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The cryptocurrency bubble is strangling innovation?

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Re: The cryptocurrency bubble is strangling innovation?

#51

Post by fortythirteen »

cantrip wrote: post #46
fortythirteen wrote: post #36

Earlier quoted context omitted.

> 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.

You don't generally hold onto Bitcoin when you take it as payment, you sell it immediately, so no, Microsoft was not "investing" in Bitcoin by taking it as a payment for their products and they're not shorting Bitcoin either. The volatility is what makes it untenable as payment, as you can't sell it fast enough to ensure that you get the same exchange rate you gave to the customer.

> The volatility is what makes it untenable as payment, as you can't sell it fast enough to ensure that you get the same exchange rate you gave to the customer.

Absolutely false. Speculation has driven the value of bitcoin so high that the average transaction fee, at the time of writing this, is about $31. Buying a $59.99 game for Xbox One will cost you $90 in Bitcoin. That is an individual hash, that must be consolidated into a larger wallet for MS to sell off. Consolidating that hash will cost a transaction fee, meaning that, on a $60 game, MS will lose over 50% of the gross profit in a transaction fee.

That alone makes it not worth it. The only thing that would allow them to retain a higher percentage of the transaction would be for the Bitcoin bubble to burst, making that whole $60 worthless.

Bitcoin could be wholly volatile within it's 2016 prices and MS would be just fine. It is directly because of it's exploded, overpriced value that it's untenable as an actual currency.

Re: The cryptocurrency bubble is strangling innovation?

#52

Post by zeroxfe »

qaq wrote: post #50
leroy_masochist wrote: post #39

> 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…

Google bought a ton of dark fiber for cents on the dollar. So the bust did enable Google to develop much more rapidly and with much smaller $ investment.

This applies to pretty much any company/individual that took advantage of the market prices. And not just dark fiber, but pretty much all infrastructure.

Re: The cryptocurrency bubble is strangling innovation?

#53

Post by leoc »

tqkxzugoaupvwqr wrote: post #20
brndnmtthws wrote: post #16

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

Counterpoint: “Dogecoin, a parody cryptocurrency, just broke $2B for its market cap” although development stopped two years ago. https://news.ycombinator.com/item?id=16096119

I'm not sure to what extent doge was ever really a parody, even if it was started as a lark then marketed as zany and relatable. And for a number of years it's been shepherded by a small group of devs who seem to be competent and diligent, and exceptionally up-front and down-to-earth by cryptocurrency standards. (Disclaimer: I know one of them personally. Additional disclaimer: this isn't anything resembling financial advice.) I don't know much about cryptocurrencies, but afaik doge's fairly low transaction fees and continued strong commitment to be inflationary may also justify some of the interest.

https://www.reddit.com/r/dogecoin/comments/7oxi53/developer_...

> I feel some are using our rise to illustrate the absurdity of cryptocurrency pricing (http://uk.businessinsider.com/dogecoin-cryptocurrency-has-ma... for example). To me, in an environment where a cryptoasset with $30 USD equivalent transaction fees has a market cap of over a quarter of trillion dollars, I don't think we're the absurd one. Yes we take ourselves less seriously, but that doesn't mean we're not serious behind the scenes. We're a 4 year old currency with transaction fees barely over a cent and significantly higher throughput than most other cryptocurrencies.

EDIT: Ross has asked me to point out the continuing development at https://github.com/dogecoin/dogecoin/pulls . Version 1.14 is apparently on its way.

Re: The cryptocurrency bubble is strangling innovation?

#55

Post by paxpelus »

paxpelus wrote: post #11
alistproducer2 wrote: post #8

Dapps can be awesome when you want to avoid counter-party risk. Ether Delta is a great example; however, it's super expensive to use ED (every interaction costs $0.80-$1.60) and unless you're playing with a lot of money it's cost prohibitive to use. Even though they had the dns hijacking a while ago, you can still access the market via direct calls to the contract. When it's time to liquidate a large alt holding back…

You may want to have a look on Etherdelta Guard Chrome Extension (FYI: I built it). I open sourced it https://github.com/paxpelus/etherdelta-guard and you can download the plugin here https://chrome.google.com/webstore/detail/etherdelta/beeeoaa... When etherdelta deploys - they call a script of mine that calculates the md5 of their files in github and creates automatically a new version in Chrome Web Store. I use my…

I have been informed by Lann - a member of HN that md5 has security issues. You can find more information here https://en.wikipedia.org/wiki/MD5#Security

I just updated EtherDelta Guard to version 1.1.149 that switches from md5 to sha256 which is secure.

This is why I love HN, people are really helpful and get straight to the point without any fuss.

Re: The cryptocurrency bubble is strangling innovation?

#56

Post by paxpelus »

Tepix wrote: post #48
paxpelus wrote: post #11

Earlier quoted context omitted.

You may want to have a look on Etherdelta Guard Chrome Extension (FYI: I built it). I open sourced it https://github.com/paxpelus/etherdelta-guard and you can download the plugin here https://chrome.google.com/webstore/detail/etherdelta/beeeoaa... When etherdelta deploys - they call a script of mine that calculates the md5 of their files in github and creates automatically a new version in Chrome Web Store. I use my…

Is there an alternative frontend for etherdelta when the website is once again overloaded? Also are open orders only stored on the website?

Open orders are actually transactions that have been made to the smart contract. It is possible to monitor the smart contract and get informed on all the open orders.

You may want to have a look on Etherdelta API if you don't want to use directly the smart contract. https://github.com/etherdelta/etherdelta.github.io/blob/mast...

Re: The cryptocurrency bubble is strangling innovation?

#57

Post by debaserab2 »

fortythirteen wrote: post #51
cantrip wrote: post #46

Earlier quoted context omitted.

You don't generally hold onto Bitcoin when you take it as payment, you sell it immediately, so no, Microsoft was not "investing" in Bitcoin by taking it as a payment for their products and they're not shorting Bitcoin either. The volatility is what makes it untenable as payment, as you can't sell it fast enough to ensure that you get the same exchange rate you gave to the customer.

> The volatility is what makes it untenable as payment, as you can't sell it fast enough to ensure that you get the same exchange rate you gave to the customer. Absolutely false. Speculation has driven the value of bitcoin so high that the average transaction fee, at the time of writing this, is about $31. Buying a $59.99 game for Xbox One will cost you $90 in Bitcoin. That is an individual hash, that must be consoli…

I have a question as a relatively uninformed spectator: where do these transaction fees go and why do they have to be so high?

Re: The cryptocurrency bubble is strangling innovation?

#58

Post by Goladus »

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…

> One could argue that a blockchain's only real world purpose is as a shared database, just as http's only real world purpose is the transfer of data between computers.

So far it seems like the only thing anyone actually makes based on this shared database are new mini-currencies.

Re: The cryptocurrency bubble is strangling innovation?

#59

Post by blueprint »

Virtually the entire article is about Ethereum. Ok, sure, a poorly and intentionally differently designed system is choking at scale. But Ethereum != cryptocurrencies. In fact I would stay very much away from calling it a currency at all since it's not fungible. So I am struggling to see how this article is not just a big false equivalence.

Re: The cryptocurrency bubble is strangling innovation?

#60

Post by Robotbeat »

FLUX-YOU wrote: post #49
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…

>stagnates mainstream adoption Bitcoin/cryptocurrency is stuff for rich and tech-savvy people. - Folks with stressful and demanding jobs probably won't bother with full-time security measures to protect their wallets. - The same group won't have time to watch every piece of crypto news about which service or product is possibly bad/hacked (see electrum wallets). - Extremely high volatility means you need to be prepar…

> Rich people can afford astroturfing services to spread memes and good morale to pump the price. Rich people likely have significant control over hype cycles and may even be pumping other cryptocurrencies to start diversifying.

That's super interesting. We assumed that the decentralization of content brought on by the Internet and social media would put a stop to stuff like that, but instead, due to anonymity, simply painted a veneer of populism over the same old trick. It worked for the election, so why not apply it to manipulate speculative investments?

ICO is a way to get around the reporting requirements of an IPO and the minimum-net-worth requirements for private investments by regular folk (ostensibly to protect them from exactly this kind of asymmetric information, speculative manipulation that occurred in the roaring 20s...).

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