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Cryptocurrency in the 2020s

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Re: Cryptocurrency in the 2020s

#51

Post by colecut »

kspacewalk2 wrote: post #41
4AoZqrH2fsk5UB wrote: post #13

I’m pretty new to crypto in general, but it seems to me that the primary value of it in coming years would be anonymity/privacy. As I understand it Bitcoin has some problems in this regard, but others have solved it. I just can’t find it hard to believe we get to 2030 without a way to buy things anonymously online.

You have a way to buy things anonymously right now, it's called Bitcoin. If you mean a low-fee and frictionless way, it's unclear why that would ever develop. Unless everything you earn and do is anonymous, it seems to me that the transition between the anonymous store of value and your real identity (address, bank acct) will involve friction and cost.

It is fairly trivial to to follow a BTC transaction trail and deduce the owner of a wallet.

Other options such as Monero are better for this.

Re: Cryptocurrency in the 2020s

#52

Post by randaouser »

kspacewalk2 wrote: post #41
4AoZqrH2fsk5UB wrote: post #13

I’m pretty new to crypto in general, but it seems to me that the primary value of it in coming years would be anonymity/privacy. As I understand it Bitcoin has some problems in this regard, but others have solved it. I just can’t find it hard to believe we get to 2030 without a way to buy things anonymously online.

You have a way to buy things anonymously right now, it's called Bitcoin. If you mean a low-fee and frictionless way, it's unclear why that would ever develop. Unless everything you earn and do is anonymous, it seems to me that the transition between the anonymous store of value and your real identity (address, bank acct) will involve friction and cost.

Bitcoin is not anonymous and is subject to flow analysis. Zcash and monero have solved this in different ways with really intriguing primitives.

ZCash uses zksnarks which are a pseudo homomorphic encryption strategy to hide payments whereas monero is using linkable ring signatures.

Generally speaking, the blockchain community has really advanced the crypto field

Re: Cryptocurrency in the 2020s

#54

Post by v64 »

nordsieck wrote: post #46
v64 wrote: post #31

Earlier quoted context omitted.

The complete functioning of the MakerDAO system is publicly documented here [1] and here [2]. Feel free to peruse the documentation and point out which parts seem unbelievable. The system is currently live and I hold a Dai Savings Account and can attest I've been paid according to the system's documentation. [1] https://community-development.makerdao.com/makerdao-mcd-faqs [2] https://docs.makerdao.com/

> Feel free to peruse the documentation and point out which parts seem unbelievable. The system is currently live and I hold a Dai Savings Account and can attest I've been paid according to the system's documentation. The problem with bad financial instruments is not that they don't work at all, but that they work fine for a period of time and then blow up. I think the point your parent was trying to make is that the…

There are certainly black swan scenarios, such as the value of Ether dropping largely overnight, that would test the system and possibly lead to a decoupling of the peg. The bubble bursting in early 2018 tested this aspect of the system and the peg was able to be maintained.

The 6% Dai savings rate is not static. Overtime, both the interest rate charged to those taking loans and the savings interest rate will need to be adjusted in response to economic conditions in order to maintain the peg. These adjustments have occurred many times and are part of the normal operation of the system.

That being said, MakerDAO has considered these scenarios and in the event that the peg can't be maintained, an emergency shutdown procedure occurs that gracefully shuts down the system. There's a separate token called MKR, and holders of the MKR token are the lenders of last resort. In the event of an emergency shutdown, MKR token is printed and auctioned off to settle debts in the system, devaluing the MKR token. Similarly, when a loan holder pays off their debts to the system, they pay that in MKR token and the MKR they paid is burned, creating scarcity of the token to reward MKR holders.

Re: Cryptocurrency in the 2020s

#55

Post by nordsieck »

geekpowa wrote: post #43
nordsieck wrote: post #17

Earlier quoted context omitted.

> As has been remarked over and over again, they don't solve any above board problem more efficiently or with lower expense than existing technologies. If you mean by that, it's possible to have a fiat currency with no dilution, that is true. Crypto currencies are fundamentally a political innovation; it is much more politically expensive to force dilution onto a crypto-currency than a fiat one. Whether that's valuab…

Dilution / inflation is a feature not a bug. Money should be put to work doing productive stuff in the economy, not hoarded. Also crypto currencies, are not currencies. They are commodities. It is far more accurate, conceptually to think about them the same as precious metals and grains, not dollars.

> Dilution / inflation is a feature not a bug. Money should be put to work doing productive stuff in the economy, not hoarded.

There are few people who are interested in crypto-currency and have not heard this argument in many forms. Crypto-currency fans generally either don't care or don't think it's true.

Re: Cryptocurrency in the 2020s

#56

Post by v64 »

RcouF1uZ4gsC wrote: post #50
kspacewalk2 wrote: post #37

Earlier quoted context omitted.

>the use of public blockchains to automate the functions of clearinghouses and escrow services will be a huge cost reduction for many industries such as finance. But we don't want financial transactions to be fully automated and immutable. We want escrow services to be subject to laws, we want a judicial undo and modify button. So if you remove the whole "no one can change history" bit because it's an anti-feature, i…

> But we don't want financial transactions to be fully automated and immutable. And cryptocurrency does not provide immutability anyway. Remember the DAO Ethereum fiasco where they lost a bunch of money and decided to roll it back.

This is a legitimate point to bring up, but seeing as how the community rejected a second fork in order to fix a bug in a smart contract that destroyed millions of dollars worth of Ether [1], I feel confident at this point saying that another similar hard fork will not occur.

[1] https://www.cnbc.com/2017/11/08/accidental-bug-may-have-froz...

Re: Cryptocurrency in the 2020s

#57

Post by induetimesir »

v64 wrote: post #16
asdfasgasdgasdg wrote: post #7

Consider the source, right? How many people without a large vested interest in the propagation and uptake of cryptocurrency consider further growth likely? My guess is that governments will more and more realize that the main utility of blockchains is money laundering and speculation. As has been remarked over and over again, they don't solve any above board problem more efficiently or with lower expense than existin…

I honestly don't understand where the perception comes from that this technology is only useful for laundering and speculation. Certainly it is currently being used for those purposes. But to say there is no imaginable use outside of that seems unwarranted. I've commented in the past here that the use of public blockchains to automate the functions of clearinghouses and escrow services will be a huge cost reduction f…

Well said.

pegged decentralized synthetic digital bearer assets.

That's a mouthful. Each word has a purpose and together they describe a hugely innovative and valuable technology. It is my belief that there are very, very few people who have an understanding of how important this innovation is.

And too few people understand the importance of the more simple digital bearer asset, of which bitcoin is the prime example. This still surprises me, especially amongst HN readers, who are certainly more insightful than the average bear when it comes to most existing and emerging technologies...

Surprises me. but also gives me hope.

There is so much room to grow. Long road. Massive upside.

Re: Cryptocurrency in the 2020s

#58

Post by iamaelephant »

v64 wrote: post #16
asdfasgasdgasdg wrote: post #7

Consider the source, right? How many people without a large vested interest in the propagation and uptake of cryptocurrency consider further growth likely? My guess is that governments will more and more realize that the main utility of blockchains is money laundering and speculation. As has been remarked over and over again, they don't solve any above board problem more efficiently or with lower expense than existin…

I honestly don't understand where the perception comes from that this technology is only useful for laundering and speculation. Certainly it is currently being used for those purposes. But to say there is no imaginable use outside of that seems unwarranted. I've commented in the past here that the use of public blockchains to automate the functions of clearinghouses and escrow services will be a huge cost reduction f…

> A holder of Dai can earn 4% APY through a Dai Savings Account, and a vote is currently in place to raise the rate to 6%.

Why not just vote to make it a million percent?

Re: Cryptocurrency in the 2020s

#59

Post by v64 »

iamaelephant wrote: post #58
v64 wrote: post #16

Earlier quoted context omitted.

I honestly don't understand where the perception comes from that this technology is only useful for laundering and speculation. Certainly it is currently being used for those purposes. But to say there is no imaginable use outside of that seems unwarranted. I've commented in the past here that the use of public blockchains to automate the functions of clearinghouses and escrow services will be a huge cost reduction f…

> A holder of Dai can earn 4% APY through a Dai Savings Account, and a vote is currently in place to raise the rate to 6%. Why not just vote to make it a million percent?

Because then you'd have to change the interest rate charged to loan holders to a million percent, and those people would close their loans rather than pay that interest rate.
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