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The Non-Innovation of Cryptocurrency

stephendiehl.com

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Re: The Non-Innovation of Cryptocurrency

#61

Post by Marazan »

dkshdkjshdk wrote: post #52
skohan wrote: post #14

Earlier quoted context omitted.

Can you name an example of a tangible use-case where a blockchain has been used to create real value, and is competitive against conventional technologies in the same space? There has been a lot of talk about the potential of blockchain, but so far all I have seen it used for is crime and speculation. Would love to be shown I'm wrong on this.

I'll bite the bullet and assume that you're asking a legitimate question in good faith: 1) Imagine I have 100 USD and 100 EUR and I want to provide liquidity to a USD-EUR pair to get a cut of exchange fees. Which automated market maker do I need to contact in the space of "conventional financial technologies" to do so? 2) Imagine I have 1 BTC and I want to lend it (in a secure way) to get some return (in BTC). Who sh…

Two of your 3 problems solved by Bitcoin only exist because you have Bitcoin.

Re: The Non-Innovation of Cryptocurrency

#62

Post by skohan »

dkshdkjshdk wrote: post #52
skohan wrote: post #14

Earlier quoted context omitted.

Can you name an example of a tangible use-case where a blockchain has been used to create real value, and is competitive against conventional technologies in the same space? There has been a lot of talk about the potential of blockchain, but so far all I have seen it used for is crime and speculation. Would love to be shown I'm wrong on this.

I'll bite the bullet and assume that you're asking a legitimate question in good faith: 1) Imagine I have 100 USD and 100 EUR and I want to provide liquidity to a USD-EUR pair to get a cut of exchange fees. Which automated market maker do I need to contact in the space of "conventional financial technologies" to do so? 2) Imagine I have 1 BTC and I want to lend it (in a secure way) to get some return (in BTC). Who sh…

I would agree that case 1 constitutes a potentially interesting use of block-chain. 2 and 3 assume the value of BTC, which I would not take as a given.

Re: The Non-Innovation of Cryptocurrency

#63

Post by redpiller »

RandomLensman wrote: post #40
redpiller wrote: post #29

Earlier quoted context omitted.

Here is an article about our use case: https://jonathangrosdubois.medium.com/how-leasehold-achieves...

Maybe I get this wrong, but doesn't this rely very classically on aligned interests and various parts keeping the other parts in check? No blockchain or tokens required... I did not see anything how profit is verified. Could always use expenses to funnel money out, opex and capex are mixed creatively etc.

It costs real money to buy back tokens from the market and to burn them on the blockchain because they are provably scarce. Because new tokens cannot be created, burning them on the blockchain permanently reduces the remaining circulating supply of tokens so the value of remaining tokens goes up (supply versus demand).

Someone could potentially funnel money out from the stream of profits but anyone could independently check expected earnings (looking at the assets in the portfolio) against the on-chain buyback amount. At least, it significantly limits how much money can be funnelled out.

On the other hand, with a regular company, the directors can make up any numbers on the books and funnel out all of the profits and could keep this going for years undetected. That is far worse.

Altogether, it's not 100% trustless but it's orders of magnitude more transparent than a share-based system. As a small business with directors located in different parts of the world (some of which only met over video chat), this model was essential for us to get over the trust hurdle. Now that we can see tokens being bought and burned, it is building trust within the community. Many community members have already sold some tokens back and seen them burned. Some small investors already made a profit over their initial investment and still have half of their tokens left.

That said, it's not going to be ideal until we we multiple real estate companies (run by different people) hooked into the LSH blockchain. The more companies there are, the less trust there is.

Re: The Non-Innovation of Cryptocurrency

#64

Post by neolog »

skohan wrote: post #31
creshal wrote: post #26

Earlier quoted context omitted.

LASER, back when it was still written in all caps. It was called "the most useless invention of the century" for a while, and it took close to a decade to figure a use for it. But I think the whole discussion is missing the point. Blockchain is mostly not trying to be a solution to engineering problems, but societal, "how do we do X without a trustworthy party involved ". We already know how to do any given X with so…

But this is a totally abstract argument. Can you point to a tangible example of blockchain being used to solve a real societal problem, in a way which is competitive with other, more conventional solutions?

The "Git" application is a blockchain for decentralized management of the Linux kernel source code.

The "Bitcoin" application is a tool useful for buying and selling recreational drugs without exposure to the physical risk posed by cash transactions. Edit: That is, the physical/financial risk posed to you by the other party or third-party robbers. Legal risk is probably also reduced: law-enforcement deanonymization attacks seem much less frequent than busting people with drugs on the street.

Blockchain-based markets in general enable transactions without revealing personally identifying information to the counterparty or platform while circumventing regulatory restrictions on conventional transactions.

Re: The Non-Innovation of Cryptocurrency

#65

Post by skohan »

mattdesl wrote: post #49
skohan wrote: post #14

Earlier quoted context omitted.

Can you name an example of a tangible use-case where a blockchain has been used to create real value, and is competitive against conventional technologies in the same space? There has been a lot of talk about the potential of blockchain, but so far all I have seen it used for is crime and speculation. Would love to be shown I'm wrong on this.

I would point to Hicetnunc as one example[1], which provides real value for many artists on the platform. I’m sure it’s possible to build a similar platform with a central database handling transactions and Stripe payouts, but I’m not sure it would be met with the same enthusiasm (and, despite the possibility of this with past tech, no pre-blockchain digital art marketplace has come close to meeting it in sales). Due…

So I would agree that this marketplace is creating profit for artists. Whether there is real value creation happening I would consider debatable. NFT's themselves are a highly speculative asset, and I would not count on this marketplace continuing to grow and thrive a decade from now.

In other words, a lot of people probably made a very good profit operating tulip markets in Holland in the 1600's, but that doesn't mean they were creating value.

Re: The Non-Innovation of Cryptocurrency

#66

Post by RandomLensman »

dkshdkjshdk wrote: post #52
skohan wrote: post #14

Earlier quoted context omitted.

Can you name an example of a tangible use-case where a blockchain has been used to create real value, and is competitive against conventional technologies in the same space? There has been a lot of talk about the potential of blockchain, but so far all I have seen it used for is crime and speculation. Would love to be shown I'm wrong on this.

I'll bite the bullet and assume that you're asking a legitimate question in good faith: 1) Imagine I have 100 USD and 100 EUR and I want to provide liquidity to a USD-EUR pair to get a cut of exchange fees. Which automated market maker do I need to contact in the space of "conventional financial technologies" to do so? 2) Imagine I have 1 BTC and I want to lend it (in a secure way) to get some return (in BTC). Who sh…

1) Granted, but also EURUSD pricing does not work like any AMM (i.e. not formulaic exchange rates). So right now this does not work from both sides (no place to do and no method to do it). And no, it will not change to formulaic unless you have insane amount so liquidity in (but even then, central banks could just steam roll over you)

2) Lending can be regulated, so might or might not be ok for you to lend - not a lawyer. What about KYC/AML etc.?

3) Aren't there specialized prime brokers that do that? (maybe Genesis?)

Re: The Non-Innovation of Cryptocurrency

#67

Post by [deleted] »

neolog wrote: post #64
skohan wrote: post #31

Earlier quoted context omitted.

But this is a totally abstract argument. Can you point to a tangible example of blockchain being used to solve a real societal problem, in a way which is competitive with other, more conventional solutions?

The "Git" application is a blockchain for decentralized management of the Linux kernel source code. The "Bitcoin" application is a tool useful for buying and selling recreational drugs without exposure to the physical risk posed by cash transactions. Edit: That is, the physical/financial risk posed to you by the other party or third-party robbers. Legal risk is probably also reduced: law-enforcement deanonymization a…

[deleted]

Re: The Non-Innovation of Cryptocurrency

#68

Post by skohan »

neolog wrote: post #64
skohan wrote: post #31

Earlier quoted context omitted.

But this is a totally abstract argument. Can you point to a tangible example of blockchain being used to solve a real societal problem, in a way which is competitive with other, more conventional solutions?

The "Git" application is a blockchain for decentralized management of the Linux kernel source code. The "Bitcoin" application is a tool useful for buying and selling recreational drugs without exposure to the physical risk posed by cash transactions. Edit: That is, the physical/financial risk posed to you by the other party or third-party robbers. Legal risk is probably also reduced: law-enforcement deanonymization a…

Git isn't a blockchain.

Re: The Non-Innovation of Cryptocurrency

#69

Post by neolog »

skohan wrote: post #68
neolog wrote: post #64

Earlier quoted context omitted.

The "Git" application is a blockchain for decentralized management of the Linux kernel source code. The "Bitcoin" application is a tool useful for buying and selling recreational drugs without exposure to the physical risk posed by cash transactions. Edit: That is, the physical/financial risk posed to you by the other party or third-party robbers. Legal risk is probably also reduced: law-enforcement deanonymization a…

Git isn't a blockchain.

Why not? https://en.wikipedia.org/wiki/Blockchain

Re: The Non-Innovation of Cryptocurrency

#70

Post by Canada »

sneak wrote: post #13

> Ending this scourge on civilization is one of most important political problems facing the international community these days, and marks a new era of global cooperation on financial regulation that now necessarily transcends borders and nations. A very neutral, objective viewpoint. > However bitcoin is a technology which did not arise out of an engineering effort directed towards a specific problem or market ineffi…

I agree, it's flame bait that adds nothing new to the discussion and the discussion here will become what can be summed up as "no it doesn't.. oh yes it does.. oh no it doesn't.."
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