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

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

#61

Post by asjdflakjsdf » Wed, Apr 21, 2021, 8:30 AM UTC

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…

Ethereum is quite exciting in that regard, but my feeling is that most eth enthusiasts don't actually care about that. They only care about the value and thus it has become another crypto pyramid scheme for now.

The only crypto community who has shown any genuine effort in creating a "currency" is Dogecoin. And that is mainly because they are more aware that their coin has no value without real adoption. But sadly, even that has been infested with the pyramid scheme HODLers after the recent surge in value.

Another problem with Eth is that regular folk are thrown off when they hear things like "smart contracts", "NFT" etc.. So, in terms of a realistic crypto "currency" having widespread adoption, it seems hard to justify any of them at the moment.

I love using crypto for payments as it can be incredibly simple when done right. I really hope to see a crypto that works toward distributing wealth and opportunity though rather than the toxic crypto culture of HODlers we see today!

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

#62

Post by inter_netuser » Wed, Apr 21, 2021, 8:30 AM UTC

ur-whale wrote: post #2

The digital scarcity argument made in the paper is weak. And that's assuming the ETH crowd doesn't change the supply formula (which no one currently understands) on a whim.

It is guaranteed to change, as the stated policy is "minimal viable issuance", which sounds rather subjective.

How is "minimal" and "viable" determined?

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

#63

Post by ObserverNeutral » Wed, Apr 21, 2021, 8:31 AM UTC

meowkit wrote: post #42

ObserverNeutral wrote: post #29

Earlier quoted context omitted.

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 de…

> Bitcoin is open source

Bitcoin is open source, all right. But the first mover advantage and marketing campaign that it has...well it's insurmountable at this point.

> Problem is that is still centralized

The world doesn't give a damn about that. The only killer app of decentralization as of today is the ability to give people peace of mind that the unit of account they use to store their wealth cannot be tempered with by anybody.

Literally the only application of decentralization was the ability to avoid the ever present threat of money printing because people are scared of inflation and rightfully so. Ever since the stone age people have been diluted by the the central currency authority, it's a fear that is deeply rooted in our brains.

People aren't similarly scared about Paypal or Visa processing their transactions.

Fear is the greatest motivation and fear of inflation is the only thing giving the decentralization thing any market. Everybody , ranging from the supermarket employee to Stanley Druckenmiller...they are all scared as hell about inflation.

And it shows in the marketcap and price of king BTC

BTC gives those 7 billions people a way to express such fears in the market whereas they could only buy Gold, Silver, and Inflation indexed bonds before BTC came about.

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

#64

Post by mettamage » Wed, Apr 21, 2021, 8:33 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…

> All those things will never break among the common folk.

To be fair, when I was a 10 year old kid in the nineties, I'd never ever suspect that everyone and their grandma* would be so internet savvy as they are.

* Obviously not all grandparents ;-) But I've seen quite a few grandparents of whom I'd never suspect to use internet services like WhatsApp.

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

#65

Post by dash2 » Wed, Apr 21, 2021, 8:33 AM UTC

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…

A question I've asked before: are there any applications which don't involve speculation?

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

#66

Post by ArtTimeInvestor » Wed, Apr 21, 2021, 8:36 AM UTC

lottin wrote: post #41

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).

> You're comparing a risk-free rate (government bonds) > with a rate on risky investments.

I don't think so. What is the "risky investment" here?

I compared lending of different currencies. In the case of Euros or Dollars, the lender is a government. In the case of crypto, the lender is a smart contract. Both are assumed to be reliable.

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

#67

Post by ArtTimeInvestor » Wed, Apr 21, 2021, 8:38 AM UTC

runeks wrote: post #48

ArtTimeInvestor wrote: post #30

Earlier quoted context omitted.

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... .

That does not answer my question: How a smart contract can implement lending in a way that both parties are satisfied:

- The lender gets their money back plus interest.

- The borrower makes a profit if the price of the borrowed currency goes up.

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

#68

Post by ObserverNeutral » Wed, Apr 21, 2021, 8:38 AM UTC

whitepaint wrote: post #49

ObserverNeutral wrote: post #40

Earlier quoted context omitted.

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 compli…

> 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.

Are those things really needed to ...you know commercially sell the product to the public, give them ease of use and make money in the process?

Because if we must ride the blockchain thing for Venture Capital funding or to look hip among the public on twitter...well we can stick an ethereum logo on it and invite Vitalik to the company podcast.

It's much easier and accomplishes the goal in much more straightforward manner.

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

#69

Post by inter_netuser » Wed, Apr 21, 2021, 8:41 AM UTC

runeks wrote: post #43

fumblebee wrote: post #24

Earlier quoted context omitted.

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.

It will likely not fail due to a direct attack on PoS. Ethereum has shown they are willing to rollback the chain in case of attacks.

What's more concerning is that Proof of Wealth (which is what Stake really is), is just going to lead to those with biggest balances dictating rules to everyone else. Exactly what happened in EOS, Steem, etc...

It will become a plutocracy with cute emojis.

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

#70

Post by kortilla » Wed, Apr 21, 2021, 8:42 AM UTC

ur-whale wrote: post #14

lottin wrote: post #10

The fact that something is scarce doesn't make it a store of value. Scarce simply means is in short supply, but prices aren't determined by supply alone, they are determined by supply and demand. Moreover, if an asset is in fixed supply, then its price is determined entirely by the demand. This means such an asset will only be a store of value if the demand for the asset remains strong over a long period of time, whi…

>they are determined by supply and demand You are correct, but only in theory: this requires the precondition that people are rational economic actors. In practice, people are weird, and the scarcity of supply creates a demand. There is therefore a weird feedback loop between the supply and the demand, and scarcity alone is enough to create "value". Examples: - Beanie babies - Magic the gathering cards - Pokemon card…

No, the scarcity alone isn’t enough. There has to be some existing interest to make the “exclusivity” something people actually care about.

Each one of my paintings is completely unique and there are very few. Nobody cares and wouldn’t pay any premium for them.