The Bear Case for Crypto, Part III: World Computers and the Woo-Tang Clan

For those of you who follow this blog, my recent blog post, the Bear Case for Crypto, is far and away the most popular thing I’ve ever written; it’s received more hits than the entire blog did in each of 2014 and 2015, and a friend of mine in New York had his boss point it out to him at the office – unprompted, and unaware of the connection. Surprisingly, though, I haven’t heard a great deal from the trolls. Which tells me the post has hit a nerve.

Part of that post deals with the “cryptocurrency” / investment scheme known as Ethereum in some detail and, in particular, the fact that stuff called “technology woo” tends to spring out of the ground whenever Ethereum is close by. Cognizant that I did not define “woo” there, I feel it is prudent to define it here, as I expect to be using the term extensively over the coming year. So you should all know what it means.

Woo, or woo-woo more fully, is a word used by skeptics to describe

pseudoscientific explanations that share certain common characteristics, often being too good to be true (aside from being unscientific). The term is common among skeptical writers. Woo is understood specifically as dressing itself in the trappings of science (but not the substance) while involving unscientific concepts, such as anecdotal evidence and sciencey-sounding words.

In my blog post from last week I pointed out that

Ethereum has an even more ambitious set of goals than Bitcoin does. Where Bitcoin is obsessed with “decentralising” monetary policy, and does a fairly decent job of it, because Ethereum can execute code, it (and everything built on it) is obsessed with “decentralising” literally everything else, whether it should be or not.

Following which I drew the reader’s attention to an absolutely outrageous article in ZeroHedge which claimed that Ethereum was going to replace AWS and scale to a million transactions per second. I pointed out that this was totally absurd for two reasons. First, in my view,

Ethereum is not a computer

and second, again in my view, words to the effect that

as it takes 3/40ths of a second to propagate a photon halfway around the world, it is more likely than not impossible, as a question of applying the laws of physics, to scale a world-wide system which needs to be perfectly in synch to 1 million transactions per second, as that universal constant, the speed of light, is simply too slow for us to send and receive information around the world at the required latency.

I added that

The above is by no means the only instance in relation to which a reasonable observer might think it prudent ask some follow-up questions; apart from the ZeroHedge piece dealt with here, the Eth universe produces some excellent creative writing on similar themes (see, e.g., the “World Computer” meme, the Plasma white paper, or practically any proposals for blockchain scalability).

The only proper response to suspected woo is to sit down and, rationally and unemotionally, assess whether the suspected woo is indeed guilty of being woo.

Being critical: an exercise

Postulate: Ethereum is not a computer.

Just today, I stumbled across some marketing that reminded me of an early Ethereum video which called Ethereum a “world computer:”

 

Uncritical crypto media then ran with it:

Screen Shot 2017-09-09 at 7.41.39 PM.png

 

So it is perhaps unsurprising that people keep using it:

“World computer.”

“Web 3.0.”

Woo?

We’ll limit the scope of this exercise for now, and ask ourselves one very simple question: is Ethereum a computer, much less a “world computer?” Or is it simply a program, being marketed with more grandiose language than it should be?

I’m not selling anything here, so I’m not going to tell you what you need to think. All I ask is that you review the “world computer” claim as a skeptical inquirer, and as you watch these videos ask what claims are made for the Ethereum network in them. Then draw your own conclusions after a reasonable and diligent inquiry of the facts.

What do you think? How do these make you feel? Have you heard these claims before? Can you think of instances which contradict those claims? Do you in fact agree with any of the claims? If so, how? Was I mistaken in my assessment in my last blog post, and is Ethereum in fact a computer?

Are there other videos I haven’t seen which are perhaps worth mentioning? Feel free to leave your thoughts in the comments below or, if you prefer, hit me up on Twitter.

Postscript: Woo-Tang

Martin Shkreli is selling the Wu-Tang Clan’s album Once Upon a Time in Shaolin on eBay for a million dollars (a 50% discount). Newly-minted Ether millionaires, now is your chance to do a good deed – buy it and open-source it.

One Comment

  1. […] Finally, we have a good definition of “woo”, from Preston Byrne: […]

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