Cryptocurrency in the 2020s • Hacker News Board

Re: Cryptocurrency in the 2020s

#61

Post by chii » Fri, Jan 03, 2020, 11:41 PM UTC

nordsieck wrote: post #17

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…

> 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…

> a political innovation

if a regime is threatened with removal of a sovereign power (issuance of currency), i'm sure they will forcifully retake that power by outlawing the means of doing so. Bitcoin is of no exception. political problems can only be solved with political tools, not technological tools.

Re: Cryptocurrency in the 2020s

#62

Post by chii » Fri, Jan 03, 2020, 11:44 PM UTC

nordsieck wrote: post #55

geekpowa wrote: post #43

Earlier quoted context omitted.

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.

whether crypto fans think or believe it to be false (or not care) is irrelevant. Crypto has only shown the characteristics of a speculative commodity (like gold), and the laws of economics are as universal as any other law - bitcoins cannot become a currency unless it is done by fiat (like how china is exploring doing so right now, but with their own version of a crypto-currency where they control the chain).

Re: Cryptocurrency in the 2020s

#63

Post by induetimesir » Fri, Jan 03, 2020, 11:44 PM UTC

ianferrel wrote: post #29

RcouF1uZ4gsC wrote: post #26

Earlier quoted context omitted.

> If you look at what MakerDAO is doing with the Dai stablecoin, they've proven that it's possible to create a synthetic asset closely pegged to the dollar purely through financial incentives, and they did it all just using Ethereum v1. 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%. >I personally find it incredible that an asset exists on the b…

Seriously. The risk adjusted return on whatever that crazy contraption is is almost certainly negative, and probably incalculably so. The idea that any sane financial instrument could increase its return by two points by the holders of it voting to do so is... I haven't the words.

In a way, you're absolutely right.

In another way, you're totally missing the point.

Net ROI hasn't been great for people who were earning x% interest on their ETH while it tanked 50%+.

But the _idea_ the animates DAI, the dream of a decentralized synthetic digital bearer asset, that's a worthwhile dream imo. It's not a simple idea to understand. And it's not simple to implement technically/socially. But DAI has been a beautiful experiment in attempting to create this new-fangled thing. and while the jury is still out on whether the model/architecture they've chosen will hold up, the experiment itself should, in my view, be declared a massive success - it has, for the most part, worked very well. And DAI opens the door to new experiments. And they'll come. A trickle at first. but in 10yrs, it'll be an entirely different landscape when it comes to complex financial instruments. They'll be available in the way stocks can be had on Robinhood. and more. bcs financial instruments that are currently too complex or expensive to be practical, will be within reach. The rabbit hole is deep. and it is real. You can dive in and start learning. Or yell at clouds until your boat gets lifted by a wave of innovation...

Re: Cryptocurrency in the 2020s

#64

Post by iamaelephant » Fri, Jan 03, 2020, 11:44 PM UTC

nobleach wrote: post #12

drcross wrote: post #10

Earlier quoted context omitted.

I remember people scoffing at the concept of 100 dollars per bitcoin like it couldn't possibly happen.

I remember people scoffing at the internet like there no legitimate use-cases for it. "Yeah, we have places for information, it's called Grolier's Encyclopedia on CD-ROM, and it's cheap!". "I already have yellow pages delivered for free by C&P Bell". While cryptocurrency may be quite a bit more narrow, blockchain is most likely a far more interesting technology.

> blockchain is most likely a far more interesting technology.

Why? Really, I would like to know why you think this. Append-only data structures have existed almost since the dawn of computing. Making it distributed and trustless doesn't seem to solve any real problems, which is why over a decade since they entered the public consciousness they are used for almost nothing interesting, and nothing that couldn't be done better in a centralised system.

Re: Cryptocurrency in the 2020s

#65

Post by chii » Fri, Jan 03, 2020, 11:45 PM UTC

Lerc wrote: post #34

>Olaf Carlson-Wee and Balaji Srinivasan estimate that at a price of $200,000 per Bitcoin, more than half the world’s billionaires will be from cryptocurrency This misses a key piece of information. They take the price as an an assumption for their argument, but that is insufficient to draw this conclusion. When Bitcoin reaches $200,000 is also a factor. The worlds existing billionaires will not sit still. If it takes…

there are people who also believe gold will reach $100k an ounce. I don't think that will happen, or if it did, society would've transformed so much that there bears little resemblance to today's world.

Re: Cryptocurrency in the 2020s

#66

Post by chii » Fri, Jan 03, 2020, 11:51 PM UTC

dcow wrote: post #30

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.

Anonymity is not a fundamental human right. Rather it’s a tool that should be available in extreme circumstances. Totally anonymous systems generally devolve over time. Nothing about crypto is inherently anonymous. Bitcoin was never meant to be anonymous. There’s a public ledger... Crypto a la Bitcoin is fundamentally about building distributed consensus. Secure distributed consensus requires strong identity. Whether…

i think the value of un-sanctionable funds is high, but only in times of turmoil. Think hong kong and the recent bank account seizures of the protestor organizations. If the financial system is tied to a fairly anonymous crypto, then the gov't cannot seize funds of organizations that oppose it (for better or worse).

Re: Cryptocurrency in the 2020s

#67

Post by nordsieck » Fri, Jan 03, 2020, 11:52 PM UTC

chii wrote: post #61

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…

> a political innovation if a regime is threatened with removal of a sovereign power (issuance of currency), i'm sure they will forcifully retake that power by outlawing the means of doing so. Bitcoin is of no exception. political problems can only be solved with political tools, not technological tools.

> political problems can only be solved with political tools, not technological tools.

Yes and no. Some technology changes the balance of power.

One of the best examples is the innovation of gunpowder weapons and the rise of democracy. It's not the case that the invention of the musket and cannon was solely responsible for the fall of monarchy and the rise of democracy. But it certainly helped.

Is crypto-currency that sort of innovation? I guess we'll find out.

Re: Cryptocurrency in the 2020s

#68

Post by induetimesir » Fri, Jan 03, 2020, 11:54 PM UTC

wpietri wrote: post #27

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…

Exactly. It has been 10+ years since the Bitcoin paper. No cryptocurrency has significant consumer adoption. [1], [2] Except for light financial crime (ransomware, money laundering, gambling, theft, etc), it has no demonstrated advantage over alternative technologies. I don't think it will go away, any more than Ponzi and Make Money Fast schemes have gone away. But like you, I expect it will fade into the background…

"no demonstrated advantage" - said by someone who doesn't remember what it's like to wait for a large check to clear.

or hasn't tried to fund their IRA via an ACH transfer but their bank won't allow it bcs rules..

or hasn't wanted to wire money (or receive a wire) for a fraction of the price (and hassle) of a wire transfer.

I have sent hundreds of bitcoin transactions. And I admit that it's not perfect. There's lots of room for improvement. But even given bitcoin's flaws, there are times where bitcoin is massively, gobsmackingly better than the traditional US banking system.

And the US financial system has been around 10x+ as long...

So much expectation born of such ignorance. It's a common problem for bitcoin. But not new. And it hasn't stopped bitcoin yet. and I doubt it will.

I believe we're on the cusp of a state change in the world of digital bearer assets. It's not that bitcoin will simply survive, it's more that programmable digital assets and digital bearer assets will steadily win over most other forms of value.

Unfortunately this isn't the kind of conversation that's likely to change minds - forum chats just don't tend to move the needle for most people who are entrenched in their positions. If we were to have a face to face conversation, I suspect we'd be able to find more common ground.

Oh well, I've watched the tide steadily turn over the last 7yrs. And I'll gladly watch opinion continue to shift over the next decade.

Re: Cryptocurrency in the 2020s

#69

Post by jrimbault » Fri, Jan 03, 2020, 11:59 PM UTC

Geee wrote: post #32

jrimbault wrote: post #14

I was thinking with some friends recently (new year's eve) : considering a bitcoin model with a fixed finite amount of currency, won't every coin be lost at some point due to storage failure/lost keys/etc ? Statistically ? And rather sooner than later, if my thinking is right ? Like the birthday problem ? There is a maximum of 21x10^6 bitcoins, imagining a 0.01 chance of losing 1 bitcoin/day ?

Yes, but every bitcoin is divided into 100000000 satoshis, and it's possible to add even smaller units in the future.

Who and/or what decides by what mechanisms and when satoshis would be divided into smaller units ?

Doesn't that make it virtually valueless by definition ?

Re: Cryptocurrency in the 2020s

#70

Post by xorcist » Sat, Jan 04, 2020, 12:13 AM UTC

waynecochran wrote: post #48

How do you fix their No. 1 problem: scalability? The blockchain updating, and certainly mining, are inherently slow.

Those are two different problems: scalability and finality.

Obviously every transaction can not be processed and stored by everyone. That much is clear even to casual observers. There has been two or three main ways people have tried to achieve this during the past decade.

The obvious thing to try would be to shard the blockchain like you would a database. This turns out to be hard to do in a trustless way since shards would need to interact. This realization and the contracts required to securely swap assets between otherwise separate chains leads naturally to:

Full on separate blockchains that run in parallel to the main one, checkpointing when needed (rootstock, drivechains). These are not limited by the main chain and can be specialized for custom use cases. The parallel chains are only interoperable by way of the main chain and need not know about each other, which helps scaling out.

Payment channels by the way of time locked contracts. Satoshi sketched out an initial implementation that turned out to be flawed. This has since been improved on and made bidirectional and made into a standard which is now the Lightning network. It has a number of real world limitations but the general idea is that only the parties involved in a transaction needs to know about it. An added benefit of this is that finality among these parties is immediate.

There have also been some work squashing a large number of transactions into a large transaction. This has the added benefit of obfuscating the flow of individual transactions, which otherwise makes everyone's holdings transparent (mimblewimble, grin). This requires new signature schemes and is hard to retrofit to existing blockchains and make security guarantees about.

There used to be ideas about Chaum like schemes on top of blockchains, but most of that interest probably went on into separate blockchain schemes.

Those are some of the ideas that have been tried, most have shown some promise but are more or less still at the research stage. Don't expect radical changes overnight.