The Non-Innovation of Cryptocurrency • Hacker News Board

Re: The Non-Innovation of Cryptocurrency

#71

Post by dkshdkjshdk » Thu, Jul 08, 2021, 9:28 AM UTC

skohan wrote: post #62

dkshdkjshdk wrote: post #52

Earlier quoted context omitted.

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.

Regarding point 2, what's wrong with assuming that 1 BTC is worth 1 BTC now and forever? If I'm not trading asset A for asset B, then it's hardly "speculation".

If it makes it any better, I can lend BTC and ask to get returns in USDC (which should be worth as much as 1 USD, if you trust Coinbase). Am I still speculating?

Regarding point 3, where is the speculation, exactly? If, at any point, the BTC I left as collateral goes below a certain level of collateralization (let's say 200% of the value of the borrowed asset), I'll just get liquidated: whoever lent me the USD will get their USD back, and I will lose my collateral (or a part of it, at least), if I fail to keep the value of my collateral over the threshold.

I think perhaps we have a very different idea of what "speculation" is supposed to be...

Either way, I guess you accept that there are use-cases that are otherwise not being provided by more traditional tech/institutions. Good.

Re: The Non-Innovation of Cryptocurrency

#72

Post by keymone » Thu, Jul 08, 2021, 9:30 AM UTC

skohan wrote: post #60

keymone wrote: post #55

Earlier quoted context omitted.

It’s ok, people like you wondered why would anybody need to speak into a tube with a wire instead of meeting in person, why would anybody send a radio broadcast to nobody in particular, why would anybody send email when post and fax are ubiquitous. Some just need time to process the upside of new tech. But please, write down your thoughts and re-read them every couple years.

All of the technologies you mentioned gained wide adoption much faster than blockchain has. > why would anybody need to speak into a tube with a wire instead of meeting in person I am fairly sure the value proposition of instantaneous vocal communication at a distance was extremely obvious even before the telephone existed.

> technologies you mentioned gained wide adoption much faster than blockchain has

They really didn’t, do some research.

> value proposition of instantaneous vocal communication at a distance was extremely obvious even before the telephone existed

And value proposition of being in full control of your financial assets and ability to transfer them anywhere around the world without intermediaries is not extremely obvious?

Give it time, you’ll get it.

Re: The Non-Innovation of Cryptocurrency

#73

Post by skohan » Thu, Jul 08, 2021, 9:31 AM UTC

neolog wrote: post #69

skohan wrote: post #68

Earlier quoted context omitted.

Git isn't a blockchain.

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

> The blockchain was invented by a person (or group of people) using the name Satoshi Nakamoto in 2008

> Git was created by Linus Torvalds in 2005 for development of the Linux kernel

They use similar data structures, but blockchain is more than a Merkel tree, it also includes a consensus algorithm.

Re: The Non-Innovation of Cryptocurrency

#74

Post by keymone » Thu, Jul 08, 2021, 9:32 AM UTC

lordnacho wrote: post #56

keymone wrote: post #7

> However bitcoin is a technology which did not arise out of an engineering effort directed towards a specific problem or market inefficiency, but instead out of a anarchist political narrative that views democratic control of the money supply and law enforcement as the problem. omg this is painful. democratic control of money supply? no market inefficiencies? does author live in a separate reality? bitcoin is the bi…

> bitcoin is the biggest invention in financial world since sliced bread Puzzling. Is sliced bread a financial invention? The sliced bread thing has always puzzled me every time I've come across it. Is it saying that there's no real added value, or that the added value in convenience is really big?

https://www.google.com/search?q=best+thing+since+sliced+brea...

Re: The Non-Innovation of Cryptocurrency

#75

Post by dkshdkjshdk » Thu, Jul 08, 2021, 9:32 AM UTC

Marazan wrote: post #61

dkshdkjshdk wrote: post #52

Earlier quoted context omitted.

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.

Yes... and?

Are people that have Bitcoin not allowed to do useful things with what they have? Does it bother you that there are actual legitimate use-cases for these things (as you seemingly admit, by not including my first example in your comment)?

Someone asked for an example, and I provided a few... perhaps you don't see value in the examples I gave, but there are people out there who do.

Re: The Non-Innovation of Cryptocurrency

#76

Post by mattdesl » Thu, Jul 08, 2021, 9:33 AM UTC

lmm wrote: post #46

mattdesl wrote: post #9

Blockchains and crypto tech does seem to provide solutions to many challenging problems: distributed ledgers, immutable and decentralized data, ownerless contracts and program execution, secure and decentralized ownership of a digital asset (eg: owning a domain name), programmable free markets, preventing the double spend problem, etc. These may not be problems the author is interested in, but it does not mean the te…

Append-only, log-structured datastores are useful; Merkle trees are useful; bitcoin did not invent these things though it has helped popularise them. PoW is the one unique innovation that makes bitcoin bitcoin, and I think the last 12 years have shown that its legitimate use cases are niche at best.

I would largely agree that the use cases are niche at the moment. For example, enabling ownership of a domain name without requiring the trust of a central party.

It may be worth noting, Ethereum has only been around for 6 years, and prior to it there was not a lot of focus in the blockchain space on ownerless program execution and immutable state (smart contracts).

Re: The Non-Innovation of Cryptocurrency

#77

Post by skohan » Thu, Jul 08, 2021, 9:35 AM UTC

dkshdkjshdk wrote: post #71

skohan wrote: post #62

Earlier quoted context omitted.

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.

Regarding point 2, what's wrong with assuming that 1 BTC is worth 1 BTC now and forever? If I'm not trading asset A for asset B, then it's hardly "speculation". If it makes it any better, I can lend BTC and ask to get returns in USDC (which should be worth as much as 1 USD, if you trust Coinbase). Am I still speculating? Regarding point 3, where is the speculation, exactly? If, at any point, the BTC I left as collate…

> what's wrong with assuming that 1 BTC is worth 1 BTC now and forever?

Because if 1 BTC = 0 USD, and has no real-world utility outside of speculation, there is no compelling reason to try to acquire more BTC.

Re: The Non-Innovation of Cryptocurrency

#78

Post by RandomLensman » Thu, Jul 08, 2021, 9:37 AM UTC

redpiller wrote: post #63

RandomLensman wrote: post #40

Earlier quoted context omitted.

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 independentl…

Fair enough. For me this is a much better "pitch" than the "absolute certainty" above.

The way I understand it, you help align incentives better and improve financial oversight while your tool of choice is some blockchain structure (others might work, too). And it seems to me that is mainly directed at smaller businesses with limited auditing requirements and in distributed settings.

Re: The Non-Innovation of Cryptocurrency

#79

Post by denton-scratch » Thu, Jul 08, 2021, 9:38 AM UTC

lmm wrote: post #35

neilwilson wrote: post #21

"There are indeed a lot of fools in this world, but to presume an infinite chain of them as the core of an investment thesis is beyond absurd." It's worked for gold and diamonds for generations. Not to mention pretty much every artwork or other concoction human beings create and then collect. There's not a lot of cash flow from first edition Marvel comics, but there are an awful lot of them stored in plastic bags. Hu…

> It's worked for gold and diamonds for generations. Gold has literally millennia of tradition. Diamonds have minimal resale value and are not bought as investments. > Not to mention pretty much every artwork or other concoction human beings create and then collect. > There's not a lot of cash flow from first edition Marvel comics, but there are an awful lot of them stored in plastic bags. Right, and IMO that kind of…

> Diamonds have minimal resale value and are not bought as investments.

Could I please have a quote for some of your minimal-price used diamonds?

Re: The Non-Innovation of Cryptocurrency

#80

Post by dkshdkjshdk » Thu, Jul 08, 2021, 9:41 AM UTC

RandomLensman wrote: post #66

dkshdkjshdk wrote: post #52

Earlier quoted context omitted.

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 la…

> 1) Granted, but also EURUSD pricing does not work like any AMM [...]

Exactly. So, if I want to put liquidity in EURUSD market, I have no choice but to actively manage it, since traditional financial institutions won't do it for me. That was my point... to bring up examples of use-cases that are not covered by traditional financial institutions.

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

Sure, lending is regulated. But then the problem mostly lies with AAVE (for example), not me (they are the one lending my assets, after all, and the ones possibly subjected to KYC laws), I would assume.

My point is... even if you are willing to go through KYC, and have nothing to hide (e.g. you got your crypto-assets, or whatever you want to call them, legitimately, and file your taxes correctly), there simply is no traditional financial institution that has a "BTC savings account", for example.

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

Probably. But then the argument that "there is no actual use-case for blockchain outside of crime and speculation" kinda breaks down. If you consider Genesis to be part of "traditional finance", then it's clear that "traditional finance" sees value in these things (it's not just vapor). If you consider Genesis to not be part of "traditional finance", then you're just confirming what I implied: there isn't anyone in "traditional finance" providing such services.