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Cryptocurrency in the 2020s

blog.coinbase.com

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Re: Cryptocurrency in the 2020s

#151

Post by bouncycastle »

aazaa wrote: post #72

The trouble with this article is that the author doesn't seem to know what Bitcoin is for. Notice the vague treatment of actual cryptocurrency applications. There are lots of predictions about startup activity, "flippenings" and venture capital, but little about the goods and services customers will actually be buying, or what specifically startups will be building. It's this kind of thinking that leads people into t…

Your comment sounds like a priest delivering a sermon. No sources to back your argument up and also you missed a large fact that Bitcoin just doesn't scale for any of the applications you've outlined.

Re: Cryptocurrency in the 2020s

#152

Post by hnews_account_1 »

dane-pgp wrote: post #143
hnews_account_1 wrote: post #116

Earlier quoted context omitted.

Every single crypto that has tried to pass that limitation has remained centralised in one way or another. You can either: 1) have centralisation 2) assume storage space will expand exponentially since the entire point of bitcoin is many many copies of its ledger 3) come up with a new method more secure than PoW but still decentralised Good luck with (3). (1) and (2) are not good choices. So they moved it off the cha…

I'm not sure what you mean by "assume storage space will expand exponentially", since there is only a limited number of potential active crypto-currency users, making a small number of daily transactions (ignoring things like High Frequency Trading), recorded in a blockchain that grows linearly over time. Would you say that the credit card network, or PayPal, has exponentially increasing storage requirements? It's po…

I should've phrased that better. What I meant was to assume consumer affordable storage space will increase in size exponentially i.e. if we pay $0.01 / GB today, we should be paying fractions of that fraction in a year (because obviously "exponential" is loose term here).

> (ignoring things like High Frequency Trading)

HFT is not a blockchain transaction. They are off blockchain transactions entirely because they trade money between bitcoin / other cryptos and dollars.

> there is only a limited number of potential active crypto-currency users

My entire point is that this limits them from growing. If the blockchain is kept from exploding, it helps to onboard more users.

> Would you say that the credit card network, or PayPal, has exponentially increasing storage requirements?

Indeed not. But their user base is now standardised. So they have a predictable number of transactions every second. However, their storage requirements are still obviously industrial grade server farms. The point of bitcoin is that everyone should have a copy of every transaction (excluding lightning network transactions). You see the connection? Not all of us can have our own server farms. If we all wants to store every transaction in the way the parent of my previous comment alluded to (increase block size), each of us will need our own mini server farm i.e. exponential storage growth.

> It's possible for Bitcoin (for example) to be decentralised and useful to the world and only require linearly increasing storage space.

Yes. It'll level off at some point. But we are far, faaar away from that point. So it'll take quite a while before it levels off.

Re: Cryptocurrency in the 2020s

#153

Post by laurus »

vinniejames wrote: post #128
laurus wrote: post #87

Earlier quoted context omitted.

Are you against private banks being able to create money when they make loans? If so, why?

Banks don't create money, they create debt.

It's only a debt for the business who receives the loan.

When a business receives a loan it shows up as an asset to them in the form of a bank deposit. The business then usually uses that demand deposit to purchase goods and services, so people who don't owe debt to the bank get those deposits in their accounts, and spend the deposits, etc., etc. So effectively, private banks create money.

Re: Cryptocurrency in the 2020s

#154

Post by newguy1234 »

_7fvc wrote: post #137

I have a different view of the 2020s. We don't need more tokens or programmable technology. Money is the dominant use case for crypto. We still haven't figured out how to make crypto money that people can use beyond speculation. Notable projects will be around money use cases. Currently, we see Bitcoin, Tether, and stablecoins. In the 2020s, there will be more coins that people can use as money. We'll spend the next…

Check out open bazaar. It is a decentralized p2p market place similar to ebay. Even has a decentralized escrow system with moderators that get paid to resolve disputes. Best part of it is that there are no fees at all to buy/sell stuff other than the cryptocurrency transfer fees. You also pay a fee if there is an issue with the product you bought/sold etc.

Not much people using it though. Seems like best selling items are gift cards.

Re: Cryptocurrency in the 2020s

#155

Post by jimhi »

hanniabu wrote: post #146
jimhi wrote: post #8

Earlier quoted context omitted.

There is like ~5 million people using crypto right. I could see this being possible if that number was closer to 500+ million

At 500M it's already mainstream.

That’s my point, why would a startup implement it if it’s not mainstream and can bring a lot of customers. Startups barely pay attention to China and India consumers, much less a cryptocurrency holder.

Re: Cryptocurrency in the 2020s

#156

Post by v64 »

hnews_account_1 wrote: post #126
v64 wrote: post #82

Earlier quoted context omitted.

Those with loans in the system will have to pay a 6% interest rate. Since not all holders of Dai have savings accounts, this allows for the system to use the interest charged to loan holders to pay out the savings rate while accumulating a surplus. A 6% interest rate on USD would be a red flag, but Dai isn't USD. As far as I know, no banks allow you to use Ether as collateral for a USD loan, so the comparison isn't a…

> A 6% interest rate on USD would be a red flag, but Dai isn't USD. Is this written in their documentation? Cos this is where the smart money gets out. The DAI competes against the USD. So all their transactions have to be in USD. No vendor for your products is accepting these magical tokens. No one in the economy except vanishingly small fractions accept digital tokens for trade. Also, this is how the economy functi…

> No vendor for your products is accepting these magical tokens. No one in the economy except vanishingly small fractions accept digital tokens for trade.

MakerDAO has a list of vendors who accept Dai today [1]. The list also contains a number of payment processors that enable businesses to accept Dai. It's true that it's not widely used now, but every product has to start somewhere. I don't think I'm going to be getting paychecks in Dai within my lifetime, but that's no reason to discourage its growth.

> All they've done is create a bank and sprinkled the fairy dust of "tokens" on it so the Fed stays away.

You say that as if creating an automated decentralized bank that generates an asset pegged to the US dollar is something that just anybody could do. Regardless of how Dai is ultimately used, creating the system and deploying it to the public is a successful proof of concept in itself.

[1] https://github.com/makerdao/awesome-makerdao#spend-dai

Re: Cryptocurrency in the 2020s

#157

Post by v64 »

TylerE wrote: post #148
vinniejames wrote: post #110

Earlier quoted context omitted.

A default is not possible. The loans are fully secured by Ethereum. If collateral dips below an acceptable threshold, the collateral is liquidated and the debt is payed back to the system in full

What’s the point of the loan then? Why not just use the collateral at 0%?

I said this in another comment below:

> If you sell the Ether, you no longer have the Ether. If while you're holding the loan the price of Ether goes up, you benefit from that. Of course, if the price of Ether goes down, you're at risk of having your loan liquidated, but that's a requirement imposed by the system to maintain the Dai peg.

Re: Cryptocurrency in the 2020s

#158

Post by moduspol »

mundo wrote: post #142
pixelperfect wrote: post #105

Earlier quoted context omitted.

Bitcoin is continuing to scale, but it's doing so with the Lightning Network instead of by increasing block size. I'm not super familiar with Bitcoin's tech, but that seems sensible to me. The blockchain is already 250 GB at 7 transactions per second. If you multiplied that by 100, you still have orders of magnitude less transactions per second than credit card processors, but the hardware requirements are now high e…

Correct me if I'm misunderstanding things, but Lightning Network means off-chain transactions, right? Which can be be reneged on if one party is malicious, meaning they'll only occur between trusted parties? And in practice, that means traditional financial services companies and their KYC-compliant customers, which is the exact 180 degree opposite of the originally envisioned use case. From where I sit, it seems lik…

It's complicated, and I'm not sold on the Lightning Network as the future, but

> Which can be be reneged on if one party is malicious, meaning they'll only occur between trusted parties?

This is not correct. My understanding is essentially each party is tying up Bitcoin as being between them on the blockchain, then trading cryptographically verifiable assertions of each other off-chain about what the latest status of the ongoing "tab" is between them. Either of them can close the tab at any time and reconcile to the blockchain.

They don't really need to trust each other, although this does introduce a dependency on some entity (whether the user's own server or a third party) to publish the latest version of the "tab" if the other guy maliciously tries to publish an older version of the "tab." And of course, that means you need some redundant storage / handling of those cryptographic assertions from the other guy about what the status of the latest "tab" is. But that doesn't require trust--you'd want to do it even if you trust the other party.

Or at least that's my understanding of it. I like the conceptual idea of LN but some of these details seem like dealbreakers to me.

Re: Cryptocurrency in the 2020s

#159

Post by fourtens »

TylerE wrote: post #148
vinniejames wrote: post #110

Earlier quoted context omitted.

A default is not possible. The loans are fully secured by Ethereum. If collateral dips below an acceptable threshold, the collateral is liquidated and the debt is payed back to the system in full

What’s the point of the loan then? Why not just use the collateral at 0%?

maybe they want to leverage? take out a loan secured in eth, and use that loan to buy more eth

Re: Cryptocurrency in the 2020s

#160

Post by pixelperfect »

mundo wrote: post #142
pixelperfect wrote: post #105

Earlier quoted context omitted.

Bitcoin is continuing to scale, but it's doing so with the Lightning Network instead of by increasing block size. I'm not super familiar with Bitcoin's tech, but that seems sensible to me. The blockchain is already 250 GB at 7 transactions per second. If you multiplied that by 100, you still have orders of magnitude less transactions per second than credit card processors, but the hardware requirements are now high e…

Correct me if I'm misunderstanding things, but Lightning Network means off-chain transactions, right? Which can be be reneged on if one party is malicious, meaning they'll only occur between trusted parties? And in practice, that means traditional financial services companies and their KYC-compliant customers, which is the exact 180 degree opposite of the originally envisioned use case. From where I sit, it seems lik…

Lightning Network is primarily off-chain transactions, but parties don't have to trust each other. If you open a payment channel with a malicious party, there's no way for them to benefit, and the worst they can do is make you wait a few days for a timelock to expire in order to withdraw your funds. Admittedly, that's a bit of a nuisance, which is why I'm surprised fees for Lightning Network transactions are so low currently (approximately $0.00). I've already used Lightning Network several times without ever doing KYC.
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