{"id":10524,"date":"2022-03-21T23:38:30","date_gmt":"2022-03-21T23:38:30","guid":{"rendered":"http:\/\/ci029cbc7d30002795"},"modified":"2022-03-21T23:38:30","modified_gmt":"2022-03-21T23:38:30","slug":"why-bitcoin-isnt-crypto","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/culture\/why-bitcoin-isnt-crypto","title":{"rendered":"Bitcoin, Not \u201cCrypto,\u201d NFTs, Web3 Or DeFi"},"content":{"rendered":"<div id=\"bsf_rt_marker\"><\/div><div class=\"youtube-embed\" data-video_id=\"KKZZP2hHLFI\"><iframe loading=\"lazy\" title=\"Bitcoin Songsheet #1: Bitcoin, not &quot;Crypto,&quot; NFTs, Web3 or DeFi\" width=\"696\" height=\"392\" src=\"https:\/\/www.youtube.com\/embed\/KKZZP2hHLFI?feature=oembed&#038;enablejsapi=1\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/div>\n<p>If you\u2019re into venture capital, pay attention to tech or invest in the sector, you\u2019ve heard of all the buzzwords: Web3, NFTs, DeFi. Has anyone explained to you what they are? Did you understand it? It probably sounded as convoluted as the fat kid\u2019s explanation in summer camp as to why he doesn\u2019t have a picture of his really pretty girlfriend from back home. <\/p>\n<p>Why weren\u2019t these concepts understandable? Because these are all terms that are just nebulous enough to sound sophisticated, while avoiding strict definitions as to avoid scrutiny. They all have this Gnostic quality about them. You really need to be special to see the emperor\u2019s clothes.<\/p>\n<p>So what are these things? What is Web3? What are NFTs? What is DeFi? I\u2019m going to try to save you a lot of time: They\u2019re scams.<\/p>\n<p>I\u2019m a programmer with 24 years of experience, with the last 11 in Bitcoin. Bitcoin is an amazing tool, particularly for saving, which is why I own some. I\u2019ve written several books on the topic, including \u201c<a href=\"https:\/\/amzn.to\/362QBn4\" target=\"_blank\" rel=\"noopener\">Programming Bitcoin<\/a>\u201d published by O\u2019Reilly, a premier technical book publisher in the U.S. I\u2019ve also <a href=\"https:\/\/programmingbitcoin.com\/#programming-blockchain\" target=\"_blank\" rel=\"noopener\">taught over 700 programmers<\/a> and have many former students in all of the biggest companies in the industry. So when I say that NFTs, Web3 and Defi (aka \u201ccrypto\u201d) are scams, I\u2019m not saying so flippantly or as an exaggeration to make a point, I\u2019m saying that they\u2019re \u201cscams\u201d in the strictest sense of the word. <\/p>\n<p>If you\u2019re convinced at this point, there\u2019s no need to read further and you can instead go do something more productive, like reading about last night\u2019s episode of \u201cThe Bachelor.\u201d<\/p>\n<p>To prove that these concepts are scams is not my intention here. That would take a much longer article and you probably wouldn\u2019t read it. As a paraphrased version of Brandolini&#8217;s law states:<\/p>\n<p>\u201cThe amount of energy needed to refute bullshit is an order of magnitude bigger than to produce it.\u201d<\/p>\n<p>So in this article, I\u2019m going to take a different tack. I\u2019m going to induce reasonable doubt about these projects, like a good attorney would. And hopefully, as a side-effect, I can bring on a full existential dilemma to the \u201ccrypto\u201d bros.<\/p>\n<h2>A Note To The Trolls<\/h2>\n<p>I\u2019m sure that I\u2019m going to get a lot of pushback for this article. And I\u2019m also sure most of the people pushing back will be non-technical people. The most vehement will be people invested in these projects and I\u2019m sure they\u2019ll get mad at me with all the righteous indignation of a <a href=\"https:\/\/www.thedailybeast.com\/inside-the-bizarre-world-of-bronies-adult-male-fans-of-my-little-pony\" target=\"_blank\" rel=\"noopener\">Brony<\/a>.<\/p>\n<p>As Upton Sinclaire <a href=\"https:\/\/www.brainyquote.com\/quotes\/upton_sinclair_138285#:~:text=Upton%20Sinclair%20Quotes&amp;text=It%20is%20difficult%20to%20get%20a%20man%20to%20understand%20something,upon%20his%20not%20understanding%20it.\" target=\"_blank\" rel=\"noopener\">said<\/a>, it\u2019s hard to get someone to understand something when their job depends on them not understanding it. I\u2019m not interested in debating such people because they\u2019re too far gone. The time to convince someone is before they get in, when they\u2019re a lot more objective about what\u2019s happening, rather than after, when they\u2019re likely to accuse you of bias. But hey, I\u2019m willing to take the counter arguments which have all the sophistication of \u201cso\u2019s your mom.\u201d<\/p>\n<p>So, dear reader, I\u2019m trying to convince you, the person sitting on the fence and thinking about possibly investing in these things, who still has some very basic questions.<\/p>\n<h2>The Incentives<\/h2>\n<p>Have you ever seen anyone who had a problem in the real world, searched for a solution and found it in Web3\/NFTs\/DeFi? Unless it was to raise money from gullible people, I\u2019m guessing you haven\u2019t. That\u2019s because these things are like the <a href=\"https:\/\/www.youtube.com\/watch?v=Kzz7eK86yO0\" target=\"_blank\" rel=\"noopener\">Rube Goldberg machine<\/a> at the beginning of \u201cPee Wee\u2019s Big Adventure.\u201d There are easier ways to make breakfast, damn it! They have the most tortuous, nonsensical reasons to include an unnecessary token that make everything less efficient and more costly.<\/p>\n<p>Have you examined what the code of these supposedly decentralized applications does? No? These things have more bugs in them than the set of \u201cIndiana Jones.\u201d Would it surprise you to know that the marketing departments of the organizations pushing this stuff are exaggerating just a tad bit on their capabilities? <\/p>\n<p>Do you know that the people doing this marketing have huge premines of the coins themselves and have a strong vested interest in getting more people to buy? The venture capitalists that are funding this stuff get a huge number of tokens at a significant discount before the public. Their job is to convince you to buy, regardless of whether it\u2019s useful or not. They spend upwards of 50% of the budget on marketing. That\u2019s a ratio for unhealthy sugar water like Coca-Cola, not a supposedly sophisticated technology.<\/p>\n<p>Are these projects as decentralized as they claim to be? The creators of these coins or protocols can change the rules anytime they want for any reason. This is even worse than Google\u2019s terms of service. At least with Google, you know up front that you\u2019re getting screwed.<\/p>\n<p>Do you know that these projects can be copied? The code is open source, and they\u2019re copied all the time for various reasons. The new coins are technically indistinguishable from the original. So why do they have different prices? Maybe it\u2019s not all about the supposed features of the project, but the marketing dollars going into it.<\/p>\n<p>Have you looked at the people involved in these projects? Many have sketchy pasts, to put it mildly. At best, the founders of these tokens have \u201csuccessfully\u201d launched another token as their credentials. Did they fulfill their promises on that token? No. But they sure got returns for the early people. These people are like the network news: You know everything they say is heavily distorted to manipulate you.<\/p>\n<h2>The Returns<\/h2>\n<p>But the returns! Surely, you can\u2019t argue against 500% returns in a few months, right? Well, you can, because those types of returns are common in scams. You could have made money on a bankrupt Hertz stock if you got in and out at the right time. Making money doesn\u2019t make the action right any more than winning with seven, two offsuit.<\/p>\n<p>The returns are the only reason anyone\u2019s interested in this stuff, because the tech certainly isn\u2019t there. What you have in these things are lots of promises. These promises get hyped up by a lot of marketing. A frenzy develops and eventually there\u2019s a crash when the promises fail to materialize. It\u2019s like a bad sequel to a great movie. Bitcoin was great, so let\u2019s go look at this other thing! The tech is bound to be disappointing.<\/p>\n<h2>What About Bitcoin?<\/h2>\n<p>Bitcoin is the original and very different from \u201ccrypto\u201d projects, which are all basically cheap knockoffs. Bitcoin has no central controller, there aren\u2019t misaligned incentives, the people involved have no special rights and there\u2019s no marketing team. The returns on bitcoin have been exceptional because it\u2019s done exactly what it\u2019s promised, which is to be an uncensorable, unseizable, strictly-limited money. This is why Bitcoin is credible where \u201ccrypto\u201d is not.<\/p>\n<p>The key property of Bitcoin is that it\u2019s decentralized. There\u2019s no single point of failure and it\u2019s controlled by the community of users, not some governing entity. We\u2019ve observed over and over again people copying the code, but not being able to copy the decentralization. The decentralization is native to the network, not the code. It\u2019d be like trying to duplicate an orchestra by providing the same equipment, but not the same musicians. It\u2019s not going to work.<\/p>\n<p>Bitcoin is better money. It doesn\u2019t pretend to remake the web or remake finance or remake art. It\u2019s been from the beginning a better money because it\u2019s digital, decentralized and absolutely scarce. Bitcoin actually has a use case that people all over the world are using. \u201cCrypto\u201d is not any of these things because its leaders are like politicians, making promises they won\u2019t keep.<\/p>\n<p>The only coin that doesn\u2019t require you to trust someone is bitcoin. Everything else is like borrowing money from Tony Soprano. You\u2019re playing a dangerous game.<\/p>\n<p><em>This is a guest post by Jimmy Song. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or <\/em>Bitcoin Magazine<em>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>You\u2019ve heard the buzzwords: Web3, NFTs, DeFi. But what do they mean? Compared to Bitcoin, pretty much nothing.<\/p>\n","protected":false},"author":2645,"featured_media":5291,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33],"tags":[1746,80,696,1130,59],"class_list":["post-10524","post","type-post","status-publish","format-standard","has-post-thumbnail","category-culture","tag-altcoins","tag-crypto","tag-defi","tag-nfts","tag-opinion"],"author_data":{"id":2645,"name":"Jimmy Song","nicename":"jimmy-song","avatar_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/12\/2022-05-02-071400-96x96.jpg"},"featured_image_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/11\/bitcoin-not-crypto-nfts-web3-or-defi.png","_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/10524","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/2645"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=10524"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/10524\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media\/5291"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=10524"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=10524"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=10524"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}