S&P Dow Jones Indices to launch cryptocurrency indexes in 2021 • Hacker News Board

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#141

Post by diab0lic » Thu, Dec 03, 2020, 5:45 PM UTC

JxLS-cpgbe0 wrote: post #105

unclesams-uncle wrote: post #82

Earlier quoted context omitted.

> In my opinion the value is in the network and the ability to move money instantly (or at very least faster than traditional methods), securely, to anywhere in the world for a fraction of a cent. That ability alone is valuable and hasn't existed until now. I spent some time working in a relatively-unknown but high volume clearing bank. Banks can and do move billions instantly, and have done so for years through SWIF…

SWIFT gpi can't compete with Ripple on a number of important issues. Ripple transfers don't pass through multiple banks and the actual value of the XRP is transferred, not just the data (of the SWIFT ledger). > Banks can and do move billions instantly We're not just talking about banks, and if I open my own bank tomorrow I can't use SWIFT the same day (the way I can with Ripple), I have no relationships with correspo…

I think what the grandparent post is trying to make clear is that there is no technical impediment to moving money instantly as some others have claimed here. It isn't that the amazing technology of blockchain has allowed us to achieve this for the first time. The reality is that this completely unregulated space is allowing people to sidestep a bunch of regulation and thus move money faster. If crypto becomes an issue the powers that be are going to do one of two things;

1) Regulate crypto such that it isn't an issue anymore and is in line with existing systems.

2) Improve the regulation such that the existing monetary systems move money more quickly/easily/whatever.

Crypto has an edge in neither of these situations.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#142

Post by dehrmann » Thu, Dec 03, 2020, 5:46 PM UTC

iamspoilt wrote: post #79

nostrademons wrote: post #67

Earlier quoted context omitted.

It's analogous to investing money in USD or GBP before those countries were given a license to print as many USD and GBP as they wanted. Before then (1931 for the pound and 1933 for the dollar, though they maintained de-facto parity with gold until 1971), dollars and pounds were considered good investments. That's why we had bank runs: people thought their money would be safer under their mattress, and preferred to o…

It is fixed at 21M but technically, this can be changed through an Economic Majority [0][1]. [0] https://en.bitcoin.it/wiki/Economic_majority [1] https://bitcoin.stackexchange.com/questions/3945/how-could-t...

This should actually scare "investor" speculators: if the number of mining pools gets much smaller, miners collude, or someone performs a DDOS attack some miners, fundamental assumptions of the currency go out the window.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#143

Post by siliconmountain » Thu, Dec 03, 2020, 5:46 PM UTC

elevenoh wrote: post #12

No brainer considering to buy ETH on the stock market via grayscale you're paying a 104% premium. The demand (e.g. within registered & margin accounts) is there. https://ycharts.com/companies/ETHE/discount_or_premium_to_na... Aside: Seems covid is accelerating understanding & adoption of crypto. I remember when I couldn't perform a wire transfer for a full week back in March '20 - at one of the most reputable banks g…

I don't understand NAV premiums when it comes to ETH. What does this mean?

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#144

Post by dehrmann » Thu, Dec 03, 2020, 5:47 PM UTC

onlyrealcuzzo wrote: post #132

nostrademons wrote: post #67

Earlier quoted context omitted.

It's analogous to investing money in USD or GBP before those countries were given a license to print as many USD and GBP as they wanted. Before then (1931 for the pound and 1933 for the dollar, though they maintained de-facto parity with gold until 1971), dollars and pounds were considered good investments. That's why we had bank runs: people thought their money would be safer under their mattress, and preferred to o…

You can't print gold, and BTC is appreciating much faster than gold (or any commodity or store of value or even other cryptocurrencies). It is not appreciating because fiat money is being devalued. That can account for -- at max -- 20% of the price increase. It's appreciating because of speculation.

People also lose bitcoins, I assume easier than losing physical currency or a bank account.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#145

Post by spir » Thu, Dec 03, 2020, 5:47 PM UTC

iamspoilt wrote: post #30

Someone please explain this to me: How is any cryptocurrency even considered an investment vehicle? I would classify myself as Boglehead and I believe in the fundamentals of investing in stocks because in all it's technicality (and given the buy-and-hold strategy), you are investing in a business by owning a part of it which naturally means that you will and do get the returns on it, both in terms of profits (dividen…

One answer to this question is that Ethereum will soon become a "real investment" because fees will accrue to ETH holders and the huge expense of electricity-intensive proof of work mining will be discontinued forever.

Here is how it'll work

- in 2021, an improvement to the Ethereum network known as EIP-1559 will launch, causing a portion of all new transaction fees to be burned/destroyed, which is effectively a "stock buyback" for ETH. This will be the first time that ETH holders receive any kind of "earnings per share". But, it's not enough:

- EIP-1559 alone is not enough for ETH to be a profitable investment from a cashflow perspective. The problem is that Ethereum's proof of work mining is extremely expensive, like Bitcoin's. Ethereum will run at a "net loss" until proof of work is discontinued.

- two days ago, the Ethereum v2 "beacon chain" launched after years of research and effort. This "beacon chain" is currently not used for any ethereum transactions and won't be for two years. Here is a 3rd party UI for exploring the beacon chain https://beaconcha.in/

- in 2022, the main ethereum blockchain will merge with the new ethereum v2 beacon chain and proof of work mining will go away forever. The new system, proof of stake, is dramatically less expensive. It's so cheap that it's effectively free.

- in 2022, with proof of stake fully live, ethereum's transaction fees will effectively accrue to ETH holders and there will be no material expenses to offset this income. The result is that ETH will become a real investment vehicle from a cashflow perspective.

Learn more https://ethereum.org/en/eth2/#roadmap

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#146

Post by clarky07 » Thu, Dec 03, 2020, 5:47 PM UTC

unclesams-uncle wrote: post #82

vocatus_gate wrote: post #33

Earlier quoted context omitted.

I'll try to use my elevator pitch: With cryptocurrency, you're right they're not an "investment" in the traditional sense. Right now more of a long-term gamble. In my opinion the value is in the network and the ability to move money instantly (or at very least faster than traditional methods), securely, to anywhere in the world for a fraction of a cent. That ability alone is valuable and hasn't existed until now. The…

> In my opinion the value is in the network and the ability to move money instantly (or at very least faster than traditional methods), securely, to anywhere in the world for a fraction of a cent. That ability alone is valuable and hasn't existed until now. I spent some time working in a relatively-unknown but high volume clearing bank. Banks can and do move billions instantly, and have done so for years through SWIF…

so why does it still take me 3+ business days to move money between banks? I assume it's just because they use that float to make money, but it still sucks. i for one like transactions clearing in a few seconds rather than a few days.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#147

Post by wsc981 » Thu, Dec 03, 2020, 5:48 PM UTC

misnamed wrote: post #131

wsc981 wrote: post #126

Earlier quoted context omitted.

I see Bitcoin as a hedge against the USD and EUR as I feel the currencies will be in trouble in the coming years. I see Bitcoin as a store of value. Keeping some of my assets in Bitcoin keeps some of my assets out of the hands of governments and banks and will not be affected by devaluation. There's no risk of a bail-in [0] for example. I don't invest all my assets in Bitcoin, currently perhaps 10% of my net worth. I…

If you want to hedge against inflation, I suggest TIPS and maybe a bit of gold. I would also point out that the market expectation clearly isn't aligned with currencies being 'in trouble' - very low inflation in general right now.

> If you want to hedge against inflation, I suggest TIPS and maybe a bit of gold.

I need to read up on TIPS, haven't heard about that before. Yes, gold is a decent option as well. However I view Bitcoin as digital gold and it has a few nice properties that gold doesn't have (of course gold has some good properties that Bitcoin doesn't have). One of the aspects of Bitcoin that I appreciate the most, is that it's very easy to carry around with me, for example when travelling on an airplane to another country. The same is not true for gold.

> I would also point out that the market expectation clearly isn't aligned with currencies being 'in trouble' - very low inflation in general right now.

Inflation is actually really high, but its mostly hidden in rising prices for stocks and real estate.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#148

Post by joosters » Thu, Dec 03, 2020, 5:48 PM UTC

Osiris wrote: post #128

Triv888 wrote: post #119

Earlier quoted context omitted.

Bitcoin specs change all the time and they could decide to increase the supply

Being a decentralized application, certainly the core devs could attempt to make such a change but I guarantee that would cause a fork and the community would decide which fork they want to put their mining effort into.

The 'community' at large doesn't mine Bitcoin. A few gigantic mining farms mine bitcoin, and their self-interest could well change the bitcoin issuance. It's not as decentralised as you think.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#149

Post by Imnimo » Thu, Dec 03, 2020, 5:49 PM UTC

nostrademons wrote: post #67

iamspoilt wrote: post #30

Someone please explain this to me: How is any cryptocurrency even considered an investment vehicle? I would classify myself as Boglehead and I believe in the fundamentals of investing in stocks because in all it's technicality (and given the buy-and-hold strategy), you are investing in a business by owning a part of it which naturally means that you will and do get the returns on it, both in terms of profits (dividen…

It's analogous to investing money in USD or GBP before those countries were given a license to print as many USD and GBP as they wanted. Before then (1931 for the pound and 1933 for the dollar, though they maintained de-facto parity with gold until 1971), dollars and pounds were considered good investments. That's why we had bank runs: people thought their money would be safer under their mattress, and preferred to o…

The supply of capital-B Bitcoin is 21M, but at any time, anyone can create Bitcoin2, which is an exact clone of Bitcoin but with a fresh chain. Any Bitcoin2 token has exactly the same utility as a Bitcoin token in principle - the only difference is that, for now at least, lots of people are mining Bitcoin and no one is mining Bitcoin2. If there comes a day when a lot of people think there should be 42M bitcoins, instead of 21, what would stop them from just starting a second chain? Granted, these "a lot of people" are not a "central authority", but is there really a difference when it comes to the question of bitcoin's total supply? As long as those people have enough compute they're willing to put to work mining Bitcoin2, there's nothing stopping them from creating more tokens that are just as useful as original Bitcoins.

And, of course, they could freely choose to make Bitcoin2 have a trillion tokens instead of 21M, or whatever number they want.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#150

Post by puranjay » Thu, Dec 03, 2020, 5:49 PM UTC

I've been dabbling in crypto since the lockdown (all red, but I've had fun) and this space is like the wild west early days of the internet, with even more scammers. We're past the heady ICO days but now, all the scams have moved to Uniswap.

And I might be guilty of being elitist, but I rarely, if ever, see founders with A+ tier credentials (Ivy league education, FAANG/Investment banking/Mckinsey et al) starting crypto businesses.

Most coins are also like penny stocks - the trading volume is so low that a single whale can cause big shifts in valuation, making pump and dump schemes extremely easy.