Crypto in 2026: Oh, This Is the Bad Place
stephendiehl.com334 points by ibobev 8 hours ago
334 points by ibobev 8 hours ago
I've been deep into crypto for years and I was a big stablecoin supporter. I was fascinated by the tech and I still am. But everything outside the tech itself is just trash, scams, and gambling. I've come to believe that "pure" decentralization is neither practical nor particularly convenient. The only real use case that makes sense to me is giving people in developing countries access to a stable currency they can actually hold, trade, and invest in, meaning USDT or USDC. Outside of that, as an EU/US citizen I don't see why I'd hold stablecoins instead of fiat. It's actually riskier in every meaningful way, and I already have access to every form of investment I could want. It's genuinely fascinating to think about a technology that can empower people who otherwise have no access to financial tools. But that comes at the cost of millions of people around the world gambling with money they can't afford to lose, convinced they're investing their way to wealth.
Crypto was initially interesting to me because scarcity based economics is failing us and crypto give us a way to explore alternatives. But so far, nearly everything we've built with it has just been a clone of some scarcity-based thing that already exists outside of crypto.
Since then I've come to the conclusion that it's never worthwhile to buy crypto with fiat. Any scheme which asks that of its users creates too much continuity between the old way and the new way--it allows the illegitimately rich to continue to be illegitimately rich even after switching to the new system. Anything with that property doesn't deserve to be the new system.
What we need is a discontinuity. A system that wants not your money, but your participation, and which doesn't acknowledge the value of your old money. Today's crypto isn't it.
Isn't the whole point of an economy a method of resolving scarcity? Money is a proxy for participation; it keeps me from having to agree to paint the miller's fence in exchange for some flour.
That's the perspective that our current systems are based on. And back when the majority of the problems that people were up against had to do with there being not enough of something to go around--when it took half of us working in the fields just to feed the rest of us--then the system worked relatively well. 9 times out of 10, when somebody got a loan (which is the event that injects dollars into the system) it had something to do with alleviating the not-enough-stuff problems that we faced.
The quickest route to profitability had something to do with solving problems in ways that--by happenstance--let them stay solved. This is relevant since profitability is how banks decide whether to grant a loan, and loans are what cause USD to enter the system. Previously, we mostly had good reason to want people's ventures to succeed.
But nowadays, most loans are for zero-sum ventures that have more to do with capturing a share of some fixed resource (attention/influence mostly), or building something that helps some of us at the expense of others (missiles, datacenters, planned obsolescence, surveillance, etc). It's no longer clear whether we're better off with the success or failure of a randomly chosen business venture. Maybe that venture seeks to harm us.
The quickest route to profitability has changed. Now it's about making things worse for the many while benefiting the few (since it's the few who have all the money). Yet we're still treating dollars as valuable despite the fact that they're issued on the basis of profitability, a property that no longer has much to do with making our lives better.
So I think we need a system that understands consent. When I accept some abstraction from my employer in exchange for my labor I need to be able to look at it and decide whether accpepting it helps people who are helping me, or whether it helps people who want to poison my drinking water for their mining endeavor. Dollars don't carry enough information to enable me to make that decision, and so far neither does crypto.
We don't have to banish scarcity entirely before building monetary systems that are not based on it. Once we figure out the better way, it'll likely be crypto-shaped, except it won't ask you to buy it, it'll just ask you to use it. It'll be a rejection of the old ideas about value.
Thanks for sharing your perspective. It’s reminding me of how I was feeling about crypto in the early days. I begin specifying a project on those lines way back when and the ideas behind it are still interesting. Maybe you’ll enjoy: https://www.wired.com/2014/07/document-coin/
> When I accept some abstraction from my employer in exchange for my labor
That abstraction is simple debt. Your employer is, in exchange for what you've given them, promising to return to you something of value (food, shelter, entertainment, etc.) in the future. Money is the account of the promise made. The alternative is to forgo the debt and trade something of equal value at the time of the transaction. However, any negative externalities associated with you choosing what item of value you want to trade for exists whether you demand it immediately or defer acceptance until some time in the future. Trying to find a new way to practice accounting isn't going to change anything.
Simple debt isn't cutting it anymore. The "Debt to whom, and what outcomes does that person value?" question is important. Ignoring it and continuing to buy and sell simple debt traps people in situations where their economic way forward involves contributing to outcomes that makes their material situation worse. It's time bomb, each generation has diminishing incentives to participate.
> alternative is to forgo the debt and trade something of equal value
"equal value" is only a well defined concept when we have shared interests. But when half of us are trying to go to Mars and the other half is trying to prevent the first half from going to Mars so we can instead dedicate those resources to healthcare... when we're fighting over the steering wheel rather than fighting against a common enemy... then we can't usefully coordinate around a single untyped notion of "value". We're just running in circles negating each other's efforts. Our current economy is mostly waste.
New ways of accounting that don't obfuscate conflicts of interest the way that simple debt does will indeed change things.
> The "Debt to whom, and what outcomes does that person value?" question is important.
It may be, but it is one you, the employer, can easily ask during the interview. If a prospective employee doesn't align with your values, you don't have to hire them, and thus won't have to make them any promises to deliver anything that you don't feel comfortable with. This isn't only theoretical. "Cultural fit" is considered by a large swath of employers to be one of the most important aspects of hiring.
I know the typical HN account loves to over-engineer solutions to mundane things, but you really don't have to invent some new type of accounting for this. All you have to do is talk to the people in your life.
If the debts were spread around evenly, I'd agree with you. But the vast majority of debt is not peer to peer, but instead goes through a bank. If you're going to restrict a bank from using your mortgage to enable loans for endeavors that will hurt you (or selling the debt to somebody who will do this), I think you do need a new kind of accounting.
Accounting predates banks. You do not need to invent some kind of new accounting system to rid yourself of banks.
That said, banks do provide a useful service for many people. However, that service doesn't magically happen. One has to choose the bank they are comfortable employing. Which, again, requires an interview before accepting a bank to work for you. That is where you can make sure the bank you choose to utilize the services of aligns with your "cultural fit".
Talking to the people in your life is all you need here.