WhatsWrong

### Counterargument: The "New Planet" Metaphor Overpromises a Flawed Frontier

The analogy of crypto as a "new planet" being settled is seductive but ultimately misleading—a romanticized narrative that glosses over structural flaws, environmental costs, and a track record of failure that far outweighs the bootstrapping benefits. Far from a blank slate for an "upgraded financial system," crypto resembles a speculative bubble built on sand: energy-intensive, prone to collapse, riddled with inequality, and incapable of delivering on its decentralized promises without replicating the centralization it claims to oppose. Speculation isn't productive bootstrapping; it's a parasitic casino that enriches a few while externalizing massive risks to society. The "killer app" of money in hyperinflated economies is a niche band-aid, not evidence of disruption, and the vision of crypto as a "bulwark against centralization" ignores how it concentrates power in the hands of whales, miners, and protocol insiders.

#### Why Crypto Isn't Worth Settling

The argument claims crypto fills gaps in failing property rights systems, citing adoption in Argentina, Turkey, and Ukraine. But this is survivorship bias: crypto thrives in crises not because it's superior, but because it's a desperate hedge against local fiat collapse. In stable economies, adoption remains marginal—global crypto users hover around 5-6% of the population (per 2024-2025 Chainalysis reports), dwarfed by traditional banking. Stablecoins like USDT are "useful" for remittances or inflation protection, but they're pegged to the dollar and reliant on centralized issuers (Tether holds opaque reserves audited sporadically). This isn't innovation; it's offshoring risk to a shadow system vulnerable to depegging events, as seen in the 2022 Terra-Luna crash that wiped out $40B+ overnight.

The "Christensenian disruptive innovation" trope falls flat. True disruptors (e.g., smartphones) scale by solving everyday problems cheaply and reliably. Crypto's "improvements" come with crippling tradeoffs: Bitcoin transactions cost $1-50 in fees and take 10-60 minutes; Ethereum gas fees spike during congestion. Scalability solutions like layer-2s fragment liquidity and introduce new centralization risks (e.g., Sequencers in rollups). For the unbanked (1.4B globally per World Bank), crypto requires smartphones, internet, and literacy—barriers that mobile money like M-Pesa in Kenya solved a decade ago without volatility or hacks.

Beyond money, promised apps (DeFi loans, NFTs for creators) are speculative mirages. DeFi TVL peaked at $180B in 2021 but crashed 70%+ in 2022; most "loans" are overcollateralized gambles, not accessible credit. Creators "taking ownership" via NFTs? The market imploded 95% from 2022 highs, with 80%+ of projects worthless (per 2025 DappRadar). Identity control? Wallets are lost forever without seed phrases—over $100B in BTC is inaccessible due to user error. Crypto doesn't "upgrade" pre-digital systems; it layers complexity on top, failing the test of broad, sustainable utility.

#### Speculation: Parasitic, Not Productive

Invoking Carlota Perez's tech cycles ignores key differences: railroads and internet bubbles built tangible infrastructure (tracks, fiber optics) with lasting productivity gains. Crypto's "infrastructure" is mostly token issuance and trading venues—95% of 20,000+ tokens are illiquid or dead (CoinGecko data). Speculation drives "talent inflows," but much is grift: airdrop farmers, memecoin pumps, and VC dumps. The 2021-2022 cycle saw $3T+ in market cap evaporate, funding yachts for insiders while retail lost life savings.

The "hello world of digital property" excuse is childish. Pokemon cards are low-stakes fun; crypto volatility (BTC down 70%+ in bear markets) ruins lives. Financial products need speculation for liquidity? Traditional markets bootstrap via regulated exchanges without 100x leverage or rug pulls. Crypto's N-sided market is a house of cards: MEV extracts $1B+ annually from users (per 2025 Flashbots reports), and protocols like Uniswap rely on arbitrageurs who front-run trades. This isn't efficiency; it's rent-seeking in code.

#### The Casino's Irredeemable Dark Side—and It's the Core

The original admits scams but calls them outliers in a "Wild West." Reality: fraud is endemic. Chainalysis estimates $10B+ in illicit flows annually; 2024-2025 saw $2B+ in hacks (Ronin, DMM Bitcoin). "Good actors outweigh bad"? Whitehats recover fractions; most victims get nothing. Self-regulation fails—DAOs vote with tokens held by whales. Earthly regulation isn't "prohibiting visits"; it's protecting citizens from Ponzi-like schemes (e.g., SEC vs. Ripple, Binance settlements).

Energy waste is unforgivable: Bitcoin mining consumes 150 TWh/year (more than Argentina's total electricity, per Cambridge Bitcoin Electricity Consumption Index 2025), emitting 70M tons CO2—equivalent to a small country's footprint—for redundant proof-of-work. Ethereum's PoS shift helped, but the ecosystem remains inefficient.

Centralization hypocrisy abounds: 3 mining pools control 60%+ of BTC hash rate; 10 wallets hold 30% of ETH. "Bulwark against Big"? Crypto enables new Bigs—exchange oligopolies (Binance: 50% spot volume), stablecoin monopolies (USDT/USDC: 90% market). It's not countering power; it's redistributing it to tech-savvy elites.

### Analysis: Where the Original Argument Falls Short

1. Metaphorical Overreach and False Historical Analogies (Core Weakness): The "new planet/gold rush" framing anthropomorphizes crypto into an inevitable civilization, ignoring failed frontiers (e.g., dot-com bust left 90% of companies dead, but with real assets; crypto leaves digital dust). San Francisco boomed via physical trade/immigration; crypto's "infrastructure" is intangible and reversible (forks, rug pulls). Perez's cycles require post-bubble productivity; crypto's is still pre-bubble in utility (15 years in, <1% global payments onchain per Visa/Chainalysis).

2. Cherry-Picking Adoption and Ignoring Tradeoffs: Highlights crisis zones but omits low penetration elsewhere and alternatives (e.g., CBDCs in Nigeria/China outpace crypto). Dismisses "first-world privilege" without addressing crypto's privilege: it favors the connected, educated, and risk-tolerant. No quantification of "improving fast"—transaction volumes stagnate outside speculation (2025 onchain TXs ~1B/year vs. Visa's 250B).

3. Romanticizing Speculation Without Evidence of Net Productivity: Claims speculation funds research/infrastructure but provides no metrics (e.g., how much of $100B+ VC funding went to scams vs. core tech?). Ignores opportunity costs: talent diverted from productive fields (e.g., AI, biotech). "Zero-sum" admission is undercut by calling it necessary—traditional finance bootstraps without it via bonds/stocks.

4. Downplaying Systemic Risks and Centralization: Admits "dark side" but frames as temporary/Prisoner's Dilemma solvable by "thinking longer term." This is naive; incentives align for short-term extraction (whales dump on retail). No acknowledgment of capture: protocols governed by insiders (e.g., Solana outages from validator centralization).

5. Lack of Falsifiability and Forward-Looking Vagueness: "Money is the first app, more to come" is unfalsifiable—15 years of "soon." Visions of consumer apps/identity remain prototypes. No benchmarks for success (e.g., when does crypto handle 1% of global finance without crashing?).

In sum, the argument is inspirational hopium for insiders, not a rigorous case. Crypto may persist as a niche asset class or hedge, but as a "thriving civilization"? It's a ghost town in the making, sustained by narrative more than reality.

one of possible evolutions of personal data handling on the internet 

even though I'd rather see some decetnralised web3 + zk solution

another recommendation from Danica (FC)

recommendation from Danice (FC) - alternative look at digital economy and everyone providing free content to make social network owners rich