Earlier quoted context omitted.
Such as?
Smart contracts enable all sorts of utility that we are still just barely scraping the surface of.
Like?
Ask HN: Why crypto is rising so fast when its not creating value?
51–60 of 153 posts
Re: Ask HN: Why crypto is rising so fast when its not creating value?
#52Speculation of meme coins has dominated the news recently but there are some amazing coins with real utility. Ethereum tends to get viewed negatively because it can become so insanely expensive to do anything on the chain but in reality that means that the market is willing to pay for those transactions to occur which suggests that there is some real utility to the ecosystem that has real world value.
> in reality that means that the market is willing to pay for those transactions to occur which suggests that there is some real utility
It means that it is useful for those who can afford the absurd gas prices for just about any operation on Ethereum than those who are sending small amounts to perhaps test before permanently sending their money to a dead wallet and paying the gas fee too.
So it makes sense for someone to pay >= $1,000 in fees to approve and move / swap $1 - $100 worth of tokens? That is not 'real utility'. It makes it really useless.
Re: Ask HN: Why crypto is rising so fast when its not creating value?
#53Speculation of meme coins has dominated the news recently but there are some amazing coins with real utility. Ethereum tends to get viewed negatively because it can become so insanely expensive to do anything on the chain but in reality that means that the market is willing to pay for those transactions to occur which suggests that there is some real utility to the ecosystem that has real world value.
It’s a fallacy to think that just because people want to do something it is valuable. People have wanted to do some insanely wasteful or horrible things in the past.
Economics is not a philosophically-laden exercise.
Economics defines value as that which a rational agent is willing to make a sacrifice for, and the degree to which something is valued by that actor is exactly measured by what they're willing to sacrifice.
Why is this not valuable? Or, rather, what might a better definition entail? A precise formulation isn't required, I'd be happy to see a rough sketch of necessary and/or sufficient conditions.
Re: Ask HN: Why crypto is rising so fast when its not creating value?
#54Earlier quoted context omitted.
It’s a fallacy to think that just because people want to do something it is valuable. People have wanted to do some insanely wasteful or horrible things in the past.
Economics is not a philosophically-laden exercise. Economics defines value as that which a rational agent is willing to make a sacrifice for, and the degree to which something is valued by that actor is exactly measured by what they're willing to sacrifice. Why is this not valuable? Or, rather, what might a better definition entail? A precise formulation isn't required, I'd be happy to see a rough sketch of necessary…
The problem is that everyone is somewhat irrational. You cannot both exclude irrational behavior from your definition of value and at the same time claim nfts are worth money and thus rational. Im claiming they are irrational and not useful.
Re: Ask HN: Why crypto is rising so fast when its not creating value?
#55I think crypto space has managed to create a class of unregulated financial instruments and markets - I feel like I'm watching what would happen if the stock market was not regulated at all. If I were Wall Street trader, I think this is really fascinating - sufficient amount to be interesting (billions of dollars at play) and regulators are yet to make sense of what's going on.
FYI, there are less than 5000 publicly traded companies in the US but more than 6000 cryptocurrencies.
Re: Ask HN: Why crypto is rising so fast when its not creating value?
#56Speculation of meme coins has dominated the news recently but there are some amazing coins with real utility. Ethereum tends to get viewed negatively because it can become so insanely expensive to do anything on the chain but in reality that means that the market is willing to pay for those transactions to occur which suggests that there is some real utility to the ecosystem that has real world value.
> in reality that means that the market is willing to pay for those transactions to occur which suggests that there is some real utility It means that it is useful for those who can afford the absurd gas prices for just about any operation on Ethereum than those who are sending small amounts to perhaps test before permanently sending their money to a dead wallet and paying the gas fee too. So it makes sense for someo…
> So it makes sense for someone to pay >= $1,000 in fees to approve and move / swap $1 - $100 worth of tokens?
That's like arguing that all container ships are useless because I only order a few dozen small packages a year.
The gas prices are set by supply and demand so the value created by the gas prices must be an acceptable cost for the amount of value the transaction is creating.
Just because something is cost prohibitive at your scale doesn't mean it is for everyone.
Re: Ask HN: Why crypto is rising so fast when its not creating value?
#57Some of the value cryptocurrencies create may be that they have become an opportunity for working class people to get exposure to risk, leverage, arbitrage, volatility, and privacy that only very wealthy people had access to previously. Would be an explanation consistent with the Varian Rule. It's the poor(er) persons FX trading, which provides liquidity and price discovery.
What does cryptocurrency move from one place to another? Risk, arguably, and it does it faster, cheaper, farther, and more verifiably than cash. That's probably the most amazing service since the Medici's brought modern banking to the world.
Re: Ask HN: Why crypto is rising so fast when its not creating value?
#58Earlier quoted context omitted.
Such as?
A distributed namespace system is pretty cool ( https://ens.domains/ )
Good idea, however it's a shame that this is sitting on a very inefficient blockchain, its TLD already collides with Ethiopia and to renew requires paying for the highly expensive gas fees which isn't great if you own multiple subdomains.
The subdomains on ENS (which are all sitting on the .eth TLD) are also going to be in good hands; surely. /s
Re: Ask HN: Why crypto is rising so fast when its not creating value?
#59Earlier quoted context omitted.
If someone was willing to pay for it, it had value to them. That's value.
If I want to murder people does murdering people have value?
The net value to society is likely negative since the impact on the target is large, and a society that allowed such things may see time horizons constrict.
You raise some good points, though. I personally am probably coming with an unspoken understanding that 'given that something fits into a legal and moral structure, and we accept a certain definition of using something by choice as value' then paying more for that thing implies more value. Facebook is probably a good example of something in the grey area, connecting people has value, but generating demand is questionable, spreading misinformation is likely a large net negative.
Re: Ask HN: Why crypto is rising so fast when its not creating value?
#60Cryptocurrency is backed by the same thing as any other currency: popularity and consumer confidence. Whether such sentiments are "warranted" or "deserved" is a subjective matter, but that is irrelevant to determining its economic influence - enough people have invested in it for network effects to all but guarantee its continued relevance.
I'm on the pro-crypto side, but the US dollar has more than consumer confidence, it has the largest armed forces the world has ever seen. So a better comparison is something like gold, I think, that has value because we say it has value (it's shiny! and rare...)... which is fine, just different.