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

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

#181

Post by ddeyar » Wed, Apr 21, 2021, 12:09 PM UTC

zertrin wrote: post #136

ddeyar wrote: post #58

A planned upgrade of 6 years? How would that be in the future? How long does it take to fix a minor issue? Tezos for example is able to evolve every 3-4 months without forking and is PoS since 2017. Also they're doing a better job on security. https://tezos.com/

Not doubting any of your statements, but why have I never heard of it before? If it is good why hasn't it displaced ethereum and become more mainstream? Are there any cons that prevent it to become more prominent? (sincere question from me, I am curious to know more)

This is are very good question. I really don't know why the mainstream ignored this project so far. Compared to some other projects, there is no single person in the center of the project, so there is no one to be hyped. This is sad but it seems to be a disadvantage. The loudest are getting attention and with so many projects out there, the tezos community was a long time pretty silent. The smart contract language is completely different from solidity. Its a functional language which allows formal verification. This is one reason which makes it harder for developers to migrate to tezos. It's easeier to migrate to an ethereum clone. Sapling came with the edo upgrade this year, this allows privacy preserving smart contracts. Gas price is extremly low. A part of the nft hype has already migrated to tezos because of PoS and low gas prices. See the stats here https://better-call.dev/stats/mainnet/general The next upgrade is currently in the voting phase. When you're technically interested in it see here http://doc.tzalpha.net/protocols/009_florence.html

Last week a marketing campaign started, maybe you will see an add somewhere in the near future. A lot is going on in adoption atm, here a few recent news:

banking https://xtz.news/adoption/french-banking-giant-societe-gener...

gaming https://xtz.news/adoption/ubisoft-become-a-tezos-corporate-b...

stablecoin https://xtz.news/adoption/groupe-casino-with-11000-stores-to...

digital identity https://xtz.news/adoption/spruce-systems-makes-it-into-y-com...

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

#182

Post by dmihal » Wed, Apr 21, 2021, 12:10 PM UTC

mustafa_pasi wrote: post #173

dmihal wrote: post #149

Earlier quoted context omitted.

The most innovation is happening in financial products. There's no way for a developer or entrepreneur to experiment building in traditional finance without the support from large financial institutions. But in DeFi, there are financial applications built by teams in India, Africa, SE Asia, etc. If you want an example of one innovation, look at flash loans. Flash loans provide the ability to atomicly borrow infinite…

Flash loans are not a real world application. They are just another tool needed within the cryptospace itself. This is the problem currently. There's ten thousand teams building and building, but each one of them is building yet another library or yet another tool. Nobody has any idea how to connect the crypto economy to the real world economy. The only applications possible are ones that you can do within the crypto…

Flash loans themselves are not an application, it's a primitive that other applications can build on top of.

There's many applications like DeFiSaver that use flash loans to allow users to migrate debt between lending protocols without needing additional capital.

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

#183

Post by asenna » Wed, Apr 21, 2021, 12:11 PM UTC

ObserverNeutral wrote: post #172

dmihal wrote: post #151

Earlier quoted context omitted.

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) ha…

No. The greatest motivation for Crypto success are hatred and fear. BTC is succeeding because people hate/fear Central Banks printing money , so people love BTC and hate Central Banks. Ethereum doesn't put itself up against the printing of money but against companies instead. Google, Apple, Spotify etc. People don't hate those companies and to the extent that they do....they manifest their hate by asking Government t…

If you think the point of decentralized systems are to ONLY replicate Google / Apple / Spotify services but in a decentralized manner, then you're mistaken.

When the internet came along, it wasn't to only replicate the Post-office or to just make mails faster. The internet enabled a lot of things you couldn't even predict at that time (or perhaps some could, if they truly understood the tech).

There are lots of things that the blockchain enables that you just cannot do in the traditional world even today. Couple of examples:

- You can use your tokens as collateral, borrow stablecoins and pay off your mortgage while the loan pays itself off from the interest being generated by the collateral - you do not have to pay back the loan => https://alchemix.fi/

- (Borrowed from another user in this thread) Flash loans provide the ability to atomicly borrow infinite money for the duration of a transaction, with no collateral or credit. This money can be used for arbitraging or just to provide working capital for a complex operation. If the loan isn't repaid by the end of the transaction, the whole transaction is cancelled. => https://www.youtube.com/watch?v=mCJUhnXQ76s

There's clearly going to be a lot more use-cases in the future. Finance is only the first field which is getting explored at the moment.

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

#184

Post by delaaxe » Wed, Apr 21, 2021, 12:12 PM UTC

koheripbal wrote: post #132

delaaxe wrote: post #131

Earlier quoted context omitted.

The drawings I made as a kid are very scarce, but completely worthless. Demand is what creates value, not scarcity, although scarcity has an amplifying effect

Scarcity is also not something that you want from a currency, fundamentally. A currency needs to be abundant when needed, and scarce when oversupplied. That's the point of controlling the money supply based on economic growth rates, and the entire reason we have a Fed. I believe strongly that cryptocurrencies have a strong future, but what is really needed is a crypto that automatically manages its money supply. In t…

> multi-year bond instrument that would pay coin dividends well into the future

That's a great idea. I'm not aware of any blockchain that does this, although some projects with seed funding do have long lockup periods

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

#185

Post by delaaxe » Wed, Apr 21, 2021, 12:14 PM UTC

chii wrote: post #134

koheripbal wrote: post #132

Earlier quoted context omitted.

Scarcity is also not something that you want from a currency, fundamentally. A currency needs to be abundant when needed, and scarce when oversupplied. That's the point of controlling the money supply based on economic growth rates, and the entire reason we have a Fed. I believe strongly that cryptocurrencies have a strong future, but what is really needed is a crypto that automatically manages its money supply. In t…

> automatically manages its money supply. that's an interesting question and premis - automatic monetary policy. I wonder if good monetary policy could be encoded as a set of rules that can be followed by a machine.

You could even use an oracle network to feed economic data to the chain

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

#186

Post by Tangokat » Wed, Apr 21, 2021, 12:17 PM UTC

ObserverNeutral wrote: post #159

Tangokat wrote: post #126

Earlier quoted context omitted.

"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…

I disagree. Decentralization makes it possible to cut out the middle man, Sotheby is no longer needed to do art deals, you can buy directly via smart contract. Will some people buy via Sotheby's still because they provide value in curating items? Sure but they will have much more competition than they do now.

It also makes new things possible, for instance the original artist could get a cut of every resale of his art. People can own parts of art, music etc. Artists can go directly to their fans.

Another example is Defi which also cuts out the middleman. I want to send you 100 usd. I have euro, right now I need to go to my bank app and they will convert for a pretty big fee , they will also take 5 days to send it to you if it's international and god help me if there are holidays involved. With defi I send instantly and I will be able to choose what kind of value I send and you will be able to choose what kind of value you want to receive. I don't even need to know. I could send you euros and you receive in usd, it passes through a defi smart contract on the way without any of us knowing. If I'm a farmer and I have corn futures I could probably pay in that and you would still just get usd. Again cuts out the middleman.

Does it help that it's also censorship resistant and trustless? Yes. The ease of use is not on par with legacy for my mum.. yet. But that was also the case in 1995 with the internet.

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

#187

Post by lottin » Wed, Apr 21, 2021, 12:22 PM UTC

ArtTimeInvestor wrote: post #160

lottin wrote: post #156

Earlier quoted context omitted.

> 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.

Sorry, that's not how it works. The governments runs an auction where the bonds are sold to investors. That sets the market rate. The government would not buy its own bonds in the auction (it wouldn't make sense) and cannot force investors to buy the bonds at a particular rate.

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

#188

Post by koheripbal » Wed, Apr 21, 2021, 12:30 PM UTC

delaaxe wrote: post #185

chii wrote: post #134

Earlier quoted context omitted.

> automatically manages its money supply. that's an interesting question and premis - automatic monetary policy. I wonder if good monetary policy could be encoded as a set of rules that can be followed by a machine.

You could even use an oracle network to feed economic data to the chain

I think it's easier than this. The Blockchain should be able to calculate the velocity of money just by the amount of currency flowing in the last x blocks. That alone should do it.

There's also some potential for a bond-market whereby miners BID for bonds, and thus the Blockchain can determine the community expected future inflation rate, and factor that into its calculation of money supply growth.

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

#189

Post by Paradigma11 » Wed, Apr 21, 2021, 12:36 PM UTC

asenna wrote: post #178

Paradigma11 wrote: post #162

Earlier quoted context omitted.

The point is that customers are already paying a lot of fees in Ethereum for financial services on the blockchain. Right now that money goes to run a lot of powerplants and gpu farms but will sometime in the future go to Ethereum staker. PoS coins are a combination of money, store of value and investment in a financial service "cloud".

It will actually not be going to the Ethereum staker, the "base-fee" is going to be burned (removed from supply) and no one gets it, that's what EIP-1559 does (expected to arrive in the July London hard-fork) To add to this, the overall issuance of ETH yearly is going to reduce from about ~ 4+ Million ETH in the PoW model to about ~ 1.x Million ETH in the PoS model, because the PoS security does not require as much i…

You can only burn a little since:

1.)If you burn too much the whole pricing and ordering mechanism for operations does not work any more. Burning is only going to lead to big players in mining/staking and consumers making direct side arrangements.

2.) There is less incentive to stake since burning benefits all regardless if you stake or not. Its essentially a stock buyback. But sure you still have the inflationary block generation as rewards.

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

#190

Post by michaelsbradley » Wed, Apr 21, 2021, 12:57 PM 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.

> running a full node is practically impossible

Can you elaborate?

I found it super easy to setup a full (non-mining) ETH1 node on an Intel NUC running Ubuntu. And on the same NUC I’m running two validator nodes on the ETH2 mainnet, which together have earned about 3 ETH in rewards so far. The NUC is hooked to a cable Internet connection at home, nothing fancy.