Dogecoin's inventor looks to the past for insight into the future • Hacker News Board

Re: Dogecoin's inventor looks to the past for insight into the future

#191

Post by trevelyan » Fri, Jan 12, 2018, 9:48 PM UTC

deegles wrote: post #118

trevelyan wrote: post #81

Earlier quoted context omitted.

> The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. It actually would deal with the issue that led to the GFC. Remember --- the problem wasn't that there were fraudulent mortgages -- it is that these mortgages were packaged and repackaged in ways that deliberately obscured the risk involved so that people were buying stuff that had no under…

Pricing a CDO is an NP-complete problem, so having them "transparent" on a blockchain does nothing. https://www.bogleheads.org/forum/viewtopic.php?t=44818

> it is not possible even in principle to tell if the ibank has rigged a CDO to have more than it's share of lemons!

Yes, you can purchase a bad CDO on a blockchain just as easily as you can purchase bad real estate in real life. Nothing prevents humans from misrepresenting data. But that isn't the point of the blockchain.

The point is that the transparency of the blockchain lets you (and others) know when you're holding a lemon, because you can see in real-time that no-one is paying off the mortgages in your CDO. What you do when that happens is a good question and the blockchain can't help [1], but it doesn't crash the entire market because people can tell the difference between your CDO and the quality ones that are still 100% good.

[1] it actually can help in one important way -- it provides an indisputable record of contract execution and payments that is not contained within the computer system of your counterparts (the bank). So if there is fraud it will be much easier to prove it to the courts than if you need to subpoena records out of the bowels of a corporate banking system.

Re: Dogecoin's inventor looks to the past for insight into the future

#192

Post by Balgair » Fri, Jan 12, 2018, 9:48 PM UTC

wyldfire wrote: post #75

Dogecoin is kinda like a control/placebo for real cryptocoins. And the fact that it exploded without providing real distinct utility apart from existing coins is an indication that something is indeed wrong.

I love this and am going to steal the phrasing.

Doge is an absurdity. Like "Cards Against Humanity" or the "C'est non un Pipe" paintings. That it can be considered to be 'legit' or anything else is fantasy.

Anyone that is investing in Doge is a fool. Unfortunately, there are just too many damn fools.

Re: Dogecoin's inventor looks to the past for insight into the future

#193

Post by CPLX » Fri, Jan 12, 2018, 10:13 PM UTC

asciimo wrote: post #184

CPLX wrote: post #169

Earlier quoted context omitted.

Stocks are an investment in productive assets. Somewhere down the chain stocks invest in actual production value, which creates goods or services that people use, and increases the sum total of wealth in the world. Buying the stock is buying the rights to a stream of income based on that productivity. These "investments" in cryptocurrency don't have that aspect whatsoever. There is no claim on productive enterprise i…

> There is no claim on productive enterprise involved That's not true. Many coins offer practical solutions to real world problems. Whether they are adopted at scale is the gamble. Very similar to betting on companies with stock.

Theoretically. But it's kind of like betting on a 4 person seed stage company by raising a $3bn Series F round. Except with no actual legal ownership claim on the productive assets of the company. Which means it's actually nothing like buying regular company stock at all.

Re: Dogecoin's inventor looks to the past for insight into the future

#194

Post by tehlike » Fri, Jan 12, 2018, 10:14 PM UTC

asciimo wrote: post #184

CPLX wrote: post #169

Earlier quoted context omitted.

Stocks are an investment in productive assets. Somewhere down the chain stocks invest in actual production value, which creates goods or services that people use, and increases the sum total of wealth in the world. Buying the stock is buying the rights to a stream of income based on that productivity. These "investments" in cryptocurrency don't have that aspect whatsoever. There is no claim on productive enterprise i…

> There is no claim on productive enterprise involved That's not true. Many coins offer practical solutions to real world problems. Whether they are adopted at scale is the gamble. Very similar to betting on companies with stock.

Ish. They solve some problems, but they do not intend to solve the hard part - the adoption for real world uses.

Re: Dogecoin's inventor looks to the past for insight into the future

#195

Post by tehlike » Fri, Jan 12, 2018, 10:19 PM UTC

georgeecollins wrote: post #106

throwaway30yo wrote: post #25

DOGE is a pretty good currency to use for moving money between exchanges. That is why its used. If BTC had low/no transaction fees and was fast, people would have less incentive to use DOGE. Overvalued? Its possible but I think the entire crypto market is actually insanely undervalued. I was talking to my financial advisor the other day and he said pretty much 100% of people now are asking him about crypto and are co…

It is very faulty logic to say that because .coms got to 7 trillion market cap (and as an aside, isn't that whole exchanges, not just technology stocks?) we should expect crypto currencies to go much higher than 0.7 trillion valuation. The analogy between the two things makes sense in that they were both popular investments, but otherwise are different in many ways.

The difference between two bubbles was the float involved in them, and liquidity. Currently a big portion of the market cap is due to "to have 1b dollar market cap, pay 1$ for 1^-10 of the company" phenomenon.

Re: Dogecoin's inventor looks to the past for insight into the future

#196

Post by nerfhammer » Fri, Jan 12, 2018, 10:22 PM UTC

IronKettle wrote: post #102

aardvark291 wrote: post #97

Earlier quoted context omitted.

Bob is out $1000 until he finds a "greater fool". The zero-sum aspect occurs if at some point all participants cash out.

This argument is also true of any equity that doesn't pay out dividends. Most people wouldn't consider the stock market to be a zero-sum game. Maybe in the ultimate long-term, but not within a time frame that's meaningful for anyone.

You're forgetting book value and future earnings valuation.

If a company earns $X billion per year, even if they don't issue a dividend, if their market cap dropped to fifty bucks an acquirer could swoop in and pay themselves the company's earnings directly for as long as it keeps running, or shut it down and sell off the book value for a profit.

If there's no dividend, any earnings + book value still exists as a potential profit to someone who would own the company. So you just have to assume that in the future someone would be willing to buy $X for $X-1.

Re: Dogecoin's inventor looks to the past for insight into the future

#197

Post by stordoff » Fri, Jan 12, 2018, 10:26 PM UTC

statoshi wrote: post #170

Tommah wrote: post #168

At this point, if you put Dogecoin and Bitcoin next to each other, Bitcoin looks like the joke. It's slow, the fees are too high, and its developers won't address these problems.

Sounds like you're looking at the wrong metrics. Dogecoin had 0 commits to its main repository in 2017. Compare that to 3,277 commits to Bitcoin Core alone. Bitcoin has scaling issues that developers are addressing with second layer networks because tons of people are using Bitcoin. Dogecoin doesn't because it has so few users that the demand for block space is well below the available supply.

I don't think commit numbers alone tell you the full story either (e.g. FLAC going years between releases, not because it's abandoned but because it's basically done). The 1.14-dev branch seems active enough anyway: https://github.com/dogecoin/dogecoin/tree/1.14-dev

Re: Dogecoin's inventor looks to the past for insight into the future

#198

Post by bitoneill » Fri, Jan 12, 2018, 10:28 PM UTC

cornyNetHandle wrote: post #112

ummjackson wrote: post #4

Earlier quoted context omitted.

(author here) I agree! I was calling out Bitcoin's initial goals in the article but don't 100% align with them myself. Financial institutions came to exist for a reason and I'm really not on board with everyone "being their own bank" as I feel it'd be a step backwards from what we have today. What I do agree with is the need for more audit-able, accountable systems so the institutions we trust are less susceptible to…

What I never understood with the blockchain is the idea that it would change the politics of finance in favour of the little guy. As far as I can tell, financial institutions are exceedingly well practiced at co-opting new monetary systems, as they have been doing exactly that for a very long time, so I never thought that a new model of ledger was ever going to really faze them.

They are doing that now with Ripple/XRP but I don't see it as a threat but more as a welcome competitor to other crypto currencies. Not every coin needs to be decentralized and anonymous.

Re: Dogecoin's inventor looks to the past for insight into the future

#199

Post by AgentME » Fri, Jan 12, 2018, 10:31 PM UTC

cornyNetHandle wrote: post #183

temp-dude-87844 wrote: post #61

Earlier quoted context omitted.

As others are saying, Satoshi made some political-sounding statements about financial systems around the time of release, but the paper only refers to facets of traditional financial institutions in measured, objective terms. Then again, given that Satoshi's true identity is unknown, a lot of this is necessarily speculation by interpreting a small set of clues.

Satoshi worked online with a group of developers for more than a year while keeping perfect operational security. Developed a solution to the byzantine generals problem, but has no published maths papers, otherwise something would have come up through text analysis. Designed bitcoin as a financial instrument, indicating inside knowledge of the banking industry. Has mined enough bitcoin to be on the list of the world'…

>Designed bitcoin as a financial instrument, indicating inside knowledge of the banking industry.

what

Bitcoin is just the clever but natural progression from previous cryptographic cash systems like b-money. The cypherpunks mailing list had long been interested in making more decentralized cryptographic cash systems along those lines. The fact that one of them finally combined the right cryptographic primitives in the right way to make such a system is hardly a sign of any insider knowledge or outside influence.

The creation of Bitcoin was by someone who had been following the cypherpunks' progress in the area for a long time, and finally noticed a clever way to combine standard tools to get the job done. There's certainly nothing superhuman about it. It hardly looks like a problem that was solved by a government throwing money and a team of pros from out of nowhere at it.

Re: Dogecoin's inventor looks to the past for insight into the future

#200

Post by noddy1 » Fri, Jan 12, 2018, 10:49 PM UTC

openasocket wrote: post #167

peterjlee wrote: post #113

Earlier quoted context omitted.

It wasn't "The sort of activity which led to the financial crisis" that inspired bitcoin. After the crisis happened the US government funded the massive bailout by printing more money. It turned out to be a "good" decision since it prevented a catastrophic economic failure but it did cause more inflation and some people weren't happy that a government can just print more money on a whim. So that's how the bitcoin cam…

The government didn't actually print any money, the central banks just acted as a "lender of last resort," which works just as well in Bitcoin as it does in cash.

They printed $4+ trillion in the aftermath and gave it to banks.