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

ethereumcashflow.com

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

#151

Post by dmihal »

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…

Exactly, Ethereum is a better Store of Value than Bitcoin, not only because it is scarce, but because it provides utility, which creates demand.

People need ETH for:

* Paying transaction fees to use the network. For example, Visa is now settling payments with card issuers using USDC on Ethereum, so Visa needs to pay these fees with ETH.

* Collateral in financial applications: Over 11 million ETH (over $24 billion) have been locked as collateral in various financial protocols

* Staking & validating: In the same way that Bitcoin miners must purchase mining hardware to earn money, Eth2 validators must purchase ETH to earn staking rewards

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

#152

Post by astoor »

I know most of us technical people here dismiss Ethereum as being just another new fangled pyramid scheme like Bitcoin and the others, but you've got to hand it to them, it is very well-disguised with plausible deniability (DApps, DeFi, etc.), and they keep on coming up with new ways to make it self-sustaining (ICOs, NFTs, etc.).

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

#153

Post by jdmoreira »

jdmoreira wrote: post #150
tim333 wrote: post #123

Earlier quoted context omitted.

Well - money laundering, drug dealing, ICO scams... On the positive side I think there's something like creating wealth through the power of imagination. I mean 20 years ago there were no crypto currencies. Now on paper they are worth $2trn ($260 a head for the world's population). And lots of people can feel wealthy because they have $100k in bitcoin of whatever. And it can retain actual value in the sense that you…

> Where does the value of fiat currency come from From the taxman knocking at your door. They have prisons you know and some really well armed goons. They also control the education system and pretty much everything else and are capable of stealing your children from you and send them to die in some far away shore. They create all kinds of myths and bullshit and we take them for granted... like national identities an…

I would even argue the only reason crypto has any value is because people think they are sticking it to the man or hiding away from them. But that’s just a fantasy of course.

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

#154

Post by astoor »

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…

> "prices aren't determined by supply alone, they are determined by supply and demand"

What we saw with the ICOs in 2017 and early 2018 is that there was a surge in demand for Ethereum to participate in the ICOs, which in turn sent the price shooting up. However, when new ICOs started to dry up in mid-2018 the demand also dried up, and when the companies that received all the Ethereum started to cash out the supply shot up, sending the prices right down. We could see something similar with NFTs.

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

#155

Post by mariosmuzik »

tim333 wrote: post #104
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.

I'm not sure it's replacing anything. It's more a new addition to the planet.

Will change everything .

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

#156

Post by lottin »

ArtTimeInvestor wrote: post #145
lottin wrote: post #139

Earlier quoted context omitted.

The risk premium is the interest rate spread that investors demand. Not clear how the government can "dictate it" by printing money.

The government prints money and buys government bonds with it. And other assets. When you have infinite amounts of money, you can dictate the risk premium.

> When you have infinite amounts of money, you can dictate the risk premium.

But how? If you're an investor who is considering buying government bonds, how can the government dictate the interest rate that you are willing to accept in return for buying the bonds?

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

#158

Post by Kbelicius »

inter_netuser wrote: post #69
runeks wrote: post #43

Earlier quoted context omitted.

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.

> 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.

So if PoW and PoS both suffer the same problem of minority dictating rules to everyone else do you know of any consensus algorithm used in crypto that avoids that problem?

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

#159

Post by ObserverNeutral »

Tangokat wrote: post #126
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…

"All those things will never break among the common folk." Just like normal folk will never use TCP/IP, know HTML etc? Nobody needs to know that something runs on a blockchain or how NFTs work. Yes you need to know now but in 10 years my mum will use these things without having any idea what they are. Same as she's using an ipad now without knowing objective C or any underlying protocols and tech.

> Yes you need to know now but in 10 years my mum will use these things without having any idea what they are

Sure but she will use the Spotify app or the Sotheby app to buy NFTs

Spotify and Sotheby on the other hand they will not even use a blockchain. Just like Coinbase doesn't use a blockchain

This whole decentralization mania solely work when people are are terribly scared of something: Government diluting their purchasing power via printing money and inflation.

That's a really deeply rooted thing in our brain as governments did that since the stone age. That's the only killer app of decentralization. As shown by the marketcap of king BTC and the success of exchanges like Coinbase and Binance.

NFTs, DeFi...all the other stuff...the user doesn't hate Spotify or Sotheby or the Google Store , but let's say for a moment that it does..well even if the ease of use and fees of DeFi were on par with legacy companies (they are not)...the consumer will always keep using the legacy company product and ask the government to tax them more. So they'd have the best of both worlds: a functioning product and a way to express their hatred

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

#160

Post by ArtTimeInvestor »

lottin wrote: post #156
ArtTimeInvestor wrote: post #145

Earlier quoted context omitted.

The government prints money and buys government bonds with it. And other assets. When you have infinite amounts of money, you can dictate the risk premium.

> When you have infinite amounts of money, you can dictate the risk premium. But how? If you're an investor who is considering buying government bonds, how can the government dictate the interest rate that you are willing to accept in return for buying the bonds?

The government is an investor. If the government buys enough bonds at X% interest rate, that is the market rate.
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