value
US Dollar moved to be a Fiat Currency
US Dollar is backed by a Government
Crypto has zero intrinsic value, not linked to anything with intrinsic value, and not backed by a Government
Crypto is an imaginary "item" some people want to have valve. Value is created because of this want.
US Dollar is legal tinder for all US debts, Crypto is not
Crypto is not a currency but a digital commodity
Money and gold have value because they can be exchanged easily for goods and services that are really wanted. As long as crypto currencies make it hard to trade for goods ands services, they will be, at best, a fad, at worst, a scam. There needs to be market for crypto to work. All I see is promises, no real commitments to it.
All I ever see around crypto is this vague notion that it could someday be acknowledged and used widely as real money is. But so could bottle caps. I don't see the mechanism for how it realistically happens. It's no less a moonshot than it was 3 years ago, IMO.
Just because a lot of people are buying into crypto doesn't make the underlying inefficiencies in its design (depending on the coin) disappear and make way for common usage. As it stands now, cryptocurrencies are basically glorified ponzi schemes. The people nonstop defending them deserve to be treated with constant skepticism because they have skin in the game and know there's nothing preventing them from losing it all. It's in their best interest to believe in it and spread that belief.
You are forgetting that cryptocurrency has real uses. You can send money to people without using a bank or PayPal. I use it to pay for things online anonymously and being able to do that is very valuable to me and to other people. You can use crypto to buy a gift card for any store if they don't accept crypto directly.
I have nothing to gain by saying this, since I don't keep any significant amount of money in crypto. I don't care what the price of Bitcoin or another coin is. It's irrelevant and doesn't affect my ability to use this technology.
Cryptocurrency is not a scam. It's just a distributed ledger.
Anonymous...
Distributed ledger...
It's not really anonymous.
John Smith or 253832893 means exactly the same thing without more context. The only way you can tell you have the right John Smith is because we have 253-83-2893 as a social security number (lol social security system).
But if I see 253832893 on the Crypto ledger, I know 253832893 made a transaction. It could say John Smith and I'd be basically in the same spot of figuring out who it was.
Now, if 253832893 wallet paid a home mortgage for John Smith with Crypto, then I'd be closer to figure out who owns 253832893 wallet.
The whole point to Crypto is the block chain and the fact that they are very traceable.
Crypto can be anonymous if you're smart and you don't link yourself to your wallet. But once you are linked to a wallet, it is far from anonymous.
If John Smith wanted to sell me cocaine. Handing him cash is basically untraceable and anonymous. Sending him Crypto ties my wallet to his wallet with a transaction. If the cops seized his wallet and somehow figured out my wallet, they could tell every single time I purchased cocaine from him.
Yes, you can do your best to keep your name unlinked to your wallet number. But it's not foolproof. For example, if I was buying cocaine I wouldn't use my main Crypto wallet but a side wallet. If you only used it to pay for cocaine and filled the side wallet in an untraceable way. It's pretty anonymous.
But to those people that fill their Crypto wallets with their bank account and just think they are anonymous, they have another thing coming if someone wants to trace them.
Gold does not have intrinsic value. It is merely scarce (relatively speaking). The value of gold fluctuates all the time.
Intrinsic - belonging naturally; essential
Gold has physical applications that are needed
Even if people didn't want it because of the looks, gold would still be needed to make things
Gold has intrinsic value because it is always going to be worth something
Gold is never going to be worthless. That's it intrinsic value.
Much of gold's value (certainly before the ending of the Gold Standard) was totally subjective. It looks pretty. Being rare and pretty gave it value.
I suppose you could tie some sort of value to technical application, but it isn't intrinsic to gold itself. If society collapses tomorrow, gold isn't suddenly going to be currency.
Yes much of gold's value comes from the way it looks. Not disputing that.
I suppose you could tie some sort of value to technical application, but it isn't intrinsic to gold itself
It is
Gold has properties that are unique. You can't just use iron as a replacement. Apple can't be like, "You know gold is expensive, I think we will just use cheap iron in our phones instead". Not going to work out. There is a demand for gold over it just looking pretty.
This technical application is what gives gold it's intrinsic value
Even if that value is really low it's always going to be something
Well not always because, like you said, if society collapsed, Apple wouldn't need to make phones. But at that point, all economic stuff is out the window. It would have to go through a bartering system until some kind of currency system could get started again. Eventually gold will be needed again. So really it still has value just not at the time.
legal tinder
I recall hearing it was illegal to burn money 😉
Money is a physical representation of the concept of value. Saying "what gives money value" is like asking "why does rain make clouds."
This is why printing money decreases the value of the currency - the value it represents has not changed so the value is diluted across the currency as the amount of currency expands.
What’s the underlying mechanism that gives money a value?
A) the government backing it up along with its advanced military
B) the fact that you have to pay taxes in it
Yep, which is why Bitcoin can't last forever without turning into some sort of GovCoin for it to truly replace money
The only way for someone to make money in crypto is for someone else to lose it.
Crypto is a scam.
Reminds me of money.
What is that even suppose to mean in this context?
So what's the difference to money, stocks or every other investing option? There's has to be someone who loses so someone different can win. We're living in a capitalistic system, that's how it works.
Money isn't an investment, it's a currency. Of course it's a bad investment and investing in forex is barely a better investment than crypto (purely because there's less risk of a sovereign currency devaluing to 0).
Investing in capital, like stocks, property, equipment etc does not require someone to lose money for the capital owner to profit. If I invest in a stock, each year I'm paid a dividend based on the profits of that organisation - no losers required. I could later sell that stock at the exact price I paid for it and come away with profit from those dividends. What determines whether it's a good or bad investment, is the ratio of profit to the capital owner compared to cost of the asset. Crypto generates 0 profit, so it has 0 value as a capital investment.
Every crypto trader that is clueless about actual investing thinks that dividends don't exist.
Stocks pay dividends to their shareholders. Stocks also represent portions of companies that make other things.
Basically you're saying that crypto is like a shitty stock that doesn't pay dividends, doesn't generate a profit, makes nothing, is not actually valuable, and is only worth what you can sucker someone else into paying for it. I agree.
But I also wouldn't "invest" in such a stock.
Sooooo, the exact same premise with ehmmmm.... Stocks.
You don't understand how stocks work.
How is distributed ledger a scam? It's nothing new and we know exactly how it works. It has nothing to do with making money. If I use it to pay for things online how am I getting scammed? I'm sorry, but it seems you don't fully understand what this technology is.
The blazing fast technology that allows for up to 7 transactions a second worldwide? Amazing.
Don't forget to pay your capital gains tax when you sell your butts online to buy your pizza.
The slow transaction speed is a valid criticism, but it doesn't make this technology a scam. Different cryptocurrencies have different speeds. With Litecoin I think it takes me 40 minutes to pay for something. I still prefer that over being tracked by my bank or having to use PayPal. I think you can pay instantly with Dash, but I haven't used it.
I don't sell anything online, so what are you talking about?
having to use PayPal
I don't think you'll find most people have such a vendetta against PayPal or venmo that they'll use some other alternative banking system to avoid using it.
That's not a feature... especially if it's worse than PayPal.
I don’t think you’ll find most people have such a vendetta against PayPal or venmo that they’ll use some other alternative banking system to avoid using it.
You might be right about that, but why would it matter what most people do?
That’s not a feature… especially if it’s worse than PayPal.
It offers better privacy than PayPal and that's what matters to me. Oh and nobody can lock me out of my account.
I think people are using the word scam not in it's strictest sense - that is to say, I don't think Satoshi personally invented BTC to defraud everyone who bought it so in that sense, no, it is not a scam technically. A better way to describe it would be via the greater fool theory: the only way to make money is to find someone even more foolish than yourself to buy it.
Crypto as it is currently implemented is inefficient, riddled with problems, and is deflationary which you can argue about but most economists would say deflationary currencies are bad as they lead to shrinking economies and do not encourage investment.
There also aren't that many problems that it 'solves' that aren't already solvable by existing tech. And even in the case of things it's useful for, if it were to be widely adopted the 'benefits' would be overshadowed by the massive new problems that would be created.
I think crypto will always have a niche, especially for black markers. I don't think anything similar to currently existing crypto currencies will ever be adopted for widespread use as legal tender.
And as the other commenter pointed out, the tax situation is a nightmare. Even if you don't sell online yourself, that's a big hurdle to crypto achieving what many supporters claim it can do.
A better way to describe it would be via the greater fool theory: the only way to make money is to find someone even more foolish than yourself to buy it.
Cryptocurrency is not about making money. It's a distributed ledger. Technology like that could maybe be a scam if it didn't do what its creators claim it does. But it's been around for a long time and we know exactly how it works.
Crypto as it is currently implemented is inefficient, riddled with problems, and is deflationary which you can argue about but most economists would say deflationary currencies are bad as they lead to shrinking economies and do not encourage investment.
It has problems, but like every technology it keeps improving. I choose to use it despite its flaws and will probably use it even more in the future.
There also aren’t that many problems that it ‘solves’ that aren’t already solvable by existing tech.
It gives me privacy and anonymity when paying online. No other online payment technology does. It also doesn't require trust, since it's decentralized. I'm not aware of any other technology that solves those problems.
I think crypto will always have a niche, especially for black markers. I don’t think anything similar to currently existing crypto currencies will ever be adopted for widespread use as legal tender.
That's possible, but over time it is accepted by more and more stores. So it keeps growing. But even if it didn't, you can use crypto to buy gift cards for any store. It doesn't have to be popular.
And as the other commenter pointed out, the tax situation is a nightmare. Even if you don’t sell online yourself, that’s a big hurdle to crypto achieving what many supporters claim it can do.
When someone wants to invest in crypto, I can see how that could be a problem. I just use it to pay for things online.
Cryptocurrency is not about making money. It's a distributed ledger. Technology like that could maybe be a scam if it didn't do what its creators claim it does. But it's been around for a long time and we know exactly how it works.
I would venture that the majority of people see it as an investment of one sort or another. I think the insane market cap, and the devestating effect the recent crash had on its reputation and use, are evidence of that.
It has problems, but like every technology it keeps improving. I choose to use it despite its flaws and will probably use it even more in the future.
Most cryptos have fundamental problems that I don't see being fixed, eg it's deflationary properties, BTC's wasteful PoW, ETH skirting/crossing the boundary of being a security, etc.
It gives me privacy and anonymity when paying online. No other online payment technology does. It also doesn't require trust, since it's decentralized. I'm not aware of any other technology that solves those problems.
This is like the one thing they are good for, and Monero is the best at it. This is an arguable point though, others may say that this is a negative due to the implications and governments have cracked down on privacy enhancing tools like Tornado Cash for this reason. I personally value privacy to an extent, but do not see the need in my life to use Monero. I certainly wouldn't fault you for using it, though.
That's possible, but over time it is accepted by more and more stores. So it keeps growing. But even if it didn't, you can use crypto to buy gift cards for any store. It doesn't have to be popular.
I think adoption has stagnated. And look at El Salvador, they basically had to force crypto on the populace and they use their own proprietary wallet, nullifying privacy benefits. And again, it is treated as an investment by the government there who are buying BTC to speculate.
When someone wants to invest in crypto, I can see how that could be a problem. I just use it to pay for things online.
Yeh this is dependant on your country. Here in Australia every crypto transaction is a capital gains event 🙄
I would venture that the majority of people see it as an investment of one sort or another. I think the insane market cap, and the devestating effect the recent crash had on its reputation and use, are evidence of that.
You are right, but it doesn't matter what most people think. I mean we should educate them about it, but their opinion is irrelevant.
Most cryptos have fundamental problems that I don’t see being fixed, eg it’s deflationary properties, BTC’s wasteful PoW, ETH skirting/crossing the boundary of being a security, etc.
Etherum has already switched from proof of work algorithm to less wasteful proof of stake. So it seems that at least that problem can be solved.
This is like the one thing they are good for, and Monero is the best at it. This is an arguable point though, others may say that this is a negative due to the implications and governments have cracked down on privacy enhancing tools like Tornado Cash for this reason. I personally value privacy to an extent, but do not see the need in my life to use Monero. I certainly wouldn’t fault you for using it, though.
You should be able to buy any of the popular cryptocurrencies anonymously. They won't make your payment history private like Monero does, but you will still be anonymous when paying.
I think adoption has stagnated. And look at El Salvador, they basically had to force crypto on the populace and they use their own proprietary wallet, nullifying privacy benefits. And again, it is treated as an investment by the government there who are buying BTC to speculate.
I don't know exact stats, but it's bigger than I expected before I started looking into it. There are a lot of crypto ATMs now in cities, which you can see at https://coinatmradar.com. There are also some stores and restaurants that accept crypto, especially in the US (https://coinmap.org/view). You can also find some online services on https://cryptwerk.com. El Salvador is certainly messed up. Bitcoin probably isn't even a good choice, because of its big transaction fees. Other cryptocurrencies are faster, can handle more transactions and have smaller fees.
Yeh this is dependant on your country. Here in Australia every crypto transaction is a capital gains event 🙄
Damn, that's crazy. So you can't even buy something without paying an extra tax?
That video is probably the biggest piece of misinformation about cryptocurrency on YouTube and it's sad to see that so many people have been fooled by it. Most people are so bad at understanding modern technology that they will believe a random youtuber who has no idea what he is talking about :(.
Cryptocurrency is just a distributed ledger. NFT is just a certificate of ownership. Those technologies have real uses and nothing about them makes them a scam.
This is being disingenuous. They are more than just distributed ledgers or certificates of ownership. You are ignoring that crypto is proposed as a viable alternative to the financial system. They are both often promoted as 'investments', when there is rarely any underlying value behind them.
Your response is exactly the kind of handwaving that commonly pervades tech companies and led to crypto being popularized as a financial product. The reality is a lot more complicated, and for that reason there are a lot of problems that stop them being as useful or valuable as people want them to be.
If you have specific arguments against the Line Goes Up video I'd be interested to hear them, as I thought it was quite a good take.
Cryptocurrency has properties that are valuable to its users. It can let you pay online anonymously. It's decentralized and doesn't require trusting a bank or some company. I use it for those reasons. So it is useful, but the author of the video doesn't even know that.
They are both often promoted as ‘investments’
But that's not what they are made for. People can use them as investments if they wish and gamble with their money, but that says nothing about this technology, since it's not its purpose. If you want to warn people about the risks of such investment, I approve. But calling cryptocurrency or NFT a scam is wrong and doesn't make any sense.
Your response is exactly the kind of handwaving that commonly pervades tech companies and led to crypto being popularized as a financial product. The reality is a lot more complicated, and for that reason there are a lot of problems that stop them being as useful or valuable as people want them to be.
So what do you want to criticize exactly? The technology? Fine, but then you need to understand how it works and you probably should use it at least once. Or do you want to criticize people gambling with their money? That is also fine, but then it has nothing to do with the technology itself. In that case naming the video "The Problem With NFTs" would be misleading.
If you have specific arguments against the Line Goes Up video I’d be interested to hear them, as I thought it was quite a good take.
I rewatched a few chapters just now, but let's focus on the Bitcoin chapter. The video contains a few valid criticisms, but they are mixed with a lot of incorrect information, invalid comparisons, false statements and author's personal opinions. He omits a lot of facts, which makes it clear he doesn't understand the subjects he is discussing.
Chapter 1 - Bitcoin (07:09)
08:35 He says that talking about cryptocurrencies requires discussing technical details and terminology, which is partially created to be "deliberately obtuse to make them difficult to understand and thus appear more legitimate". The author seems to believe that there is some kind of conspiracy of programmers to often make it difficult to understand technology on purpose, but he fails to provide even one example of this. It's a ridiculous accusation. Modern technology is just complicated and takes time to understand for non-technical people.
10:25 He claims that the only commercial use for Bitcoin is black markets, which is false. There are stores that accept Bitcoin and if they don't, you can use Bitcoin to buy gift cards for any store (there are websites that sell them). People who actually buy illegal things online don't even use Bitcoin, because of its public transaction history. They use Monero. The author is stuck in 2009.
11:08 "Bitcoin was never designed to solve the problems created by the banking industry" - it's a trust-less system, so it has already solved at least one problem - the problem of trust when handling transactions. I can send money to anyone in the world without an intermediary.
11:30 "change of the guard is an illusion" - he is listing some rich people who use cryptocurrency. This it not an argument for anything. It's irrelevant who uses cryptocurrency and what their beliefs are.
12:35 He says that some of the larger institutional holders of cryptocurrency are the same investment banks, which created the market crash. He doesn't explain why this is relevant, but I suspect he means that because of this it's not safe to keep any significant amount of money in crypto. In that case it might be a good point, but having large amounts of money in crypto is not required in order to use it.
15:30 Proof of work algorithm makes it difficult for poor people to mine Bitcoin. That is true, but mining is not the only way to get Bitcoin. Other than buying it with cash, people could also receive crypto as payment for their work.
16:45 He is comparing the energy consumption required for global usage of Bitcoin to local energy usage of a small country. This is not a valid comparison. He should have compared it to other global industries like banking or gaming.
17:10 He says that banking also requires a lot of power, but can handle more transactions. That is true, but Bitcoin is probably the slowest cryptocurrency. The other ones are still slower than VISA, but he should have mentioned that other coins are better in that area, because it's not 2009 anymore and technology keeps progressing. So his argument is correct here, but he forgot to mention other relevant facts.
17:45 He calls cryptocurrency users gambling addicts, which shows his bias. He doesn't understand that this technology can be used for online payments or for sending money to your friends. Bitcoin does use a lot of electricity, but so does gaming and that's just entertainment. That doesn't mean we should get rid of it.
He also completely forgot to mention in both his Bitcoin and Etherum chapters that proof of work is not the only used algorithm. Etherum doesn't use proof of work anymore, so it doesn't use as much power. This shows that the problem of power usage can be solved. Bitcoin is not the only cryptocurrency and technology keeps improving. But this didn't stop the author from saying that Etherum doesn't solve any problems with Bitcoin at the end of Etherum chapter (24:17). The switch to proof of stake algorithm happened after the video has been released, but he knew it was gonna happen, which he mentioned at the end of chapter 8 (1:31:29). Yet he refused to believe that it would happen, because of his bias. His prediction has failed, since it did eventually happen.
Chapter 8 "There Is No Privacy On The Chain" (1:25:36) is equally ridiculous. The author apparently hasn't heard of Monero. He also doesn't even understand what it means that something is decentralized.
Thanks for the reply, just wanted to let you know I did see it but I'm at work atm so can't address it. But I will come back and give a proper response, just wanted to say thank you for your effort 👌 I appreciate good discussions!
No problem, take your time :).
It's not, at all. Everything he states lines up with objective truth and provided supporting sources. He's also not a random YouTuber, he is a well established video essayist that's done equally good work clarifying the nonsense behind things like flat earthers.
This "random YouTuber" provides a two hour video, deeply supporting his argument. In contrast, you provide two sentences in a comment here with no detail or support.
Audience, you make up your minds on who seems full of shit!
I rewatched a few chapters just now, but let’s focus on the Bitcoin chapter. The video contains a few valid criticisms, but they are mixed with a lot of incorrect information, invalid comparisons, false statements and author’s personal opinions. He omits a lot of facts, which makes it clear he doesn’t understand the subjects he is discussing.
Chapter 1 - Bitcoin (07:09)
08:35 He says that talking about cryptocurrencies requires discussing technical details and terminology, which is partially created to be “deliberately obtuse to make them difficult to understand and thus appear more legitimate”. The author seems to believe that there is some kind of conspiracy of programmers to often make it difficult to understand technology on purpose, but he fails to provide even one example of this. It’s a ridiculous accusation. Modern technology is just complicated and takes time to understand for non-technical people.
10:25 He claims that the only commercial use for Bitcoin is black markets, which is false. There are stores that accept Bitcoin and if they don’t, you can use Bitcoin to buy gift cards for any store (there are websites that sell them). People who actually buy illegal things online don’t even use Bitcoin, because of its public transaction history. They use Monero. The author is stuck in 2009.
11:08 “Bitcoin was never designed to solve the problems created by the banking industry” - it’s a trust-less system, so it has already solved at least one problem - the problem of trust when handling transactions. I can send money to anyone in the world without an intermediary.
11:30 “change of the guard is an illusion” - he is listing some rich people who use cryptocurrency. This it not an argument for anything. It’s irrelevant who uses cryptocurrency and what their beliefs are.
12:35 He says that some of the larger institutional holders of cryptocurrency are the same investment banks, which created the market crash. He doesn’t explain why this is relevant, but I suspect he means that because of this it’s not safe to keep any significant amount of money in crypto. In that case it might be a good point, but having large amounts of money in crypto is not required in order to use it.
15:30 Proof of work algorithm makes it difficult for poor people to mine Bitcoin. That is true, but mining is not the only way to get Bitcoin. Other than buying it with cash, people could also receive crypto as payment for their work.
16:45 He is comparing the energy consumption required for global usage of Bitcoin to local energy usage of a small country. This is not a valid comparison. He should have compared it to other global industries like banking or gaming.
17:10 He says that banking also requires a lot of power, but can handle more transactions. That is true, but Bitcoin is probably the slowest cryptocurrency. The other ones are still slower than VISA, but he should have mentioned that other coins are better in that area, because it’s not 2009 anymore and technology keeps progressing. So his argument is correct here, but he forgot to mention other relevant facts.
17:45 He calls cryptocurrency users gambling addicts, which shows his bias. He doesn’t understand that this technology can be used for online payments or for sending money to your friends. Bitcoin does use a lot of electricity, but so does gaming and that’s just entertainment. That doesn’t mean we should get rid of it.
He also completely forgot to mention in both his Bitcoin and Etherum chapters that proof of work is not the only used algorithm. Etherum doesn’t use proof of work anymore, so it doesn’t use as much power. This shows that the problem of power usage can be solved. Bitcoin is not the only cryptocurrency and technology keeps improving. But this didn’t stop the author from saying that Etherum doesn’t solve any problems with Bitcoin at the end of Etherum chapter (24:17). The switch to proof of stake algorithm happened after the video has been released, but he knew it was gonna happen, which he mentioned at the end of chapter 8 (1:31:29). Yet he refused to believe that it would happen, because of his bias. His prediction has failed, since it did eventually happen.
Chapter 8 “There Is No Privacy On The Chain” (1:25:36) is equally ridiculous. The author apparently hasn’t heard of Monero. He also doesn’t even understand what it means that something is decentralized.