TechTakes

the famous hacker news one-two punch of “I didn’t absorb any of this but it’s wrong” and “this is wrong because I disagree with its tone”

[0h01m15s] He talks about the 2008 Great Recession and frames it in terms of greedy banks offloading risky mortgages. But he fails to mention that the government entities FMAC and FMAE insured those subprime mortgages in order to encourage home ownership, which is what enabled this risk-taking in the first place. If the banks had their own money at risk rather than the government's money, they wouldn't have done it.

Oh no, in his quick rundown of the way the banks were gambling irresponsibly, correctly assuming the government to bail them out in case of disaster he neglected to mention this specific instance of the banks gambling irresponsibly, correctly assuming the government to bail them out in case of disaster.

[0h02m15s] > the biggest returns on a bond come from when it first hits the market, a new bond that creates new securities sales is worth more than an old bond that is slowly appreciating, but not seeing much trade.

What? I'm pretty sure that's not how the bond market works. Bonds are priced fairly. Bonds being traded are sold at neither a premium nor discount to their fair market value. Also, the trading value of bonds doesn't appreciate or depreciate unless the interest rate changes.

Ignoring the type of bond being talked about and how their speculative value depends on the value of the mortgages in relation to the interest rates.

[0h14m15s] > How it works in Bitcoin, simply put, is that when a block of transactions are ready to be recorded to the ledger all of the mining nodes in the network compete with one another to solve a cryptographic math problem that’s based on the data inside the block. Effectively they’re competing to figure out the equation that yields a specific result

Wording nitpick, but they the equation is easily known, but the values to solve that equation are what are hard to find.

Deep cutting criticism right there.

[0h14m42s] > Once the math problem has been solved the rest of the validation network can easily double-check the work, since the contents of the block can be fed into the proposed solution and it either spits out the valid answer or fails. If the equation works and the consensus of validators signs off on it the block is added to the bottom of the ledger and the miner who solved the problem first is rewarded with newly generated Bitcoin.

Another wording nitpick. The verifier doesn't spit out the valid answer; it takes a proposed answer and spits out "valid" or "invalid". Secondly, the notion of the block being added to the bottom of the ledger glosses over the critical detail that every validator does so. Any validator can choose to reject the block, but it is not in their interest to do so because they would be going against consensus.

By this point I think the guy forgot he wanted to show Dan wrong and instead started to well actually just for the sake of being technically right.

[0h17m57s] > Because electrical consumption, electrical waste, is the value that underpins Bitcoin. Miners spend X dollars in electricity to mine a Bitcoin, they expect to be able to sell that coin for at least X plus profit.

Wrong again, this alludes to the labor theory of value. It's the other way around: Because people are willing to put a value on Bitcoin for their transaction utility, miners are willing to spend electricity to prop up the system.

And why exactly do the miners want to prop up the system? Also not exactly LTV since it's missing the "labor" part of the theory, which is less of a nitpick than half the points so far.

[0h30m58s] > It’s an ecosystem that absolutely demolishes consumer protections and makes the re-implementation of them extremely difficult.

He presumes that consumer protection is the only worthy goal. What about merchant protection? Search on Google for horror stories of eBay merchants getting scammed on PayPal by customers who lie about not receiving the product. Look at Louis Rossmann's rants about payment processors forcing merchants to eat the transaction fee even if a dispute is resolved in favor of the merchant.

Oh, you think cryptocurrency sucks? Have you considered how the existing banking infrastructure sometimes fucks over the petty bourgeoisie in ways that blockchains also don't solve?

[1h52m06s] > A deflationary economy punishes buying things, as anything that you buy today will inevitably be cheaper to buy in the future.

This is factually true, and I'm pointing to the whole context without quoting several paragraphs. He shows the standard government economics bias that deflation is bad and inflation is good. Yet, he ignores the evidence.

For example, the tech industry is massively deflationary. If you have $1000 today, you can buy a better laptop/iPhone/GPU next year if held onto this money for a bit longer. Yet, people still buy electronics. What gives? Well, there is a certain benefit to consuming in the present. It doesn't matter if you get x% more in the future, because someday you'll be dead. The point of saving money is to spend it someday, preferably before you're dead, unless you are generous about giving it to your kids.

This is so damn close to an actual profound point. Only the thinnest, sheerest foil of impenetrable pure ideology between these sentences and an actual meaningful criticism of the systems that centralize the power to the creeps. Yes, indeed, why would you waste your limited lifetime and energy as an unholy paladin of Mammon instead of enjoying what you have, maybe buying something nice and enjoying your life while you still have it.