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Blockchain is a solution in search of a problem
Someone showed the Kickstarter board a fancy PowerPoint presentation with lots of big numbers, they ran to invest a bunch of their own funds in a blockchain without stopping to ask their own devs if the tech had any value for what the site actually does, and now they’re desperately trying to justify it after-the-fact.
…that’s my current running theory, anyway.
More analysis of Kickstarter’s announcement here — including a bunch of background explanation, for people who still aren’t following what all the new tech terms mean.
When companies announce a vague “shift to blockchain” with no specific idea what they’re doing: “Back in 2017, we reported on the bizarre story of the Long Island Iced Tea Company rebranding itself as the Long Blockchain Corp. […] Now the Securities and Exchange Commission has revoked Long Blockchain’s stock registration, effectively banning the general public from trading its shares altogether.”
The big fraud in the heart of “Web3” discourse: “The cryptocurrency web3 starts with all our existing infrastructure. So I still need a DNS name, I still need a server, I still need storage, and I still have a distributed computation occurring between the browser and the server. So already I haven’t removed any of the gatekeepers from the conventional distributed system, showing the claims of gatekeeper-free decentralization are false. Web3 is only about adding an additional layer of complexity in the name of justifying the underlying cryptocurrencies.“
Problem links about NFTs/”cryptoart” specifically
A few days after the Kickstarter announcement, I got my first alert through DeviantArt Protect that an NFT is linking to one of my drawings without my permission. So it’s been an inauspicious week for blockchain news all around.
(As of this writing, the NFT-selling site is entirely ignoring the copyright claim…but I do appreciate DA for alerting me that it was happening at all. This is what a site that actually cares about its creative users looks like!)
A breakdown of what NFTs are — in straightforward terms, not in wild/ridiculous metaphors. (Which, to be clear, aren’t wrong — it’s just that I know many people don’t find them helpful.)
My days of regularly sharing this link are coming to a middle: Here Is The Article You Can Send To People When They Say “But The Environmental Issues With Cryptoart Will Be Solved Soon, Right?”
“You couldn’t store the actual digital artwork in a blockchain; because of technical limits, records in most blockchains are too small to hold an entire image. Many people suggested that rather than trying to shoehorn the whole artwork into the blockchain, one could just include the web address of an image […] Seven years later, all of today’s popular NFT platforms still use the same shortcut. This means that when someone buys an NFT, they’re not buying the actual digital artwork; they’re buying a link to it. And worse, they’re buying a link that, in many cases, lives on the website of a new start-up that’s likely to fail within a few years. “
2020: “The developers of non-fungible token project NiftyMoji pulled an exit scam as they have closed the official website, all social media and dumped their tokens on the market. Also the associated Coinbreeder accounts have vanished. The developers ran off with an estimated amount of one million dollars.“
Alternately, the link could get replaced with something else. Say, a bunch of random photos of rugs: “I just pulled the rug at my NFT collection on @opensea. Nobody got hurt. It is pretty easy to change the jpg, even if it does not belong to me or it is on auction. I am the artist, my decision, right?”
““The Billion Dollar Torrent,” as it’s called, reportedly includes all the NFTs on the Ethereum and Solana blockchains. These files are bundled in a massive torrent that points to roughly 15 terabytes of data. Unpacked, this adds up to almost 20 terabytes.”
Problem links about blockchains in general
Things crypto evangelists don’t like to talk about: “During a hard fork, software implementing bitcoin and its mining procedures is upgraded; once a user upgrades their software, that version rejects all transactions from older software, effectively creating a new branch of the blockchain. However, those users who retain the old software continue to process transactions, meaning that there is a parallel set of transactions taking place across two different chains.“
In other words: there isn’t one single, central version of Bitcoin. It has multiple versions, and they’re mutually incompatible with each other. And yet, some people still believe blockchain is the magic bullet that will make every website interoperable. Suuuure.
Also, if you’re hearing anyone talk about how miraculous and unhackable anything blockchain is:
November 2017: “On November 19, 2017, more than $30 million worth of Tether tokens were removed from the official Tether Treasury wallet by malicious hackers. Due to this security breach, Tether has executed a newly hard forked version of the Omni Core code, which powers the Tether network. Why? Because this code refused to transact any of the stolen tokens.”
December 2021: “One of BitMart’s addresses currently shows steady outflows of entire token balances, some worth tens of millions of dollars, to an address currently labeled by Etherscan as the “BitMart Hacker.” In a follow-up tweet, PeckShield estimated the losses to be $100 million in various cryptocurrencies on the Ethereum blockchain and $96 million on Binance Smart Chain.”
“it is not new to me. im a distributed systems engineer & programmer. ive been building shit like this for decades i serve a playerbase larger than most countries and have built networks spanning the globe. blockchain is old news. it is my job to find new technologies and use them if they’re better. these are not. they are bad, embarrassingly bad.”
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Any sign of kickstarter backing down? I used them a lot and am pissed about having to find other sites.
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Add that to the way they didn't tell the staff (which suggests they *knew* they would get a bad reaction, and wanted to avoid hearing it)...yeah, I suspect the board has done something that would make it personally expensive for them to back out.
I still don't give this great odds in the long run (it didn't exactly work out for Long Island Blockchain), but since the board is digging in so hard, the collapse might take a while.
...and since they haven't actually *done* anything yet except put out press releases, that gives their competitors plenty of time to work up a well-considered response.
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I managed to come up with, "A technology-based pyramid scheme with a whole lot of buzzwords attached."
I left off the part about "someone made a computer program that does Lots Of Math and declared that, every so often, the resulting math-bit would be called a coin, and a ridiculous number of techbro dudes decided they now had actual money." Because that's not too far off from how Actual Money works, only with, y'know, governments and courts to agree that the item changing hands (whether that's gold coins, paper bills, or numbers in a database) are actually worth something.
...I watched the beginning of BitCoin; I'm rather in awe of how they managed to convince real-world businesses that some part of it was worth Actual Real World Dollars. A fine discordian prank on the finance industry, ha ha.
At some point, the targets are supposed to notice they've been pranked, not double-down on "this is MONEY!!! and we will throw millions of dollars into spreading it around until everyone agrees this is MONEY."
I am fascinated at how many people have tied their financial futures to a math joke that went viral.
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It's a digital token that is limited, tradeable, and every unit is worth the same as every other unit, so it could be perfectly usable! As a...liquid resource, maybe? The thing gold is IRL for a lot of people.
But crypto is so overrun with gamblers, speculators, and scammers that the price isn't stable or reliable. Which ruins the usability for basic functions like "buying goods in stores." Or for anything that isn't gambling, speculating, and/or scamming.