this post was submitted on 16 Mar 2025
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The one the linked study references, Monero, is generally regarded by its community as a currency more than an investment. This is reflected in design choices that prioritize user privacy, at the expense of being delisted from most major exchanges, banned from many countries, and the resulting lack of investment and price growth. Obviously whether you want to use something as an investment or for practical reasons is up to you, but to be clear I wouldn't recommend speculative investing in cryptocurrency. Not being a solid investment doesn't mean cryptocurrencies never live up to what they are trying to be and accomplish.
Like what? When it comes down to it, these are open source software projects, with a higher than normal level of oversight and often many safeguards and redundancies in place to prevent abuse by devs. For example Ethereum intentionally has multiple separate client implementations made by separate people that implement the same protocol, as a safeguard against bugs or attacks affecting the whole network at once. Devs do not have the final say either, because what ultimately determines what code is running on the network is the consensus mechanism, dictated by which software miners or stakers choose to use.
Transparency and decentralization means that even when there arguably is corruption, it's limited. A decade ago there was a schism in Bitcoin; much of the community believed that for it to function as digital cash, low fees were needed, but the core developers took the stance that making the changes required for this would otherwise weaken the network, a position many saw as disingenuous and driven by hidden motives. A community hard fork and much censorship on r/Bitcoin later, the market decided, core devs emerged as the winners, and Bitcoin shifted its values to serving as 'digital gold' rather than usable digital cash. But to put it in perspective, I would say this was at worst a minor amount of corruption, it isn't like these actions are the same sort of thing as having control over a large collection of user funds and running off with it, because they basically couldn't be; the code is open source, there is a genuine degree of decentralization here, no one is the CEO of Bitcoin.
"Massive" corruption happens in cases where transparency and decentralization have been intentionally removed, such as the various manipulations and outright thefts perpetrated by centralized crypto exchanges, or the thousands of memecoins that never published their code or cryptographically verified that it was the same as the code actually deployed and turned out to be outright scams/malware that let you put money in but never take it out, or concealed the large share of tokens the devs hold in reserve to dump on you. But the technology offers solutions; you can refuse to engage with things that are centralized or opaque, you can tell who is trustworthy by who provides you the means to not need to trust them to begin with.
Your last paragraph really proves what I’m saying. Nothing in these systems prevents the real world types of fraud that everyday people are susceptible to because those are social problems. The technical safe guards that you describe require a user to be knowledgeable in order to audit and prove that they’re being used effectively.
Monero might be a good project making good decisions now, but what’s is stopping it from taking a course similar to the one you described bitcoin taking? It sounds like the only thing in the way is the current community.
These are all good points. It is absolutely true that all of this comes down to the problem of social consensus. The role of the technology is to assist in resolving it, to create structure that gives a community a better shot at successfully fulfilling its chosen values/purpose. This is true for any p2p tech, Lemmy itself being one example.
Sort of, but knowledgeable people can signal boost their knowledge and provide references to confirm what they're saying. I follow some less active cryptocurrency subreddits, and the most common type of post is someone who has bought a scamcoin asking for more information, often hoping that what they are seeing was a technical glitch rather than a scam. Someone will then refer them to a token sniffer website; you put in the address of the token, and it automatically checks the publicly available information for the typical red flags, and basically always the tokens in these posts are confirmed malicious. For the OP in these posts, it's usually too late, their money is gone, but there are accessible means to investigate security guarantees.
High profile projects that fail to hide what they are doing do get called out on it with solid rationale/evidence, for instance Terra Luna had many people loudly pointing out the fatal flaws in its structure well in advance of its collapse. Why were they ignored? At some point I started noticing a big cultural and values shift in people talking about crypto; I would be talking about technical verification as the obviously effective way to confirm legitimacy, and people would push back: actually, I was totally wrong, it doesn't really work, and the real way to tell what's legit is by paying attention to the personality of the central figure representing a project. Or others who didn't necessarily buy into the cult of personality stuff, but also had no interest in learning how anything works, because what they wanted to do was casually throw $20-100 into a possibility of getting rich and not think about it too much. This represents a social failure; crypto provides a path to a chain of accountability that could reach everyone, but does not because a mass of people don't believe in it, or don't see it as worth their time to participate in.
The internet arrived at a scorched earth solution: the "crypto is a scam" narrative. Honestly, it is what a lot of people need to hear, because it is simple and because they aren't hearing anything else. The people who think the way to pick investments is by making personality judgments need to stay the fuck away because they are going to lose all their money. But that narrative is also untrue, and denies the things cryptocurrency actually can do effectively.
It's community values, aligned and reinforced with incentives. I don't necessarily think Bitcoin took the wrong path, in retrospect. It adjusted its values to be compatible with the interests of its financial stakeholders, which is important because securing a cryptocurrency network against attack takes resources and so has to be a viable business. I believe that as long as values and incentives don't diverge too hard, a cryptocurrency can hold together and do what it sets out to do.
Anyway that was some walls of text, but thanks I needed to vent about this stuff