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Ask HN: Why crypto is rising so fast when its not creating value?

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Re: Ask HN: Why crypto is rising so fast when its not creating value?

#81

Post by mohanmcgeek »

10000truths wrote: post #12

Cryptocurrency is backed by the same thing as any other currency: popularity and consumer confidence. Whether such sentiments are "warranted" or "deserved" is a subjective matter, but that is irrelevant to determining its economic influence - enough people have invested in it for network effects to all but guarantee its continued relevance.

> the same thing as any other currency: popularity and consumer confidence

Real money is backed by your obligation to pay taxes in that currency.. not popularity or confidence.

Re: Ask HN: Why crypto is rising so fast when its not creating value?

#82

Post by keyle »

58x14 wrote: post #4

We’re in a hyperinflationary period. Loans are extremely inexpensive, cash is cheap. I suspect the majority of influx in crypto is due to an abundance of fiat. With that said, there’s quite a lot going for Ethereum and defi as a sector. Major tech players like Google are funding many web3 startups. Facebook is fully embracing the “metaverse,” whatever the f** that is. Tesla is trading at some ridiculous multiple of e…

It's true. Every time governments have given a cash bonus away, these "instruments" took a major lift for no fundamental reason.

Re: Ask HN: Why crypto is rising so fast when its not creating value?

#84

Post by GamblersFallacy »

moepstar wrote: post #78
a_square_peg wrote: post #55

I think crypto space has managed to create a class of unregulated financial instruments and markets - I feel like I'm watching what would happen if the stock market was not regulated at all. If I were Wall Street trader, I think this is really fascinating - sufficient amount to be interesting (billions of dollars at play) and regulators are yet to make sense of what's going on. FYI, there are less than 5000 publicly…

Actually, it's way more than 6000.. CoinMarketCap lists 13684, Coingecko lists 10394 - which probably includes a truckload of BSC "shitcoins", getting more by the minute...

Actually, its way more than 10394.

Uniswap v2 factory contract returns 55,319 trading pairs.

On the etherscan readContract page for the uniswap factory, the allPairsLength method returns index size.

https://etherscan.io/address/0x5c69bee701ef814a2b6a3edd4b165...

Re: Ask HN: Why crypto is rising so fast when its not creating value?

#85

Post by [deleted] »

philosopher1234 wrote: post #36
DennisP wrote: post #29

Earlier quoted context omitted.

The question was why the price of crypto is rising so fast. The answer, at least for Ethereum, is that it provides a service that some people value enough to pay for. The fact that philosopher1234 doesn't value those services just means it's very slightly less valuable than it otherwise would be.

“People will pay money for it” is not a useful definition of value. People pay money for assassination or vengeance and many extremely destructive things. What use is there in labeling these things as valuable?

[deleted]

Re: Ask HN: Why crypto is rising so fast when its not creating value?

#86

Post by DennisP »

mohanmcgeek wrote: post #79
swalsh wrote: post #7

I think Crypto is a bunch of things to a bunch of people. Some see it as a fun way to make a quick buck, some see it as an alternative to gold in a time with unusual inflation of the dollar. I see it as the future of the web. There's a lot of energy coming around the concept of Decentralized Apps. or Web 3.0, today we have web 2.0 with large centralized websites ran by huge tech monopolies. Regardless of your politic…

Even if we assume cryptocurrencies have some role to play in the future dWeb, wouldn't that be the new currencies created by those dWeb services and not these ones being hyped right now?

Ethereum's ENS works pretty well as a dWeb name service.

Re: Ask HN: Why crypto is rising so fast when its not creating value?

#87

Post by DennisP »

belltaco wrote: post #61
MisterBiggs wrote: post #13

Speculation of meme coins has dominated the news recently but there are some amazing coins with real utility. Ethereum tends to get viewed negatively because it can become so insanely expensive to do anything on the chain but in reality that means that the market is willing to pay for those transactions to occur which suggests that there is some real utility to the ecosystem that has real world value.

But those people are speculators looking to make a quick buck.

Trading and finance are the main uses right now because scaling is very limited, so only high-value transactions are affordable.

When rollups plus sharding get it to tens of thousands of tx/sec in a couple years, we might see other applications take hold.

Re: Ask HN: Why crypto is rising so fast when its not creating value?

#88

Post by DennisP »

rvz wrote: post #64
MisterBiggs wrote: post #56

Earlier quoted context omitted.

> So it makes sense for someone to pay >= $1,000 in fees to approve and move / swap $1 - $100 worth of tokens? That's like arguing that all container ships are useless because I only order a few dozen small packages a year. The gas prices are set by supply and demand so the value created by the gas prices must be an acceptable cost for the amount of value the transaction is creating. Just because something is cost pr…

> Just because something is cost prohibitive at your scale doesn't mean it is for everyone. So I can use Ethereum to pay for my groceries then? Everyone needs to eat. It's creator painfully admitted that gas fees should not be at those prices in the first place. Good to know that you can't even send a test transaction these days.

That's being fixed. The main chain can only do a few dozen transactions per second, but fees are a lot lower on rollups which can do a couple thousand, and sharding will multiply that by a factor of twenty initially and a lot more later.

Re: Ask HN: Why crypto is rising so fast when its not creating value?

#89

Post by DennisP »

philosopher1234 wrote: post #36
DennisP wrote: post #29

Earlier quoted context omitted.

The question was why the price of crypto is rising so fast. The answer, at least for Ethereum, is that it provides a service that some people value enough to pay for. The fact that philosopher1234 doesn't value those services just means it's very slightly less valuable than it otherwise would be.

“People will pay money for it” is not a useful definition of value. People pay money for assassination or vengeance and many extremely destructive things. What use is there in labeling these things as valuable?

In economics, value is purely subjective. If someone is willing to pay for it, then it has value to that person. To answer OP's simple question of why crypto has a high price, the economic definition is what you need.

You're looking at a more absolute definition of value that has little to do with the price of things. That's a worthwhile discussion as well but has little to do with OP's question.

Re: Ask HN: Why crypto is rising so fast when its not creating value?

#90

Post by DennisP »

mohanmcgeek wrote: post #81
10000truths wrote: post #12

Cryptocurrency is backed by the same thing as any other currency: popularity and consumer confidence. Whether such sentiments are "warranted" or "deserved" is a subjective matter, but that is irrelevant to determining its economic influence - enough people have invested in it for network effects to all but guarantee its continued relevance.

> the same thing as any other currency: popularity and consumer confidence Real money is backed by your obligation to pay taxes in that currency.. not popularity or confidence.

People manage to come up with mediums of exchange even in the absence of taxing governments.
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