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

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

#71

Post by whitepaint » Wed, Apr 21, 2021, 8:43 AM UTC

ObserverNeutral wrote: post #68

whitepaint wrote: post #49

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? 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 commercial…

Of course you can do the Binance thingy (copy of Ethereum and have complete centralization). I don't believe that will prevail in the long term. Decentralization is a must.

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

#72

Post by fumblebee » Wed, Apr 21, 2021, 8:43 AM UTC

xvector wrote: post #52

throwastrike wrote: post #23

What is crypto replacing really? I’ve yet to read even a fair explanation without mental gymnastics. And I’ve been waiting to the last ten years.

Banks and physical currency alike. You can now transfer value simply by having a public/private key pair. No need for banks and their multi-day wire transfers. No need for KYC. You can borrow and lend on a decentralized network within minutes. Invest in markets, make purchases. All without relying on a centralized entity, and without being bound by your government. Crypto really is something beautiful to the cypherpu…

You still need KYC at entry and exit points into the crypto market (e.g. Coinbase), you still need to transfer fiat money onto exchanges via traditional payments infrastructure.

The decentralised, utopian vision only works if the entire game is played there.

Also, a side note, KYC is a good thing for things like AML. The ability to dispute with centralised orgs like banks is a good thing; the major issue with decentralised solutions is that there's no accountability for issues like fraud.

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

#73

Post by ArtTimeInvestor » Wed, Apr 21, 2021, 8:43 AM UTC

orky56 wrote: post #35

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

Anecdotally many crypto holders prefer to not liquidate their crypto positions but instead take out loans via BlockFi to purchase hard assets like real estate. With cash in hand and now a property, they can get a cash out refi and the crypto loan is not a taxable event since the crypto was just collateral.

Like this?

0: Holder has ETH

1: Holder borrows Tether, provieds ETH as collateral

2: Holder uses Tether to buy a house

3: Holder borrows Dollar, provides house as collateral

4: Holder buys Tether with Dollar

5: Holder pays back Tether, gets back ETH.

6: Holder now has ETH + House + Dollar Dept

If so, why couldn't they lend the dollars to buy the house in the first place? The bank which lends the dollars certainly could make a contract that the dollars only can be used to buy the house?

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

#74

Post by nathias » Wed, Apr 21, 2021, 8:45 AM UTC

asjdflakjsdf wrote: post #61

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, e…

How do you define a pyramid scheme? Thing go up in value?

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

#75

Post by inter_netuser » Wed, Apr 21, 2021, 8:46 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).

the risk-free bonds have failed numerous times. Often they wiped out investors entirely.

Full list: https://en.wikipedia.org/wiki/List_of_sovereign_debt_crises

They cannot print value, only paper.

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

#76

Post by meowkit » Wed, Apr 21, 2021, 8:47 AM UTC

XorNot wrote: post #54

meowkit wrote: post #42

Earlier quoted context omitted.

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…

Why would any company build a private blockchain? Private companies have top to bottom control of their systems, which means they don't need proof of work or proof of stake or any other system to establish trust: they can just issue PKI keys to employees from a database. Private blockchain has never made any sense: you just give all your employees private keys and move on with your life. EDIT: Which is to say, I'm su…

Clearly we have different interpretations of the case studies. Walmart seems interested.

But I guess its all just buzzwords and speculation! All these people wasting their time on something so obviously useless. You should let them know!!

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

#77

Post by bidirectional » Wed, Apr 21, 2021, 8:49 AM UTC

ArtTimeInvestor wrote: post #66

lottin wrote: post #41

Earlier quoted context omitted.

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.

The last resort of the US, UK, etc. governments is to print money if they really want to avoid defaulting on their debt. Can smart contracts print money? Surely there must be some way for the counterparty in the contract to default.

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

#78

Post by [deleted] » Wed, Apr 21, 2021, 8:51 AM UTC

zoshi wrote: post #60

Cash flow is for businesses. Ethereum doesn’t know what it is. The rules are always changing, running a full node is practically impossible, and issuance is always changing. It’s not even clear that the features claimed in this paper will be true one year from now. Multiple consensus failures (most recently this last month) and constant design changes do not provide a secure foundation for sound money.

[deleted]

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

#79

Post by asjdflakjsdf » Wed, Apr 21, 2021, 8:51 AM UTC

nathias wrote: post #74

asjdflakjsdf wrote: post #61

Earlier quoted context omitted.

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, e…

How do you define a pyramid scheme? Thing go up in value?

I'd basically see it as an investment opportunity that greatly favours early adopters.

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

#80

Post by cryptica » Wed, Apr 21, 2021, 8:52 AM UTC

It's disturbing how tribalism is allowing people to completely ignore reality.

Ethereum's blockchain uses up over 1 terrabyte of space. Because Ethereum nodes do not provide any search feature natively, most third-party software integrations end up being implemented via the use of centralized services (which defeats the whole purpose of Ethereum).

As for Bitcoin using the same amount of electricity as an entire country to perform 2 transactions per second, that is also shocking.

But modern fiat money-printing allows all pyramid schemes to thrive. I'm convinced that if Bernie Madoff had managed to keep his ponzi scheme going just one more decade, he would never have been caught.