Dogecoin's inventor looks to the past for insight into the future • Hacker News Board

Re: Dogecoin's inventor looks to the past for insight into the future

#251

Post by ric2b » Mon, Jan 15, 2018, 12:14 PM UTC

Certhas wrote: post #141

splintercell wrote: post #119

Earlier quoted context omitted.

> It baffles me how seemingly capable people have had the idea that a cryptocurrency would counter 2008 style stuff. It seems like a reasoning short circuit: Big institutions failed us, so something without big institutions must be immune. I think you misunderstood what people mean by saying "counter 2008 style stuff". The aim isn't to prevent 2008 from happening again, but if 2008 were to happen again, then be in a…

What you outline is the libertarian/neoliberal case for crypto, and while more coherent (and is built into the currency with the whole "fixed total supply" structure) it seems to me no less of a fantasy. The state can damn well impose capital controls and confiscate accounts. You transfer the money elsewhere continue to use it? The state now has perfect transparency to see that. Did you own any assets in the country…

You can be pseudo-anonymous with Bitcoin, if you know what you're doing.

You can use Monero if you want to keep your balance and transactions truly private.

Re: Dogecoin's inventor looks to the past for insight into the future

#252

Post by ska » Mon, Jan 15, 2018, 4:00 PM UTC

trevelyan wrote: post #189

ska wrote: post #128

Earlier quoted context omitted.

It actually would deal with the issue that led to the GFC. It really wouldn't. The decisions that led to this were made by people who had access to all the data they needed to achieve better understanding, but that didn't help. The idea that it would become trivial to distinguish between good and bad investments seems to me to be incredibly naive.

> The idea that it would become trivial to distinguish between good and bad investments seems to me to be incredibly naive. It is not naive. It is exactly how smart contracts work. If you purchase a CDO on a blockchain, you are purchasing a share of whatever revenue paid into another contract. You can monitor those contracts, and the ones that are programmed to pay into THEM, and the ones that are programmed to pay i…

That's a fantasy. The problem with 2008 for example wasn't the inability to make simple algorithmic decisions based on metric, it was that the fundamental risk was obscured (intentionally). Smart people mis-analyzed this and made poor decisions, because to some degree the instruments were designed for that purpose. Smart contracts do nearly nothing to mitigate this problem.

Re: Dogecoin's inventor looks to the past for insight into the future

#253

Post by trevelyan » Tue, Jan 16, 2018, 11:54 AM UTC

jhwang5 wrote: post #245

trevelyan wrote: post #240

Earlier quoted context omitted.

The problem with this is that overall losses were nowhere near 65 cents on the dollar -- only 20 percent of US mortgages were subprime at the peak of the GFC. If the market was rational and had full insight into the performance of its securities, losses would have been no more than 20-35 cents on the dollar. That is enough to cause a major crisis, but it wouldn't trigger the paralysis of the global financial system.

So now you are shifting the argument to a market information problem to a market irrationality problem. Typical.

Typical of what? It is impossible for the market to be rational without information. Rationality is predicated on it.

Re: Dogecoin's inventor looks to the past for insight into the future

#254

Post by trevelyan » Tue, Jan 16, 2018, 11:56 AM UTC

ska wrote: post #252

trevelyan wrote: post #189

Earlier quoted context omitted.

> The idea that it would become trivial to distinguish between good and bad investments seems to me to be incredibly naive. It is not naive. It is exactly how smart contracts work. If you purchase a CDO on a blockchain, you are purchasing a share of whatever revenue paid into another contract. You can monitor those contracts, and the ones that are programmed to pay into THEM, and the ones that are programmed to pay i…

That's a fantasy. The problem with 2008 for example wasn't the inability to make simple algorithmic decisions based on metric, it was that the fundamental risk was obscured (intentionally). Smart people mis-analyzed this and made poor decisions, because to some degree the instruments were designed for that purpose. Smart contracts do nearly nothing to mitigate this problem.

> The problem with 2008 ... was that the fundamental risk was obscured

Yes. And this is impossible with smart contracts. You can commit fraud by pricing the asset, but you can't prevent the market from demonstrating its quality in real-time.

With smart contracts there would have been a housing bubble, but there would also have been an inflow of capital when the market-value of the majority of CDOs crashed below about 80 cents on the dollar.

Re: Dogecoin's inventor looks to the past for insight into the future

#255

Post by wellboy » Tue, Jan 16, 2018, 8:32 PM UTC

saosebastiao wrote: post #53

josu wrote: post #44

Earlier quoted context omitted.

As of now Dogecoin has a 24hour volume of 58M US dollars. This is not just one person, this is a market consensus on the value of each coin.

And what if 90% of that market consensus is really just 10 different high frequency traders battling for top market making position, with the occasional humdrum buying to "diversify"? The market depth says a lot more about a currency's value than the market price or even volume does. It's not something that can be summed up into a tidy single number, though. Which means people don't talk about it when when writing gl…

This would imply that all cryptos are handled by 10 bots, which isn't the case. Coinbase added 1 million users in June last year, and that's just one exchange, so think if crypto owners approximating 100 million people. They sure also buy cryptos, not only bots.

Re: Dogecoin's inventor looks to the past for insight into the future

#256

Post by [deleted] » Wed, Jan 17, 2018, 4:51 PM UTC

mrb wrote: post #171

AlexandrB wrote: post #143

Earlier quoted context omitted.

> Of course it will recover. Blockchain technologies are so transformational that you need a lot more than a simple price crash to kill cryptocurrencies. Are they transformation? I have yet to see a blockchain application that's not done more cheaply with a traditional database. Most of the practical uses of blockchain are as effectively centralized "distributed" databases (e.g. corporate blockchains), while the rest…

A blockchain-based cryptocurrency has 3 central qualities: decentralized, permissionless, irreversible transfers. That's what makes it transformational. No other currency or system can provide these 3 properties (except physically exchanging a commodity, eg. exchanging gold in the real world.) You claim most cryptocurrencies are "effectively centralized", but that is false. For example if I make a Bitcoin transfer by…

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