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My Opinion on Blockchain

vladcalin.ro

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Re: My Opinion on Blockchain

#101

Post by xerxespoy »

Closi wrote: post #19
kabocha_ wrote: post #8

For the financial arguments: Treat BTC as if it was in the "precious metal" asset class, but digital. Volatility is still an issue, but it's still a pretty new technology. As a technology, I agree that it's not that impressive. Stop making so many dang vaporware altcoins.

The problem with the argument is it always ends up circular to some extent. I always see something like the below - where crypto enthusiasts always try to argue bitcoin is something different than the current argument being levied against it... Crypto Enthusiast: "Bitcoin is a currency" Crypto Sceptic: "Well it's not a very good currency because of X, Y & Z reasons, and nobody is spending it" Crypto Enthusiast: "Well…

For all it's outdatedness, Bitcoin is actually used as a currency, but typically for high value items such as real estate or private jets, as the fiat mechanisms to transfer large amounts of money, especially across borders can be terribly unreliable and costly. Bitcoin, even used in its largely original form, can be (and is) used to transfer arbitrarily large amounts of money anywhere in the world, conclusively and trustlessly, without intermediaries, within an hour, or more typically ten minutes.

There has never existed a currency that has had such properties previously.

Re: My Opinion on Blockchain

#102

Post by pcthrowaway »

SpicyLemonZest wrote: post #77
programmarchy wrote: post #69

Earlier quoted context omitted.

Crypto total market cap is over $1 trillion, and Bitcoin represents 60% of that. It’s much more valuable than Facebook.

I'm skeptical that market cap is a useful metric here. Owning a cryptocurrency doesn't entitle you to a share of the value generated by that currency, so it's not clear why multiplying the price of 1 BTC by 21 million should produce a meaningful estimate of how much Bitcoin as a whole is worth.

Couldn't the same be said for owning a stock? You can only get what you can sell them for. If you own 1 million shares of a company which has issued 10 million shares and is trading at $5/share, you can't dump your million shares for $5 million, because the price would change as you were trying to sell it

Re: My Opinion on Blockchain

#103

Post by pcthrowaway »

microtherion wrote: post #80
bendergarcia wrote: post #29

Earlier quoted context omitted.

I think this is an interesting point however, banks today aren't just their IT infrastructure. For banks to function there are so many things that have to work, right down to the local branches and ATMs (and physically moving money around). I think this burning enormous amounts of resources argument isn't fully fleshed out yet. You almost have to think about the entire banking system and compare that to the entire cr…

I'm sure the existing banking system takes energy+other resources to maintain. But the incentives in the existing banking system are to look for ways to use LESS of these. Each Kilowatt-hour a bank doesn't use shows up in their bottom line. Proof of works is DESIGNED to waste energy. If tomorrow, you'd make hash computations 1000x as energy efficient, the hashing difficult is designed to adjust to make sure that 1000…

What you've just said here is the reason PoS cryptocurrencies are the way forward. I don't think bitcoin is sustainable as a global currency. The bitcoin network currently uses 1-2% of global energy production, which is already too much!

The mean wealth of an adult on Earth (in USD) is ~$70,849 [1]. For all adults (let's say 70% of the global population, or 5.46 billion), on average, to have even 1% of their wealth stored in bitcoin, and assuming 14.8 million bitcoin in circulation (as 18.5 million have been mined, ~20% have been lost [2]), the bitcoin market rate would have to be $258,243 USD/BTC. This would mean an increase in mining incentive which will likely outpace advances in renewable energy technologies. With ballooning transaction fees, Bitcoin is not even useful for 90% of the world, for the scale of their transactions.

With Ethereum's 2.0 network (which uses PoS), we will have a much more sustainable cryptocurrency that can hopefully be adopted at a global scale without devastating impact on the planet. Perhaps Bitcoin Cash or some other contender with negligible fees will play an important role as well (I'm not sure what the Eth 2.0 transition will mean for mining fees on the Eth network, which are also undesirably high). I'm overall optimistic on blockchain technology as a whole, but I really hope Bitcoin isn't the dominant cryptocurrency in 10 years time

[1] https://en.wikipedia.org/wiki/List_of_countries_by_wealth_pe...

[2] https://www.investopedia.com/news/20-all-btc-lost-unrecovera...

Re: My Opinion on Blockchain

#104

Post by artiscode »

beaner wrote: post #17

> while day-dreaming about selling it for a huge profit (in FIAT currency) This isn't really true. The dream is that crypto becomes the reserve currency itself, and spendable after hard work on scaling solutions. There is no hypocrisy. The Morpheus meme is one of the oldest and strongest that Bitcoin has. [0] > Every advocate promotes holding, which is not what a currency is for Holding is just a new meme for an old…

It is very hard to "save" something that is so volatile. Imagine buying 1 BTC for $47,000 today. If history does repeat itself, it goes down in price tomorrow. The buyer ends up with 1 BTC, that is now worth $20,000. Sure, you still have the original amount of BTC, which is a currency and a reserve currency/asset at the same time. However half of the dollar value is liquid and there is a market for it, the other half is imaginary and wishful thinking for the future. Let's imagine you run into financial problems and you have to sell some of your investments for cash. It would be nice if the buyer could pay the hospital bill in BTC's as they still have 1 BTC, but the hospital wants dollars. BTC's extreme volatility may double or half your savings at any given time. It's all good and dandy if you don't have to sell and you can hold on to it, but if you have to sell, you might both win or lose. I don't think that is how money saving works. It's how gambling works for sure.

Re: My Opinion on Blockchain

#105

Post by oleganza »

rsynnott wrote: post #63
oleganza wrote: post #60

Earlier quoted context omitted.

You know what also encourages spending? Appreciating currency that lets you save money over N days to buy N*$ expensive stuff all by yourself (e.g. start your business) without getting into debt and serving your creditors instead of yourself and your customers.

This feels a bit like "common sense/stands to reason" thinking. In reality, of course, periods of deflation are typically very bad for businesses, particularly small businesses.

I guess we are talking about different deflations.

If the prices fall because economy crashed (e.g. due to an inflated credit bubble beforehand) and now everyone is without spare cash and broken/useless production chains, then sure - no one is buying stuff because life is miserable.

But if the prices fall because everyone's savings exist and appreciate, then arguably, people can afford more things tomorrow than yesterday, which could only cause them to spend and invest more.

Rising prices due to monetary inflation only "stimulate economy" (whatever it means) on a short distance while people have money to spend and are forced to get rid of it for something more useful. But that's not a sustainable game.

Re: My Opinion on Blockchain

#106

Post by Closi »

xerxespoy wrote: post #101
Closi wrote: post #19

Earlier quoted context omitted.

The problem with the argument is it always ends up circular to some extent. I always see something like the below - where crypto enthusiasts always try to argue bitcoin is something different than the current argument being levied against it... Crypto Enthusiast: "Bitcoin is a currency" Crypto Sceptic: "Well it's not a very good currency because of X, Y & Z reasons, and nobody is spending it" Crypto Enthusiast: "Well…

For all it's outdatedness, Bitcoin is actually used as a currency, but typically for high value items such as real estate or private jets, as the fiat mechanisms to transfer large amounts of money, especially across borders can be terribly unreliable and costly. Bitcoin, even used in its largely original form, can be (and is) used to transfer arbitrarily large amounts of money anywhere in the world, conclusively and…

Ah, what was the last thing you bought with bitcoin?

Or is it a currency you hold, but don't really spend? And if so why do you hold it?

Re: My Opinion on Blockchain

#107

Post by SpicyLemonZest »

pcthrowaway wrote: post #102
SpicyLemonZest wrote: post #77

Earlier quoted context omitted.

I'm skeptical that market cap is a useful metric here. Owning a cryptocurrency doesn't entitle you to a share of the value generated by that currency, so it's not clear why multiplying the price of 1 BTC by 21 million should produce a meaningful estimate of how much Bitcoin as a whole is worth.

Couldn't the same be said for owning a stock? You can only get what you can sell them for. If you own 1 million shares of a company which has issued 10 million shares and is trading at $5/share, you can't dump your million shares for $5 million, because the price would change as you were trying to sell it

It could be, although there are definitely situations where you could sell 10% of a company for close to its market price. But then that just means we have to use other metrics, and Facebook comes out definitively on top in for example number of active users.
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