Even though Hyperbola is positioning for security, privacy and emancipation, we have a clear reasoning to decline every cryptocurrency now and in the future. We don't and won't recognize and include any kind of those as they generate only false hope and more technological failures.

So with this article we will explain aspects of the tremendous issues cryptocurrencies include. But let's first define what a cryptocurrency is:

And what is a cryptocurrency really not? A helpful tool for making payments distributed, understandable, better controllable for every being. That's exactly part of this article to explain why Hyperbola is rejecting any cryptocurrency, libraries and tools focused on those same way. In general to note: No cryptocurrency is creating independent perspective or fulfills the promise to get more wealth in any way and equality for all human kind is simple said more than only far away with the toolsets. This is without any doubt surely also not working anywhere else, but especially here people do not stop believing those false claims.

There are many buzzwords going around when we talk about one special cryptocurrency or cryptocurrencies as common field. So within this paragraph we want to give a shortened insight about how different phrases and technical terms are to be seen and how they are common bound towards the wording “currency”.

Technical speaking a currency has two fundamental goals:

• Establish value
• Facilitate the exchange of value

We can evaluate currencies based on how well they meet these goals. So how does cryptocurrency establish value? Establish scarcity as the basis of value, usually as part of a consensus algorithm. Following up a listing of different used methodologies:

The essential keyword in usage for cryptocurrencies is also the basis of modern cryptography itself: One-way functions, easy to compute in one direction, hard to reverse. As an example:

What are the prime factors of 104,927?
104, 927 = x × y (Task: solve for x and y, to have both sides on mathematical pair)
Result: 104, 927 = 317 × 331

Hashing algorithms are a kind of one-way function which takes some kind of arbitrary input and produces a unique numeric hash of that input. Another example:

Input = "hello"
 
a = 0, b = 1, c = 2, ...
 
X = 0
X = X + 7 mod 26   H
X = X + 4 mod 26   E
X = X + 11 mod 26  L
X = X + 11 mod 26  L
X = X + 14 mod 26  O
X = 21

So cryptographic hashes must have specific properties:

• Easy to compute in one direction, hard to reverse
• Small changes to input resulting in large, unpredictable changes to output
• Output is generally longer and therefore unique as output

Bitcoin as most prominent known example of a cryptocurrency uses cryptographic hashes to establish scarcity from the fact that starting with a cryptographic hash with desirable traits and finding a suitable input to produce it is very difficult. If we want to find an input which produces a hash starting with 20 zeroes, the only way is to try a bunch of random inputs until we find one that works. But once we have the answer, anyone can trivially verify our work.

Easy initial way forward: ”hello world” → 309ecc489c12d6eb4cc40f50c902f2b4d0ed77ee511a7c7a9bcd3ca86d4cd86f989dd35bc5ff499670da34255b45b0cfd830e81f605dcf7dc5542e93ae9cd76f
Very hard and in ideal situation impossible backwards: 309ecc489c12d6eb4cc40f50c902f2b4d0ed77ee511a7c7a9bcd3ca86d4cd86f989dd35bc5ff499670da34255b45b0cfd830e81f605dcf7dc5542e93ae9cd76f → ”hello world”

Following up an example for proof of work as part of the algorithm Bitcoin is using:

SHA256(ledger() + rand()) = bc4e31614f2edd1c52ab0e1f6fcfa53a4e2a90...
SHA256(ledger() + rand()) = d017f0355555ddd27b2936ac95525848d60cca...
SHA256(ledger() + rand()) = 0655fc46bf19ac30b725ad5063daf3c1ed2dca...
SHA256(ledger() + rand()) = cb7e9a76d9e5ae65ece72ff5b9bb15191e8bf2...
SHA256(ledger() + rand()) = ea8813cd9cf3fda9ec751ff780ba7ac56c084b...
SHA256(ledger() + rand()) = 000000000000000000001e280f8fa12d5af3c8...
^ 20 zeroes: 6 BTC get

So now with the information explained we can furthermore add another part as noted before the “digital ledger” or also the blockchain.

(Image is showing the process of a new entry added into the blockchain, source: Hyperbola-project)

As the data created needs to be saved and distributed for further processing. That's the common task included in the phrase as Bitcoin is per definition designed to be “currency” and blocks containing the following information:

• The hash of the previous block (forming a chain of blocks)
• A list of transactions to include in that block
• Random data (to produce the desired hash characteristics)

Miners (participants in the distributed network who generate hashes) are incentivized to mine with a block reward and the transaction fees from each transaction they include. This process establishes a consensus on the state of a distributed ledger of transactions, thus facilitating commerce.

And what is with “proof of stake”?

Until this point we have described most only “proof of work”. So what is about “proof of stake”? Is this possibly more promising? The short but clear answer is also: No, it is not. But for this we also need to identify another prominent word being in usage as being fiat money: The phrase is mostly, poorly but also wrong used with a complete negative connotation in comparison with cryptocurrencies being described as the “even better and safe variant”. Is this really the reality or just wishful thinking? Let's define that a bit more clear.

• Proof-of-work currencies derive value from the waste of valuable resources, e.g. electricity.
• Proof-of-stake currencies attribute value to the consensus of the stakeholders.

More in detail: A consensus mechanism is a method for validating entries into a distributed database and keeping the database secure. In the case of cryptocurrencies, the database is called the blockchain - so the consensus mechanism secures the blockchain. “Proof-of-stake” reduces the amount of computational work needed to verify blocks and transactions. Under “proof-of-work”, intense computing requirements keeps the blockchain secure. “Proof-of-stake” changes the way blocks are verified using the machines of individual coin owners, so there doesn't need to be as much computational work done. The owners offer their coins as collateral (staking) for the chance to validate blocks and earn additional “income”.

Fallacies are quite not a big issue as they are part of the every thought and process in general, but only if they are depending also on the active decision to be recognized, discussed and solved. Especially their solution is important as any kind of technology based only on fallacies can cause severe damages and that's the case in regards of cryptocurrencies.

First to give a generic impression as cryptocurrencies have invented an entirely new category of abuse, betraying others throughout pyramid schemes, failing technologies beyond any impression full with long list of problematic dependencies, false claims of enabling any kind of emancipation and just the known paradigm of greed.

But how to recognize any fallacy and how to examine if there is advantage and disadvantage? It is clearly to say that the basic problem within all is greed in its purest form, also for cryptocurrencies.

Following up for this article we divide the different parts in three aspects for scaling fallacies:

• Technical scale: The way cryptocurrencies are implemented and demand hard- and software.
• Social scale: As a wide field including many buzzwords and as already stated (surely wrong) promises cryptocurrencies are a viable point for fraud.
• Economic scale: With the uncontrolled usage of resources growing especially in hardware cryptocurrencies have a clear undeniable damage towards the global environment and climate.

On the technical scale cryptocurrencies essential fail with their tremendous power-consumption. First to note that there is no cryptocurrency existant without computing power. The whole model requires computing power to exist. And there is also one essential point as computing-power is the most wanted and valuable part within.

We are not only talking about specialized hardware being offered for high costs. Cryptocurrency has invented an entirely new category of internet abuse also. Opened services offering computing for different tasks are under attack: JavaScript miners, botnets, and all kinds of other illicit cycles are being spent solving math problems to make money for bad actors. Some might argue that abuse is inevitable for anyone who provides a public service - but prior to cryptocurrency, what kind of abuse would for example build-server endure? Spam? Especially when common attack-vectors and known open ports are locked out. Someone might try to host their website on ephemeral virtual environment with dynamic ordered DNS. Someone found a way of monetizing stolen CPU cycles (computing-power) directly, so everyone who offered free CPU cycles for legitimate use-cases is now unable to provide those services. We can in the end state: If not for cryptocurrency, these services would still be available. And therefore we should also not make the mistake to underestimate the mentioned bad actors. There are large, talented teams of engineers across several organizations working together to combat this abuse, and they’re losing. To mention further samples:

• Using CPU limiters to manipulate monitoring tools
• Installing crypto miners into the build systems for free software projects so that the builds appear legitimate
• Using password dumps to steal login credentials for legitimate users and then leveraging their accounts for mining

So we are not only talking about specialized hardware with high and irresponsible energy-consumption but also about essential criminal activities to harm people and infrastructure needed for free and libre projects. Also not to keep that aside: Most software used by cryptocurrencies is beyond being minimalist and therefore also violating principles of Hyperbola as project. And also the whole aspect of depending on a further scaling remote infrastructure should not be ignored: The more people engage into services depending on complete network-infrastructure the lesser they are really independent per definition. The promise to act “without any bank” or “without any dependencies” is simple said not true: People are always depending there on services, even when the keyword “decentralized” is used here.

Let's describe another named cryptocurrency: Monero is a cryptocurrency that attempts to be actually anonymous, and largely succeeds (for this concrete moment).

But as facts show it is very popular for crime:

• Currency of choice for many dark web black markets
• Common in non-consentual mining operations
• Used for 44% of all cryptocurrency ransomware attacks
• Used by extremists who were deplatformed by traditional finance

So far Monero is anonymous, but suffers nevertheless under the same problems and issues described within this article.

Mining cryptocurrency is competitive. The outcomes are predictable: those with more mining power earn more block rewards.

More mining power → More block rewards → More funds to invest in more mining power

Anyone can run a miner, but the rewards are proportaional to your downline investment: The wealthy take more money from a finite pool.

Cryptocurrency is a pyramid scheme. The block reward system is explicitly designed such that wealth and income moves from the bottom to top, giving therefore even more resources to invest in better equipment and / or doing attacks to misuse other people's hardware. In general to say: The access to mining hardware far outstrips the resources of new people entering, especially anyone lacking millions to invest upfront. So much for the often praised and mentioned “making all people equal” as the whole system is for sure not oriented on equality but on trading and gambling.

Cryptocurrency problems are more subtle than outright abuse: The integrity and trust of the entire software sphere has sharply declined due to cryptocurrency. It sets up incentives for new projects, where developers are no longer trying to convince you to use their software and project because it’s good, free and permissive licensed and working, but because they think that if they can convince you it will make them rich.

Cryptocurrencies have high impact on economic issues, especially when it comes towards electronic waste and emissions. So let's go into some further details: Therefore everyone needs to understand that most proof-of-work miners use Application-specific integrated circuits (ASICs), resulting in:

• Thrown out as soon as faster hardware is available
• Once obsolete, not useful for anything else
• Pollution of heavy metals, production chemicals
• Disruption of the global electronics supply chain

Bitcoin alone as one famous cryptocurrency produces 30.7 kT of electronic waste per year, similar to the Netherlands. Included within are 272g of waste per transaction on average (Source).

Proof-of-work cryptocurrencies directly monetize the use of electricty. It fundamentally derives value from of energy waste. Traditional financial systems use energy to maintain the ledger, but the ledger itself is an abstraction for value that exists independently of the energy use. This is inherently a much more efficient design.

Nobody has further imagined what kind of infrastructure would be needed if all mankind would use cryptocurrencies: Do we have the technical requirements generating such amount of energy needed? And can we accomplish the growing requirements for the hardware with every new reached level of complexity to be computed? What happens with the discarded hardware? Those appliances are very specialized and not for common usage. All those questions were not answered until today and endanger our environment on-going with the purest form of ignorance and arrogance.

That’s what cryptocurrencies are all about: not novel technology, not empowerment, but just making more money. They have failed as any other kind of actual currency outside of some isolated examples of failed national economies. No, cryptocurrencies are not currencies at all, they are just investment vehicles. Toolsets for making the greed rolling. They are based on questionable framework-implementations and besides the surely good meant idea they are nowadays nothing more than a technical failed, harmful experiment with uncontrollable social and economic damages.

Hyperbola won't include any of them: No Bitcoin, no Ethereum and also no Monero. At no time, under no circumstances. We also don't accept donations done with cryptocurrencies as we also think that there are enough possibilities to support the project. If people do not want financial support under their name or synonyme, they can use for sure different ways to support, but for sure not with cryptocurrencies!

We as project have no interest supporting false claims, clear lies and illusions, so people believe further into these. Yes, other projects and systems include software and libraries, but this does not approve anything more than those projects do not take any further stance protecting their users and people in general. Yes, this maybe look alike Hyperbola is trying to patronize or treat individuals nearly not fair, but those accusations and allegations are only more of the same paraphrased tools to keep the status quo working. If you think this is wrong, please stop a moment further and think about many other comparable situations were not questioned and just accepted in the past because of informal fallacies and misguiding arguments. That’s what cryptocurrency is all about: not novel technology, not empowerment, but making money, exploiting people and environment at the same time.

Furthermore this article shows that people associate wrong promises with cryptocurrencies: In depth the whole topic is wide complex and hard to understand in all technical aspects and details. So the majority is going not into the details but on the often mentioned illusions and defend those even beyond with more false arguments and accusations against critics. It is beyond realistic that there will be any further change and to engage further into cryptocurrencies is the same senseless as to await from until today not invented technologies saving our environment. This does not mean there should be no research, but to think “cryptocurrencies” could be adapted for all human beings is not working at any point and only making our situation more worse! In this current case a good-meant concept was left for people to take over, the results speak for their own and telling only the common wrong points: Some early adopting persons search for more people participating so they can also adapt more income. Without new participants the whole illusion would fail.