Some thoughts about bitcoin buzzwords and sifting through nonsense. This was going to be just a short comment along with the video about Rube Goldberg machines. But then I continued and went on a rant. I also repeatedly refer to Tone Vays and Chris DeRose because they constantly put out content challenging the hype in the world of bitcoin by using the magic of critical thought. How dare they? Don't they know the messengers of truth get shot?
Most altcoins, and virtually all of these initial coin offerings (ICO), are Rube Goldberg Machines. See Tone Vays confront a promoter with this question at a conference and then, of course, the person dances around the issue and says they don't think so...next question please:
https://twitter.com/mikeinspace/status/861924312445591554
- mikeinspace
Tone Vays calls out people's falsehoods and scams all the time:
https://twitter.com/ToneVays/status/863795311088734209
- ToneVays
Bitcoin maximalism makes sense because altcoins are called shitcoins for a reason. Chris DeRose breaks it down in this video:
Apparently, few people are able to cut through all the crypto, blockchain, mumbo-jumbo buzzwords, hype, bad ideas, misinformation and lies. I think more people need some critical thinking skills (learn here: https://www.youtube.com/channel/UCFLCAm7HCyw6DEY9jvOMTvA or http://criticalthinkeracademy.com).
Some people do make money with some shitcoins. Some people made a fortune on pump and dump/ICO scams...they’re the ones who got in low and and profited when they sold to the FOMO (fear of missing out) fools who are then left as bag holders. You end up as a bag holder when there are no more greater fools than yourself to sell to. But shitcoins don't measure up on basic fundamentals and that’s why they’re nothing in the long run. They’re not new or innovative technology. Recent example, Pascal coin hit Poloniex and skyrocketed. And descended. What does it really have going for it? It was short term speculative gambling/FOMO. A money maker for some and a money loser for the rest. The big gains of the winners have to come from someone. Outsized gains in a pump and dump require a larger amount of FOMO bag holders. People can learn from people like Chris DeRose and Tone Vays and anyone can go on their shows to challenge them. But a scam promoter has no reason to do that, the ignorant don't have anything to say, and the faithful just want to believe.
LOL...Look, with a little critical thinking let’s look at PascalCoin. Right from their website/brochure:
What is PascalCoin?
PascalCoin is a new cryptocurrency written from scratch, and is designed to work without an operations history, yet is able to control double spending or check balance. Instead of storing balances on the blockchain, PascalCoin offers a safebox system similar to a bank account.
Pascal Coin is a cryptocurrency for humans, not only for geeks
Since its account system is very similar to a bank account by design, PascalCoin is an easy to understand and easy to work with cryptocurrency. Through easy to remember account numbers instead of cryptographic addresses, everybody can have an overview of how it is designed.
Address example in Bitcoin: 16K3HCZRhFUtM8GdWRcfKeaa6KsuyxZaYk
Account example in PascalCoin: 12345-54
So at least they’re kind of honest. It doesn’t get any easier than that. This isn’t a difficult example to see there’s no innovation. It’s a straight up bitcoin clone. But even a more challenging marketing effort can be debunked if you’re a careful and persistent critical thinker.
Dash "the Digital Trash" That's how Tone Vays calls it (
).https://twitter.com/ToneVays/status/864084226114715648
- ToneVays
A more challenging example to evaluate and resist the hype is Dash. Dash hired Amanda Johnson to promote the coin and she does a good job. She’s smart and articulate. But when it comes down to it, she’s just a promoter who drank the Kool-Aid on this particular coin. I’m not saying she’s a bad person. I think she’s a very nice, open and honest person. But with careful examination there isn’t anything there other than her cheerleading for everyone to jump on the Dash bandwagon. Again, that's not against her, but rather, it's a hard look at her statements or claims. Some people do lie, but I find when she's hard pressed she handles herself well and doesn't lie or become weaselly. I'm not bashing her I'm disagreeing with her position for a variety of reasons. As does Tone Vays and Chris DeRose.
Keep fundamental principles of bitcoin in mind when thinking about the crypto coin space.
Original paper on bitcoin: https://bitcoin.org/bitcoin.pdf
https://bitcoin.org/en/faq#what-is-bitcoin
https://bitcoin.org/en/resources
For example, if you always remember what a blockchain is and what the purpose of having it distributed is; you can often see the word "blockchain" is just used as a buzzword in marketing hype and/or used by people so they sound like they know what they're talking about. But keeping the fundamentals in mind you can know if what they're saying makes sense. And you will see how, often, it doesn't make sense.
Most of the time, when the word used is "blockchain" or "crypto currency"; the word being used should be "bitcoin." And if something other than bitcoin is the subject then you should ask yourself why. Then compare the answer to the fundamentals (what is a blockchain and bitcoin maximalism) and does this new information make any sense in regard to these fundamentals?
Does the use of a blockchain really make sense in a given scenario or use case? What is really being done that couldn't otherwise be done? How/why does bitcoin not function in this scenario?
If the word "database" or "spreadsheet" makes sense where the word "blockchain" is used then why aren't existing solutions the real answer in a given proposal? Especially since a blockchain is inefficient in many ways not the least being energy use. Can you verify a blockchain is even what is being sold/marketed/used? How do you know you're not being sold database software or spreadsheet software?
There are already ways to do grid computing, distributed computing, virtual machines, back-ups, file encryption, cryptographic signatures, authentication, version control, and on and on. So does a blockchain really make sense in a given scenario/product? Really? Even with all the electricity needed (expense) to run many distributed computers to constantly do number crunching to provide the security? Will there really be a large number of computers to run the network? Will they be widely and geographically distributed? These conditions are fundamental to blockchain security. This is why the bitcoin blockchain is the most secure and most valued. It has the most computers with the most worldwide distribution with the highest number of talented programmers and engineers maintaining and developing the code. Does this new blockchain proposal/product pass muster after these considerations? Almost always, the answer is no. No, blockchain doesn't make sense for all these things that are not bitcoin. The word "blockchain" is the current buzzword. Everything is being marketed as now built with blockchain baked in. You can charge more for pizza if it was made with blockchain technology.
Buying shitcoins isn't an investment. If I sell you muffins at my bake sale to raise funds for my business; are you a shareholder? No. But you did give me a donation of sorts. It's like a Kickstarter campaign without the middleman. A coin or token gives you no ownership. Buying shitcoins is gambling on a game of ponzi where you try not to be the last one holding the bag or a game of duck duck goose and you hope not to be left standing when there are no more chairs. Furthermore, selling and buying securities (which is what you're supposedly doing if you're buying or selling "tokens" for "investment" or "shares" in a business) doesn't negate the need for competency, proper due diligence, and legal compliance on the part of all parties involved just because you do it online or with new tools/tech.
In conclusion, the conclusion from the original proposal for bitcoin by Satoshi Nakamoto:
We have proposed a system for electronic transactions without relying on trust. We started with the usual framework of coins made from digital signatures, which provides strong control of ownership, but is incomplete without a way to prevent double-spending. To solve this, we proposed a peer-to-peer network using proof-of-work to record a public history of transactions that quickly becomes computationally impractical for an attacker to change if honest nodes control a majority of CPU power. The network is robust in its unstructured simplicity. Nodes work all at once with little coordination. They do not need to be identified, since messages are not routed to any particular place and only need to be delivered on a best effort basis. Nodes can leave and rejoin the network at will, accepting the proof-of-work chain as proof of what happened while they were gone. They vote with their CPU power, expressing their acceptance of valid blocks by working on extending them and rejecting invalid blocks by refusing to work on them. Any needed rules and incentives can be enforced with this consensus mechanism.
Additional reading:
The original paper on bitcoin: https://bitcoin.org/bitcoin.pdf
http://www.coindesk.com/private-blockchains-bitcoin-maximalists
https://mobile.nytimes.com/blogs/krugman/2014/10/04/the-long-cryptocon
https://en.bitcoin.it/wiki/Myths
https://en.wikipedia.org/wiki/Bitcoin
I also posted this on Google Plus https://plus.google.com/+EdMacLane/posts/KjU1ttkLzuZ