YanTheFawn/crypto - promises and problems.txt

## crypto - promises and problems.txt
Want to preface this with some info - I have been a big fan of Ethereum since I deep dove into it in Jan 2021. I became captivated by al of the beautiful concepts proposed by the new tech:
1) smart contracts (integrity by auditable code),
2)stable coins (so that transactions could happen stably),
3) transparent transactions ("cant be evil > dont be evil"),
4) ability to own one's own data
5) the breaking of siloed databases
6) digital identity backpacks to potentially remove friction such as constantly filling out forms with the same information each time we go to the doctor's office or sign up for a new platform by housing it on a
7) credibly neutral substrate (with presumable privacy components when armed with ZKP's),
8) true provenance in the form of NFTs, and a potential world of building true online identities via attestations.
That said, this past year has shown me some painful realities of the landscape as it is:
1) There isn't much product market fit to date - aside from price speculation and fascination with the tech itself, ask yourself, do I actually use this tech for a daily need? To get coffee, to pay a friend, for social media, for streaming services
2) The UX is, generally speaking, terrible - I think we can all agree that the most common products (i.e. Metamask) are terrible to use
3) The space has many centralization vectors - proof of stake (look at the largest staking services and the % of the network they represent), wallet services, RPC services (the degree of which they are hosting nodes on Amazon cloud), NFTs largely pointing to centralized servers, centralized UI's, stable coin companies being centralized and being vectors for fraud/government freezes. Even DAI's collateral is heavily backed by centralized stables.
4) The space feels incredibly circular - i.e. Defi is the act of trading one speculative token for another speculative token.
5) The space is a honey pot for grifters - Think of basically every NFT collection drop - most are all pump and dumps. Think of all the VCs and early investors that are happy to get into any initial offering because it doesn't matter if the coin goes to zero (which it most often will), because there is a template procedure for simply dumping it on an innocent, naive, and hopeful retail base. Think of all the sociopaths leading CEX's and venture funds only to rob the trusting retail of their funds.
6) Product innovation feels lacking - do we really need yet another defi protocol? Yet another 10k pfp drop? Is this really progress?
7) Toxic maximalist culture and bag-holding incentives reveal such deep confirmation bias that legitimacy is lost when awful events like this year occur, but leaders in the space are reluctant to critique themselves. Rather than hearing things like "we really need to look in the mirror and re-asses our values as a space that allowed us to get here and hurt so many people", I hear things like "defi-working perfectly! I'm calling the bottom now! This is what you get when you don't custody your own assets". A lot of this feels lacking in empathy for the fact that self-custody is incredibly scary for everyone, that humans necessarily will need to delegate trust to 3rd parties for certain part of their lives (how often do you inspect a plane engine before it boarding it), and that decentralization can (and my opinion, should) be a spectrum, where one should be able to safely opt in to different levels of decentralization for different needs at different times.
	Want to preface this with some info - I have been a big fan of Ethereum since I deep dove into it in Jan 2021. I became captivated by al of the beautiful concepts proposed by the new tech:
	1) smart contracts (integrity by auditable code),
	2)stable coins (so that transactions could happen stably),
	3) transparent transactions ("cant be evil > dont be evil"),
	4) ability to own one's own data
	5) the breaking of siloed databases
	6) digital identity backpacks to potentially remove friction such as constantly filling out forms with the same information each time we go to the doctor's office or sign up for a new platform by housing it on a
	7) credibly neutral substrate (with presumable privacy components when armed with ZKP's),
	8) true provenance in the form of NFTs, and a potential world of building true online identities via attestations.
	That said, this past year has shown me some painful realities of the landscape as it is:
	1) There isn't much product market fit to date - aside from price speculation and fascination with the tech itself, ask yourself, do I actually use this tech for a daily need? To get coffee, to pay a friend, for social media, for streaming services
	2) The UX is, generally speaking, terrible - I think we can all agree that the most common products (i.e. Metamask) are terrible to use
	3) The space has many centralization vectors - proof of stake (look at the largest staking services and the % of the network they represent), wallet services, RPC services (the degree of which they are hosting nodes on Amazon cloud), NFTs largely pointing to centralized servers, centralized UI's, stable coin companies being centralized and being vectors for fraud/government freezes. Even DAI's collateral is heavily backed by centralized stables.
	4) The space feels incredibly circular - i.e. Defi is the act of trading one speculative token for another speculative token.
	5) The space is a honey pot for grifters - Think of basically every NFT collection drop - most are all pump and dumps. Think of all the VCs and early investors that are happy to get into any initial offering because it doesn't matter if the coin goes to zero (which it most often will), because there is a template procedure for simply dumping it on an innocent, naive, and hopeful retail base. Think of all the sociopaths leading CEX's and venture funds only to rob the trusting retail of their funds.
	6) Product innovation feels lacking - do we really need yet another defi protocol? Yet another 10k pfp drop? Is this really progress?
	7) Toxic maximalist culture and bag-holding incentives reveal such deep confirmation bias that legitimacy is lost when awful events like this year occur, but leaders in the space are reluctant to critique themselves. Rather than hearing things like "we really need to look in the mirror and re-asses our values as a space that allowed us to get here and hurt so many people", I hear things like "defi-working perfectly! I'm calling the bottom now! This is what you get when you don't custody your own assets". A lot of this feels lacking in empathy for the fact that self-custody is incredibly scary for everyone, that humans necessarily will need to delegate trust to 3rd parties for certain part of their lives (how often do you inspect a plane engine before it boarding it), and that decentralization can (and my opinion, should) be a spectrum, where one should be able to safely opt in to different levels of decentralization for different needs at different times.