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Ethereum Isn't Fun Anymore

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Re: Ethereum Isn't Fun Anymore

#461

Post by rawtxapp »

rank0 wrote: post #412
rawtxapp wrote: post #377

Earlier quoted context omitted.

So yes, you'd pay capital gains tax on the DAI that you've borrowed when you transfer it back to USD, but DAI is a stablecoin that's pegged to 1$ and the volumes are pretty high on many exchanges. Once you include your exchanges fees in your cost basis, you actually lost like 30-40$, so it's a taxable event with capital gains loss .

https://www.forbes.com/sites/shehanchandrasekera/2020/07/21/...

This is more applicable to liquidity providers or things like AAVE and compound where your crypto is actually loaned out. With maker, your crypto doesn't move anywhere and isn't loaned out to anyone.

For what it's worth, if you use AAVE or Compound, you also have to declare interest income on what you've earned.

With maker, you'd be responsible for capital gains if it was liquidated because you fell below the 150% minimum ratio.

Re: Ethereum Isn't Fun Anymore

#462

Post by boh »

touristtam wrote: post #388
boh wrote: post #363

Earlier quoted context omitted.

I mean it "works", but so do steam powered cars. The problem is most people don't actually use it, just trade it. The space used to mostly involve people who actually wanted to decentralize currencies, now it's almost exclusively "hodl $$$$$ to the moon etc". This article is articulating what's been clear to many people who really believed in the promise of decentralized currency: crypto in its current iteration has…

Nevermind article like this one then: https://thenextweb.com/hardfork/2019/05/03/jp-morgan-microso...

Exactly. Nevermind this article because Bitcoin and a blockchain from JP Morgan have nothing in common (also JP's enthusiasm for blockchains have been steadily waning and their earlier attempts are already dead on the vine). People have no interest in the tech, just gainz, bcs blockchain finance, consensus, future, JP Morgan and whatever word cloud pumpers want to use to get you excited don't actually reflect realities. If you have so much faith in the tech, start using it for real-world transactions, which you can do right now. If you're just hodling with some vague assumptions of moon money, you're not supporting the actual purpose of crypto. But let's be honest, most people aren't really supporting it or have any interest in actually using it, that's why crypto has been failing (even though it technically "works").

Re: Ethereum Isn't Fun Anymore

#463

Post by rawtxapp »

skybrian wrote: post #434
rawtxapp wrote: post #410

Earlier quoted context omitted.

It's over-collaterized, so you put more crypto than the loan value. You might say "why the hell would I do that?", in order of importance: 1) you hold on to your asset's appreciation, 2) access the liquidity, 3) avoid capital gains tax.

Okay, but that seems like a pretty small niche? Most people don’t borrow just to save money on taxes on their cryptocurrency gains.

They might borrow to hold on to their asset's appreciation.

Re: Ethereum Isn't Fun Anymore

#464

Post by DennisP »

rank0 wrote: post #397
rawtxapp wrote: post #383

Earlier quoted context omitted.

So the stability fee you pay is 4.50%. You're still holding on to your assets appreciation, so if Bitcoin continues to appreciate at 300% per year, the 4.50% is a drop in the bucket and you didn't have to pay a capital gains tax. Eventually, some companies are working on tokenizing homes, so once that happens, you could potentially deposit that as collateral just as easily, but that's still far out.

> So the stability fee you pay is 4.50%. The fees I am seeing on Uniswap/Aave are much much higher than 4.5%. Even at 4.5% that equates to six figures of additional interest payments over my 30 year mortgage. > and you didn't have to pay a capital gains tax. This isn't true. Any conversion between crypto assets is technically a taxable event...even if we both can agree that the rules are silly. > Eventually, some com…

The idea is that it's not a conversion, it's a loan. The collateral is held in a smart contract and when you pay off the loan you get it back. In much the same way, people take out loans on their stock portfolios, and they don't pay capital gains either.

Re: Ethereum Isn't Fun Anymore

#465

Post by boh »

ertian wrote: post #390
boh wrote: post #331

Earlier quoted context omitted.

Just because something works doesn't make it a success (see Betamax, laser disc, steam powered cars etc.).

Just because something doesn't work in the first attempt doesn't mean it never will (see various attempts at ecommerce, online news, streaming video, or just general computer-network-for-the-masses attempts from the 80s and early 90s).

It does work, that's the problem. Because even though it's working, few people are actually using it for anything other than speculative trades (and its been working for ~11 years).

Re: Ethereum Isn't Fun Anymore

#466

Post by shuckles »

keithtom wrote: post #407
Retric wrote: post #384

Earlier quoted context omitted.

HN seems wildly pro crypto compared to most places. It’s like Tesla which isn’t universally supported, but still gets a lot more coverage than Ford. People do bring up quite reasonable objections like environmental costs, but it stories get a lot of upvotes and suggesting many people are strong supporters.

Re environmental costs, I have yet to hear anyone make an analysis of the environmental cost of the banking system or an equivalent; that is, how much to warm all the offices, the computers and servers, the transportation costs of cars & planes for all the employees. Also, proof of stake will reduce 99% of the environmental cost.

This whataboutism ignores the logic of the question: the banking system is not incentivized to burn power. You would expect each node to try to minimize their input costs to maximize returns. For a given unit of compute, putting in more energy does not increase profits for any participant in the traditional banking system. This isn’t the case for cryptocurrencies, so they are asked a fair question.

Re: Ethereum Isn't Fun Anymore

#467

Post by langitbiru »

rawtxapp wrote: post #410
skybrian wrote: post #405

Earlier quoted context omitted.

How does borrowing work in an automated, trustless environment? Doesn’t someone have to decide whether you’re likely to pay back the loan with money you haven’t earned yet?

It's over-collaterized, so you put more crypto than the loan value. You might say "why the hell would I do that?", in order of importance: 1) you hold on to your asset's appreciation, 2) access the liquidity, 3) avoid capital gains tax.

I think in the past someone mentioned about under-collaterized loan. It's based on your reputation. The idea is you use your Ethereum account to do activities. Based on these activities, people could give you a loan. Such activities can be something like answering questions (imagine Stackoverflow but the authentication runs on Ethereum).

Re: Ethereum Isn't Fun Anymore

#468

Post by duckfang »

lotsofpulp wrote: post #449
iso8859-1 wrote: post #353

Earlier quoted context omitted.

Technology doesn't imply a good civil society (where you can, on average, trust people. Aka "social capital"). But does technology imply social capital? I don't think so. So if you set up the dichotomy, and had to choose, I'd choose "social capital" every time. I know, you didn't use this phrasing. But when I read "allegiance to your tribe", what does that even mean? If you're American and you support your troops, is…

Technology removes the need for middlemen, and hence any trust needed for the middlemen. Allegiance to the tribe means following the customs/social ordering/rules of the tribe. For example, how well would a gay/non religious/etc person fare in tribes that don't believe in civil liberties?

> Technology removes the need for middlemen, and hence any trust needed for the middlemen.

Unfortunately, I see what happens when 'We' use technology to remove middlemen...

Apple: https://www.macrumors.com/2021/01/02/amphetamine-app-store-r...

Google: https://news.ycombinator.com/item?id=22348568

(person 17h ago on HN talking about google acct ban remediation https://news.ycombinator.com/item?id=26218795 )

https://www.businessinsider.com/google-users-locked-out-afte...

That's what technology has gotten us. Accounts get closed down due to automated systems. Something gets flagged as "fraud" and you lose access/money. Your previous business selling apps gets cancelled when your app is deregistered and removed.

At least, the recourse is "Complain on HN or Twitter". Worst case is you file a lawsuit against a multi-billion dollar company (hah!).

Now, what do you do to file a dispute against Ethereum or Bitcoin? Well, nobody. There is no clearinghouse and no masters - that's the selling point! But what about fraud or likewise? Too bad, so sad.

With the hawaladars, their word, ethics, and livelihood is on the line. You have a real human who can handle the squishy and nigh-unautmatable parts. And they can talk with the person trying to transfer money in case there is problems unforseen.

> Allegiance to the tribe means following the customs/social ordering/rules of the tribe.

Well, yes.

> For example, how well would a gay/non religious/etc person fare in tribes that don't believe in civil liberties?

But this seems like a veiled way to attack a way of moving money around solely because the name is Islamic. And hate crimes happen nearly everywhere. And there was the Kentucky county clerk who refused to sign marriage certificates because a couple was gay.... And unlike the hawaladars whom you can go to a different one, these people in the county had no such choice.

It's easy to set up a strawman that someone may not support your beliefs, but it's a false narrative to think that only those people do it.

Re: Ethereum Isn't Fun Anymore

#469

Post by monkeydust »

microtherion wrote: post #256
charcircuit wrote: post #244

Earlier quoted context omitted.

Tether bubble? As in crashing from $1.002 to $1? USDT can always just be cashed out for regular money.

For values of "always" that depend on whether Tether actually has $34B in reserves to back the 34B USDT currently in circulation. Call me crazy, but I'd bet on the "under" here.

Doesn't Tether have to provide 3rd party audited accounts as to what they actually hold in reserve?

Re: Ethereum Isn't Fun Anymore

#470

Post by bordercases »

PretzelPirate wrote: post #441
lazzlazzlazz wrote: post #375

The Hacker News community has long been anti-crypto, and as someone deeply involved in the space, these long threads of complaints and diatribes are difficult to handle. Everyone is missing so much context. Ethereum gas prices are astronomical because there's unprecedented demand to use the network: NFT art and collectibles are exploding (NBA TopShot, Foundation, SuperRare, Rarible, OpenSea, etc.) at the same time De…

I kind of agree with what I interpret the article as saying - It was fun to work in the Ethereum space when people where there to have fun and there wasn’t so much money involved. It’s certainly not fun to contribute to Geth nowadays when every bug can have huge consequences, and the community constantly demands more performance so they can have lower costs. Peter was very clear about the burnout this causes. You can…

Not really something to be disappointed by, considering that money would eventually have to be involved in fintech?
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