Ethereum: A Store of Value with Cash Flow [pdf] • Hacker News Board

Re: Ethereum: A Store of Value with Cash Flow [pdf]

#41

Post by lottin » Wed, Apr 21, 2021, 8:03 AM UTC

ArtTimeInvestor wrote: post #9

It will be interesting to see if interest rates in government controlled currencies and crypto currencies will stay diverged in the long run. Without the distorting action of governments printing money, interest rates might be set by market forces in "crypto land". This might lead to a long term situation where artificially low interest rates are paid in government controlled currencies, but market prices are paid in…

You're comparing a risk-free rate (government bonds) with a rate on risky investments. Not really comparable at all. You can also find high-yield bonds (aka junk bonds) denominated in USD.

Also real interest rates are set by the market not governments. Monetary policy has, at best, only small effects on real rates (in theory it should have none).

Re: Ethereum: A Store of Value with Cash Flow [pdf]

#42

Post by meowkit » Wed, Apr 21, 2021, 8:08 AM UTC

ObserverNeutral wrote: post #29

sherlock_h wrote: post #7

What mostly excites me about Ethereum ist the very vibrant ecosystem of developers and builders around it. You can think of NFTs and DeFi whatever you want, the sheer amount of new applications and innovative ideas on the ethereum blockchain has been mind-boggling. My personal favorite is Sorare, which combines NFT collectibles with fantasy soccer. And sure, right now everything suffers from high gas prices but it lo…

All those things will never break among the common folk. The common folk wants ease of use above anything else. It has to be as easy as sending money via paypal. No doubt ETH can be the base of that technically, but the model which has ETH holders make money off the appreciation of the ETH token in the process is flawed. Fortune500 and even startups who'd use the open source ETH blockchain technology to bring many se…

A regular centralized company wouldn't want to necessarily use the ETH blockchain. They would use a private blockchain for internal auditing or supply chain partnerships, and would probably build it on something like HyperLedger https://www.hyperledger.org/use/fabric (What?! The Linux Foundation??).

Binance did fork ETH and has built out the Binance Smart Chain. Problem is that is still centralized. The unresolved debate is whether its the code or the network effects that matter.

Oh by the way: Bitcoin is open sourced too. Here's the link! https://github.com/bitcoin

Re: Ethereum: A Store of Value with Cash Flow [pdf]

#43

Post by runeks » Wed, Apr 21, 2021, 8:11 AM UTC

fumblebee wrote: post #24

needle0 wrote: post #21

A domain where its default home page is a PDF? That's a new one... ps. And I'm not buying the "environmentally friendly" argument until proof-of-stake is actually live and completely displaces PoW in mainline production.

If the issue is whether PoS will work is troubling you: other PoS chains like Algorand have been successfully running for well over a year. Seems in no doubt.

The potential issue isn't spontaneous breakage, but rather a determined attacker exploiting the incentive structure in an unexpected manner.

And the financial motivation to do this is much greater for ETH since it's around 100 times more liquid than ALGO.

Re: Ethereum: A Store of Value with Cash Flow [pdf]

#44

Post by inter_netuser » Wed, Apr 21, 2021, 8:11 AM UTC

casi wrote: post #19

qertoip wrote: post #13

Ethereum is easy to change (hard forks often) and so cannot be expected to preserve any key characteristics like emission curve or even the permissionless nature. In fact, Ethereum's monetary policy did change in the past.

The policy has always been “minimal viable issuance”

what does that mean in practice?

who determines what's minimum and what's viable?

Re: Ethereum: A Store of Value with Cash Flow [pdf]

#45

Post by inter_netuser » Wed, Apr 21, 2021, 8:12 AM UTC

manfredz wrote: post #18

If there is a promise of future cash flows from transaction fees that is dependent on new holders, doesn’t that make it a pyramid, ponzi or MLM scheme?

It is just inflation of money supply, same as with fiat currencies.

Re: Ethereum: A Store of Value with Cash Flow [pdf]

#46

Post by crispyporkbites » Wed, Apr 21, 2021, 8:14 AM UTC

Personally, I've moved all of my funds from other currencies into Ethereum. Not that I think it will make lots of money, but because Ethereum actually could have utility, and has a solution to the climate change impacts of Bitcoin.

So really, if I'm going to hold any cryptocurrencies, that's where I want them

Re: Ethereum: A Store of Value with Cash Flow [pdf]

#47

Post by fauigerzigerk » Wed, Apr 21, 2021, 8:17 AM UTC

gillesjacobs wrote: post #12

liquidify wrote: post #8

Earlier quoted context omitted.

To be fair, I don't think you can really compare many others to Monero, which is the only major cryto with the property of fungibility. Personally I consider that property so important that if a crypto doesn't consider it a first class citizen, I don't buy much or any of the crypto.

I agree (an unknown amount of Monero is also a fair bit of my portfolio) but more for ideological reasons: privacy is a requirement for individual financial sovereignty. Fungibility follows privacy of course. I also think it's interesting to wait and see how the fixed tail emission supply works out.

>privacy is a requirement for individual financial sovereignty

What does "individual financial sovereignty" mean though? Money is only useful as part of a social system and therefore requires some sort of social contract.

I'm all for privacy when it comes to storing and transferring amounts that are consistent with personal consumption. I'm not in favour of letting people move millions or billions anonymously unless they are willing to renounce all protections they enjoy under the law.

Re: Ethereum: A Store of Value with Cash Flow [pdf]

#48

Post by runeks » Wed, Apr 21, 2021, 8:17 AM UTC

ArtTimeInvestor wrote: post #30

dharma1 wrote: post #22

Earlier quoted context omitted.

I think the primary reason interest rates are high in crypto lending right now (also on USD stablecoins) is leveraged speculation - people using crypto as collateral to leverage their crypto positions higher (and/or yield farm) and are prepared to pay a relatively high interest rate for it (~10% on stablecoins) because the expected gains are a fair bit higher. I don’t expect this will last forever

You say that one can create leverage by borrowing? How does that work? Is it a contract like "You borrow me 1 ETH and I will pay back 1.1 ETH in a year. Except when X happens, then I will pay back 2 ETH"? If so, what is X?

The leverage is speculation using borrowed money. See: https://www.blueleaf.com/articles/how-leverage-works-in-inve....

Re: Ethereum: A Store of Value with Cash Flow [pdf]

#49

Post by whitepaint » Wed, Apr 21, 2021, 8:18 AM UTC

ObserverNeutral wrote: post #40

whitepaint wrote: post #31

Earlier quoted context omitted.

> All those things will never break among the common folk. You should google "NFT".

What stops Spotify or Sotheby or any other proper company from forking off the ETH blockchain and sell NFT as a service? Nothing..they won't even have to pay because the project is opensource. They can solely focus on ease of use and marketing which is what proper companies do best and just take the technical part without any compensation. This is also the reason why Larry Page is among the richest men in the world a…

> What stops Spotify or Sotheby or any other proper company from forking off the ETH blockchain and sell NFT as a service?

It's as saying if Facebook released all of its code then suddenly it would get competition. It wouldn't.

There's the whole infrastructure behind it: thousands of nodes running the blockchain, thousands of applications running on it, developers in this sphere are very scarce because it's so complicated. If you wanted to try to create yet another "Ethereum killer", you would also need to convince developers to write apps on your chain, and people to run the nodes.

By the way, to say that Linus Torvalds is a nobody is a ridiculous thing. His net worth is humongous to begin with.

Re: Ethereum: A Store of Value with Cash Flow [pdf]

#50

Post by tim333 » Wed, Apr 21, 2021, 8:19 AM UTC

The start of the document:

>The purpose of this memo is not to denounce Bitcoin. Bitcoin enjoys a growing institutional spotlight, a compelling narrative as digital gold, and a portfolio allocation as an inflation hedge. However, institutional allocation into the Ethereum ecosystem is currently low...

You can denounce bitcoin for the CO2 emissions though.

At least etherium is trying to go proof of stake. If institutions pile into bitcoin the price and emissions will 10x which I'm not sure is on. Governments can't control bitcoin but they can control institutions.