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The cryptocurrency bubble is strangling innovation?

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Re: The cryptocurrency bubble is strangling innovation?

#31

Post by steego »

brndnmtthws wrote: post #16

Alternative perspective: maybe cryptocurrencies are valuable and represent real innovation?

The question isn't if cryptocurrencies are valuable and represent real innovation. The question is if the current valuation of crypto currencies is strangling their ability to innovate.

One reason could be the high valuations are creating a tunnel vision that's hyper-focused on realizing returns rather than adding additional value.

Here's one theory: http://danariely.com/2008/11/20/what%E2%80%99s-the-value-of-...

Re: The cryptocurrency bubble is strangling innovation?

#33

Post by viggity »

acdha wrote: post #14
thisisit wrote: post #6

> It remains an open question whether even much, much lower fees would be viable in the long run. The problem is not fees rather usability. If today I speak to a layman about bitcoin he is confused. It doesn't help that people start talking about hardware wallets, multisigs, Segwit etc. Most of those guys find that using cryptocurrency is a pain and want to stick to real money. Yes, it doesn't stop them from speculat…

> One thing has to be noted, while there is a constant parallel drawn with dot com people forget that there was at least 7-8 years head start for a layman to understand "internet". Bitcoin has been around for 8 years so it's not like there hasn't been enough time. The difference is that the internet was easy to explain to people because it had a number of immediately useful applications: you could almost immediately…

Doesn't solve a problem that average american has right now.

The key feature of crypto currency (to me) has always been that it can't be easily manipulated by a government. Specifically with bitcoin, were it not so expensive and have such high fees, it could be of real use in countries with hyperinflation and black markets (Venezuela, Zimbabwe, etc). Hopefully bitcoin and the myriad of alt-coins can fill the gap.

Once it takes a foothold in a failed state, I can only imagine it spreading.

I hope that hyperinflation and/or economic collapse don't come to America/Western Europe. But i'm not so naive to think that it can't.

Re: The cryptocurrency bubble is strangling innovation?

#34

Post by pyb »

api wrote: post #19

There's another issue that I don't see mentioned much here. I was contemplating writing a blog post about it. Over the past year I've seen a serious decline in early stage angel investment. I've talked to a lot of people who have said similar things. What I've heard and in some cases observed is that it's all going to crypto. All the people who would be making speculative angel investments are now buying into cryptoc…

Furthermore, we're starting to see that all those crypto startups have made so much money from their ICOs that they're starting to distort the job market as well.

The kind of engineers who'd be naturally drawn to smaller startups and didn't want to work for Google or Facebook, are now being attracted to the crypto space in ever greater numbers. For that reason, it will become even harder to start a non-crypto startup in the near future.

I think this will become more and more obvious throught 2018 and 2019.

Re: The cryptocurrency bubble is strangling innovation?

#35

Post by api »

659087 wrote: post #32

Depends on what kind of innovation you're talking about. If we're talking about blatant internet-based scams and cash grabs, for example, ICOs have fueled lots of innovation in that sector.

That's yet another nasty thing about this-- namely the amount of money scammers, con artists, and the mob are making off this bubble. That money is going to go to fund a lot of not-so-good things in coming years.

Re: The cryptocurrency bubble is strangling innovation?

#36

Post by fortythirteen »

cantrip wrote: post #27
fortythirteen wrote: post #15

More than anything, the cost to transact with Bitcoin or Etherium (which this article weirdly focuses on), stagnates mainstream adoption. Sure, I could create my own coin to use as an in-app currency for my project, but why ? A coin is only worth what you can buy with it, and nobody is going to sell anything worthwhile with some random, in-app coin. Even Bitcoin was just abandoned by Microsoft, because it's so overpr…

I don't think it's weird to focus on Ethereum as, as the article correctly states, most new currencies are not a separate chain themselves but are simply tokens on the Ethereum blockchain. Ethereum is also the only blockchain with a real developer community, and the article focuses on building applications. Microsoft didn't abandon Bitcoin because it was overpriced, they abandoned it because it was volatile. One coul…

> Microsoft didn't abandon Bitcoin because it was overpriced, they abandoned it because it was volatile.

It was "volatile" when they adopted it. It's now volatile and overpriced. If MS thought that Bitcoin was a good investment, volatile or not, they would have stuck with it. "Volatile" is acting as an excuse for their real sentiment, that it's time to short Bitcoin.

Re: The cryptocurrency bubble is strangling innovation?

#37

Post by brndnmtthws »

steego wrote: post #31
brndnmtthws wrote: post #16

Alternative perspective: maybe cryptocurrencies are valuable and represent real innovation?

The question isn't if cryptocurrencies are valuable and represent real innovation. The question is if the current valuation of crypto currencies is strangling their ability to innovate. One reason could be the high valuations are creating a tunnel vision that's hyper-focused on realizing returns rather than adding additional value. Here's one theory: http://danariely.com/2008/11/20/what%E2%80%99s-the-value-of-...

Strangling? No. That's like saying Amazon's success is strangling retailers.

Re: The cryptocurrency bubble is strangling innovation?

#38

Post by takeda »

cantrip wrote: post #27
fortythirteen wrote: post #15

More than anything, the cost to transact with Bitcoin or Etherium (which this article weirdly focuses on), stagnates mainstream adoption. Sure, I could create my own coin to use as an in-app currency for my project, but why ? A coin is only worth what you can buy with it, and nobody is going to sell anything worthwhile with some random, in-app coin. Even Bitcoin was just abandoned by Microsoft, because it's so overpr…

I don't think it's weird to focus on Ethereum as, as the article correctly states, most new currencies are not a separate chain themselves but are simply tokens on the Ethereum blockchain. Ethereum is also the only blockchain with a real developer community, and the article focuses on building applications. Microsoft didn't abandon Bitcoin because it was overpriced, they abandoned it because it was volatile. One coul…

> Microsoft didn't abandon Bitcoin because it was overpriced, they abandoned it because it was volatile.

Volatile and also large fees.

Here is Steam describing why it was a pain of using it: http://steamcommunity.com/games/593110/announcements/detail/...

Re: The cryptocurrency bubble is strangling innovation?

#39

Post by leroy_masochist »

> Look at the dot-com boom. A lot of people lost a whole lot of paper money, but it brought us a cheap worldwide fiber backbone and companies like Amazon and Google.

If the point the author is trying to make is that Amazon and Google were made possible by the dotcom boom, and that the collapse of the dotcom bubble was part of the price we as a society had to pay to have the services provided these companies, that's a really really bad argument.

Amazon was founded in 1995 and IPO'ed in 1997, before the IPO market got crazy. Google was founded in 1997 and IPO'ed in 2004 when tech stocks were still a punchline. Neither of these companies is an example of any kind of silver lining for your Uncle Bob losing thousand of bucks after buying into a rapidly appreciating security (or currency) whose underlying value he does not understand whatsoever.

Re: The cryptocurrency bubble is strangling innovation?

#40

Post by adventured »

Robotbeat wrote: post #23

Reading the original Satoshi paper, the point of Bitcoin is to be decentralized/trustless and to enable microtransactions by lowering transaction fees. Both these goals seem to have failed in practice, the latter spectacularly (although other cryptocurrencies have done better in this regard). To truly be trustless, you can't generate keys/addresses on some website like bitaddress or use some other online wallet, as y…

> Both these goals seem to have failed in practice, the latter spectacularly

That will stop being the case once people stop treating all the coins as investment speculations. That won't occur until the bubble pops. After that, with the typical trauma that goes with it due to financial losses, it will become almost impossible to convince people to plow large amounts of money into inflating a given coin (as in the case of so many of the lesser crypto-coins that are seeing musical chair speculation booms).

The speculation on a stray coin to moonshot next, is no different than the speculation on which beanie baby will soar next circa 1998/99. Once the bubble gave way, you could no longer convince anyone that they all should be worth large sums, or that the musical chairs of inflating one beanie baby to the next should continue. It's classic group hysteria and it tends to reverse violently.

Once that occurs, you'll find the exact opposite problem more common: nobody will want to bother wasting any money on nearly any coins, in any regard (whether for transactions or sheer speculation). Group think will shift to nearly all coins as being worthless, as they actually are.

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