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Crypto is an unproductive bubble

alexkolchinski.com

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Re: Crypto is an unproductive bubble

#271

Post by pavlov »

qgin wrote: post #263
cellis wrote: post #235

Earlier quoted context omitted.

Stocks "represent ownership", is such fiction I don't even know where to start. If you really believe this, I'd like to sell you 49% ownership in my next venture! I of course have 10x voting rights and can issue more shares whenever I'd like ('oh but why would you do that? Won't that depress the value of your stock too?' 1. Not really because of crazy structures of the banks that underwrite these issuances, and 2. Be…

Stocks have value because of dividends (or for stocks that don’t yet pay dividends, the likelihood that one day they will pay dividends). But ultimately, it is a bet on actual cash transfers from the profits of the business to your own pockets. All share price appreciation comes from bets (maybe far removed in time) on future dividend payments. Most crypto has no basis for value like this. Tokens based on proof of st…

Importantly, stocks represent cash flows.

Even stocks that don’t pay dividends can benefit from cash flows in the form of stock buybacks. Many big tech companies like Meta don’t pay dividends but do spend tens of billions on buybacks.

When a company buys its own stock, the value of the remaining shares appreciates. This is in some ways better than a dividend because you (as a shareholder) don’t need to pay tax on the cash distribution.

Many crypto proponents just don’t seem to understand how shares work and tokens don’t.

Re: Crypto is an unproductive bubble

#272

Post by danShumway »

gonehome wrote: post #230
danShumway wrote: post #228

Earlier quoted context omitted.

And among other things a price that's stable enough that you can actually cost goods without the value spiking upwards or downwards under your feet. Zoom out to the "all" range on https://www.bitcoinprice.com/ and try to tell me with a straight face that you're looking at a graph that belongs to a stable currency. Heck, even just look at the last two years. Part of the problem with Bitcoin in specific among all of th…

That’s not that big of a deal, just move BTC into a stable coin first and then use that for the transaction. Bitcoin is more akin to a gold like store of value than a currency.

I know that this thread jumps around a lot and you might be responding to multiple people, but quick reminder of the specific comment thread I'm responding to:

----

> You just need to control the onramps and offramps.

> Bitcoin is of no use if you can't exchange it for anything tangible.

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> All that's required for people to exchange it for something tangible, is for people to start.

----

The need to move BTC over to a stable coin before you spend it was part of Nextgrid's criticism to begin with. It requires an off-ramp, a functional exchange that will accept Bitcoin and give you something spendable.

I guess to be charitable, maybe the argument you're making is that the stablecoin is the transactable part of all of this and the stablecoin will be accepted ubiquitously and that it will be harder to regulate those kinds of exchanges. However, it's worth asking in that world why anyone would be using Bitcoin for transactions if they're just going to transfer it over to a better cryptocurrency later to spend it? Why wouldn't they just use the stablecoin?

Re: Crypto is an unproductive bubble

#273

Post by chasil »

delecti wrote: post #264
chasil wrote: post #255

Earlier quoted context omitted.

I want you to pay attention to this very carefully: https://www.openssh.com/releasenotes.html * ssh(1), sshd(8): add the sntrup761x25519-sha512@openssh.com hybrid ECDH/x25519 + Streamlined NTRU Prime post-quantum KEX to the default KEXAlgorithms list (after the ECDH methods but before the prime-group DH ones). The next release of OpenSSH is likely to make this key exchange the default method. There is a non-zero prob…

Doesn't quantum computing render most cryptographic security obsolete? I'm a cryptocurrency skeptic, but I've been under the impression that quantum computing is just as much a concern for traditional banking as for cryptocurrencies.

A quantum computer is most effective with key exchanges, at cracking the "discrete logarithm problem." It is not as effective with symmetric ciphers and hashes.

https://stribika.github.io/2015/01/04/secure-secure-shell.ht...

Re: Crypto is an unproductive bubble

#274

Post by luckydata »

Nextgrid wrote: post #145

Cryptocurrencies have a valid but very specific use-case: being able to transact in a hostile environment. It does so by making certain trade-offs such as an energy-intensive verification process. This is a very valid use-case when you need to transact against the will of a powerful adversary such as governments. It needs to be there and needs to be protected just like free speech needs to be protected. However, day-…

the amount of self delusion you need to write this down is frankly unbelievable

Re: Crypto is an unproductive bubble

#275

Post by [deleted] »

Nextgrid wrote: post #145

Cryptocurrencies have a valid but very specific use-case: being able to transact in a hostile environment. It does so by making certain trade-offs such as an energy-intensive verification process. This is a very valid use-case when you need to transact against the will of a powerful adversary such as governments. It needs to be there and needs to be protected just like free speech needs to be protected. However, day-…

[deleted]

Re: Crypto is an unproductive bubble

#276

Post by [deleted] »

benreesman wrote: post #43

How many times are we going to have this conversation? Yes crypto is an asset bubble, alongside equities, real estate, precious metals, you name it. Money printer go brrrr, more dollars are chasing the same amount of Apple sells iPhones. Crypto has no intrinsic value, it pays no dividend and doesn’t give you proxy rights, just like all the tech equities. Proof of work burns a lot of electricity, though this is compli…

[deleted]

Re: Crypto is an unproductive bubble

#277

Post by blep-arsh »

roenxi wrote: post #177
Nextgrid wrote: post #145

Cryptocurrencies have a valid but very specific use-case: being able to transact in a hostile environment. It does so by making certain trade-offs such as an energy-intensive verification process. This is a very valid use-case when you need to transact against the will of a powerful adversary such as governments. It needs to be there and needs to be protected just like free speech needs to be protected. However, day-…

Also, note that "take their stuff through extra-legal means" has become an uncomfortably common strategy in the west. Things like asset forfeiture, debanking in a myriad of forms, increased government intervention in financial systems, changing the rules suddenly every time a totally forseeable at some point financial crisis comes up (there is one every 10-15 years! they aren't surprises). It is completely reasonable…

Just for example, cryptocurrencies appear to be the best option if one wants to leave Russia with their savings at this point.

Re: Crypto is an unproductive bubble

#278

Post by dropnerd »

mattwilsonn888 wrote: post #33
jmcgough wrote: post #19

One of the biggest drawbacks for blockchain is that transactions can't be revoked after the fact (with the only exception being costly forks of the entire ledger), and there's no additional human oversight (like I'd get when sending a large amount of money through a bank) to protect me. If someone steals my credit card, I have my credit card company to give me some level of protection. They can block transactions if…

The beauty of crypto is that those tools are exposed and not required, and that the underlying rules are universal. Banks and custodial services built off of shared liability, insurance, reversions, any useful thing a bank does are still possible with crypto - in fact they aren't even that complicated. The difference is that while allowing a (properly set up) crypto bank to transfer funds you may also at any point an…

> An n of m scheme with each n being held by parties unlikely to collaborate is another solution.

there are two way to do this currently- multisig wallets and shamir's secret sharing algorithm.

multisig wallet is more widely supported. Gnosis Safe is a popular implementation, but requires multiple transactions per final action.

shamir's secret sharing allows splitting the secret off-chain, which means you only pay gas once. it's hard to find a safe implementation and be confident that it works correctly.

Re: Crypto is an unproductive bubble

#279

Post by ttul »

My personal view is that crypto currencies are basically the last frontier for capital to flow into in an environment of extreme accommodation and support by central banks. As central banks remove their support for the economy in the coming year or two, we ought to see a lot of money flowing out of crypto currencies and back into other things that are less risky.

Re: Crypto is an unproductive bubble

#280

Post by dropnerd »

Tijdreiziger wrote: post #91
mattwilsonn888 wrote: post #33

Earlier quoted context omitted.

The beauty of crypto is that those tools are exposed and not required, and that the underlying rules are universal. Banks and custodial services built off of shared liability, insurance, reversions, any useful thing a bank does are still possible with crypto - in fact they aren't even that complicated. The difference is that while allowing a (properly set up) crypto bank to transfer funds you may also at any point an…

> Crypto is FOSS finance, it works for the people as stated and expected. A laughable statement in the face of crypto’s negative externalities. We’ll wreck the planet we all share, but at least we’ll have FOSS finance!

i suspect that proof of stake cryptotokens at scale will consume less energy than video games and machine learning.
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