The Handwavy Technobabble Nothingburger of Crypto • Hacker News Board

Re: The Handwavy Technobabble Nothingburger of Crypto

#471

Post by giantrobot » Wed, Nov 24, 2021, 7:04 PM UTC

bobmichael wrote: post #73

keyanp wrote: post #62

Earlier quoted context omitted.

> the ability to trust that the ledger is accurate seems extremely valuable Maybe it "seems" valuable, but why exactly is it valuable? For what use case and which situation (besides crime)? I think the issue is that many don't see value in its "primary value proposition" because the features they want from banks are already there (stability, FDIC insurance). The only thing I personally see missing is no/low-fee insta…

One IMO realistic use-case is providing a wealth preservation mechanism for people living in a country with a corrupt government that's experiencing hyperinflation, for example Lebanon.

People living under a corrupt government and experiencing hyperinflation are no safer or necessarily better off with cryptocurrency. Conducting cryptocurrency transactions requires a non-trivial amount of infrastructure. Even "offline" transactions with a Rube Goldbergian number of mesh network components needs all those components to work.

A fortune in Bitcoin in a conflict/disaster zone is no more useful than a fortune in dollars in a bank if you can't access it readily. Your fortune means shit if you can't buy a loaf of bread.

Even if you can access the infrastructure necessary to spend cryptocurrency to buy a loaf of bread they provide no protection against localized inflation. Prices of goods in a conflict zone increase significantly due to dangers/difficulty associated with the supply chain or lack thereof. Sometimes they increase due simply to greed. Transacting in a cryptocurrency doesn't help at all with this. Your Bitcoin fortune can be wiped out just feeding your family since your only other option is to starve to death.

Re: The Handwavy Technobabble Nothingburger of Crypto

#472

Post by tempest_ » Wed, Nov 24, 2021, 7:05 PM UTC

AlexandrB wrote: post #412

rawtxapp wrote: post #389

Earlier quoted context omitted.

If this was 2013, I would agree with you, because the risk of it being worth nothing was much larger, but today the Bitcoin blockchain moves thousands of bitcoin per day (worth billions of dollars in value) and it's network effects are stronger than ever before and you can see usage go high through on-chain metrics (like # wallets, transfers) and increase in lightning network usage (1ml.com). So I would say, investin…

I think this is actually an argument for investing in crypto.com, other exchange companies, or some of the huge bitcoin mining operations. These are the entities creating value by keeping the bitcoin network running and moving $millions worth of bitcoin around between wallets. Owning bitcoin itself does not grant you any equity in these profit-making entities that actually make bitcoin work.

Don't mine gold during the gold rush, sell pick axes.

Re: The Handwavy Technobabble Nothingburger of Crypto

#473

Post by sjtindell » Wed, Nov 24, 2021, 7:05 PM UTC

Imnimo wrote: post #440

sjtindell wrote: post #425

Earlier quoted context omitted.

I guess to me it’s more about progression. From Bitcoin, to Ethereum, to Uniswap, there is a strong development of the early ideas and technology. This doesn’t seem like it will just stop to me. It indicates a very bright future in my opinion. Also, although I get disillusioned, I personally have come to appreciate more that the value being produced is financial. There is clearly massive pent up demand for financial…

I mean, if someone showed by some great new innovation to let HFT shops move faster, I'd also be a bit nonplussed. If the answer is just "well, this is no more useless other frivolous* money games", then I'm not really convinced. *frivolous in the sense of real utility. Obviously they make boatloads of money.

Sure. I guess what I’ve come to accept more is that what people on Wall Street do is real. Games are real. I don’t personally buy into the “new world currency”, “real world use case, I’m gonna own my house on a blockchain” lines of thinking. The use case is still being fleshed out but in my opinion it’s much more likely to produce lots of Citadels than lots of Amazons or Googles if that makes sense. Whereas I think that HN believes it will just go away because it’s all a scam.

Re: The Handwavy Technobabble Nothingburger of Crypto

#474

Post by acjohnson55 » Wed, Nov 24, 2021, 7:05 PM UTC

sjtindell wrote: post #354

llimos wrote: post #301

Most people on HN are rational people who look at the world in a rational way. Bitcoin and friends are not operating in a rational market, therefore we don't understand them, and most of us would probably be pretty lousy investors since we would try to make decisions rationally instead of memeing and YOLOing. But, and this is a key point, that doesn't make us right and them wrong . It's just a different kind of marke…

HN’s attitude is very surprising to me. I would think that they could get very excited about flash loans, decentralized exchanges (automated market makers), daos, and other concrete innovations coming out of crypto asset projects. I think it’s mostly jealousy and a feeling that they missed the boat, so they want to see it sink. I think that because I’ve had the feeling many times. They may not realize these are early…

While extremely interesting and even innovative, of those innovations are only useful in the hermetic world of their own blockchain, due to the oracle problem. The idea of real-world DeFi is purely hypothetical, at this point.

Re: The Handwavy Technobabble Nothingburger of Crypto

#475

Post by spiddy » Wed, Nov 24, 2021, 7:06 PM UTC

tux1968 wrote: post #291

moolcool wrote: post #224

Earlier quoted context omitted.

(not an economist) If most bitcoins are bought with USD, all else remaining equal, wouldn't this automatically happen?

I'm not an economist either... but the buying power of your bitcoin goes down if people demand more of it for a given product. If USD prices rise, the bitcoin price will rise too, meaning your bitcoin wealth is affected by inflation, and you're not protected from the Fed printing money.

You assume there is a correlation between USD and BTC. Another way to see this is this:

If USD prices rise, the price of BTC will also rise, as BTC is another product you can buy with your USD. Meaning your bitcoin wealth is not affected by USD inflation.

Re: The Handwavy Technobabble Nothingburger of Crypto

#476

Post by AlexandrB » Wed, Nov 24, 2021, 7:06 PM UTC

rawtxapp wrote: post #436

AlexandrB wrote: post #412

Earlier quoted context omitted.

I think this is actually an argument for investing in crypto.com, other exchange companies, or some of the huge bitcoin mining operations. These are the entities creating value by keeping the bitcoin network running and moving $millions worth of bitcoin around between wallets. Owning bitcoin itself does not grant you any equity in these profit-making entities that actually make bitcoin work.

That's one way of looking at it, but most stocks don't pay dividends, so that "equity" is also not that tangible either, unless you're like a majority shareholder that you can change company direction. When you buy a stock, that money doesn't go to the company, it goes to previous investor, unless the company issues more stock (usually the opposite happens). Also, Bitcoin's success doesn't mean those companies will s…

A stock literally represents a unit of ownership of the underlying company. No, it's not tangible in the "I can touch it" sense - unless you get a LOT of it as you said, but it's backed by hundreds of years of contract law precedent. When I own stock I get quarterly reports on the performance of the company - revenue, profit, etc. - these allow me to evaluate whether I think the company is doing well or poorly and gauge if I want to continue to invest.

Whether the stock pays dividends or not isn't really relevant to my argument. My point is that the price of Bitcoin is completely divorced from any sense of economic "value". There are no earnings to forecast, no revenues to examine. The only way to determine if bitcoin is going to go up or down is gauging sentiment (i.e. groupthink) or just faith. Even sports betting provides more information for decision making like past performance of the athletes.

Re: The Handwavy Technobabble Nothingburger of Crypto

#477

Post by Imnimo » Wed, Nov 24, 2021, 7:06 PM UTC

timdaub wrote: post #457

Imnimo wrote: post #442

Earlier quoted context omitted.

Sure, but it's being presented as a reason to be excited about crypto, so any non-crypto applications aren't really relevant here.

Sounds like you're being deliberately picky to get your point across that crypto is shit.

Hmm, I don't think I am. I'm just saying that Uniswap for non-crypto assets isn't really a demonstration of how cool crypto is.

Re: The Handwavy Technobabble Nothingburger of Crypto

#478

Post by pcthrowaway » Wed, Nov 24, 2021, 7:07 PM UTC

Accujack wrote: post #249

anonymoushn wrote: post #11

This particular source is extremely low quality and is motivated by the author's undisclosed competing product. I would like to see higher quality sources on the front page of hacker news one day.

I agree. Just the fact that he lumps Doge and Bitcoin together into "meme coins" tells me he has no idea what he's talking about or that he has an ulterior motive. Whatever you think about those two coins, they are not really similar, especially given that some nations have made Bitcoin legal tender at this point.

I'm very much looking forward to seeing the way cryptocurrency revolutionizes the world in the next 20-50 years, but even I don't see any difference between Dogecoin and Bitcoin other than Doge having a dog on it.

Yes, it's pretty unorthodox to consider Bitcoin a memecoin, but it is fundamentally nearly identical to doge, but with even less energy efficiency.

The fact that it's a more established asset class with wider adoption does make it more useful to most people, but this isn't due to anything intrinsic to bitcoin or dogecoin

Re: The Handwavy Technobabble Nothingburger of Crypto

#479

Post by 1970-01-01 » Wed, Nov 24, 2021, 7:07 PM UTC

Animats wrote: post #430

What's so striking about all this is the sheer scale. There have been bubbles before, but not trillion dollar ones based on nothing. It's not just Bitcoin and friends. Rivian, which is just starting out as an electric light truck manufacturer, has a market cap of US$98 billion. First vehicles will ship no sooner than January 2022. This is more market cap than Ford Motor, the #1 seller of light trucks for the last 44…

Rivan began truck delivery months ago. Lordstown has a suitcase full of cash and a direct flight to Maldives coming up.

Re: The Handwavy Technobabble Nothingburger of Crypto

#480

Post by TomSwirly » Wed, Nov 24, 2021, 7:07 PM UTC

llimos wrote: post #301

Most people on HN are rational people who look at the world in a rational way. Bitcoin and friends are not operating in a rational market, therefore we don't understand them, and most of us would probably be pretty lousy investors since we would try to make decisions rationally instead of memeing and YOLOing. But, and this is a key point, that doesn't make us right and them wrong . It's just a different kind of marke…

> but it is for sure possible to make money in it.

If it's a bubble, what that means is that almost everyone is going to lose money on it.

> It's just a different kind of market,

Would you say that magic is a different kind of science? I'd say that magic is simply false to the fact. I think it can convince people to do things, but it has no objective reality beyond that.

And cryptocurrencies have the same relationship to economics that magic has to science.