Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Cryptocurrency Singularity

medium.com

Post reply on HN
Print view View original

81–90 of 90 posts

Re: The Cryptocurrency Singularity

#81

Post by ramontayag »

antocv wrote: post #36
ineptech wrote: post #31

I don't understand how someone can talk about making everyday purchases with BTC without addressing the transaction fees and confirmation times. Doesn't it currently cost several dollars to spend a dollar? Is there some reason to think that in the far future confirmation times and transaction fees will trend towards zero?

Bitcoin is not the only cryptocurrency, and not all cryptocurrencies are based on a blockchain data-structure. There are other currencies which are not-inflationary, trustless and decentralized, and many more currencies with various levels of those properties, some are more centralized and require trust in a few in various ways, and some are decentralized trust-less but still inflationary. There is even cryptocurrenc…

I didn't bring it up because I suspect that we'll eventually find a scaling solution, whether it be sidechains, tree chains, riding on Moore's law, multiple cryptocurrencies connected through an interleger.

It's a more long term view of the impact of cryptocurrencies concerning government issued currencies.

Re: The Cryptocurrency Singularity

#82

Post by BenoitEssiambre »

ramontayag wrote: post #80
BenoitEssiambre wrote: post #73

Earlier quoted context omitted.

I think market forces will make it so that the one that inflates less quickly will be more volatile and the higher risk premium of holding it will make it often less attractive than the one that inflates more quickly but often it also will be the opposite. Like most investments there will be a trade-off of risks vs returns but both currencies will in the long run, be poor investments compared to income generating ass…

This is certainly interesting. Could the same principle be applied to gold which has been fairly stable? I don't think gold is the right medium for the singularity because it is not easy to obtain and subdivide. It needs to be in the the vicinity of choosing the inflated coin on one hand, and the more valuable coin on the right. Perhaps it's this trait that will keep Bitcoin volatile? Because it's easy to go in and o…

Yes it's similar to gold. Gold has some intrinsic value which anchors its price and reduces volatility and as you mentioned it is not as easy to trade which reduces speculation. But even gold is still a fairly volatile investment.

Re: The Cryptocurrency Singularity

#83

Post by kylnew »

ramontayag wrote: post #77
kylnew wrote: post #75

Earlier quoted context omitted.

Yes. I posted my thoughts in another comment > https://news.ycombinator.com/item?id=15184382 Honestly, I'm kind of scared/surprised more people aren't talking about this.

Thanks for the link. I'm not sure where in the article I said inflation is worse than deflation. I don't feel I know enough about economics to express an opinion about this. What I'm trying to say is that if people have a choice, they'll keep their wealth in a currency that destroys their wealth the least slowly. This, I suspect, will have a runaway effect. We probably wouldn't be able to stop it if we tried, which s…

My concern is that you ignore the effects of deflation in your argument altogether, which you simply cannot do.

You are also effectively demoting the US dollar to the current inferior currency of the two to support your little adage, which I find a bit strange.

I believe your intention was just to write a little thought experiment, which is cool. I'm just a little baffled the way some people follow along for the ride without question.

Perhaps obvious, but I hold no cryptocurrency. I'm not saying I never would, but the sheer amount of dreamy speculation like this is exactly what keeps me away from the market.

Re: The Cryptocurrency Singularity

#84

Post by ramontayag »

kylnew wrote: post #83
ramontayag wrote: post #77

Earlier quoted context omitted.

Thanks for the link. I'm not sure where in the article I said inflation is worse than deflation. I don't feel I know enough about economics to express an opinion about this. What I'm trying to say is that if people have a choice, they'll keep their wealth in a currency that destroys their wealth the least slowly. This, I suspect, will have a runaway effect. We probably wouldn't be able to stop it if we tried, which s…

My concern is that you ignore the effects of deflation in your argument altogether, which you simply cannot do. You are also effectively demoting the US dollar to the current inferior currency of the two to support your little adage, which I find a bit strange. I believe your intention was just to write a little thought experiment, which is cool. I'm just a little baffled the way some people follow along for the ride…

By "effects of deflation", are you referring to the claimed ill-effects of deflation, that will grind the economy to a halt? If so, mind helping me understand why I can't disregard that?

I appreciate your replies - not sure if I mentioned it earlier to you, but I posted it here in HN because there is no shortage of smart people willing to express their thoughts.

Re: The Cryptocurrency Singularity

#85

Post by ramontayag »

BenoitEssiambre wrote: post #82
ramontayag wrote: post #80

Earlier quoted context omitted.

This is certainly interesting. Could the same principle be applied to gold which has been fairly stable? I don't think gold is the right medium for the singularity because it is not easy to obtain and subdivide. It needs to be in the the vicinity of choosing the inflated coin on one hand, and the more valuable coin on the right. Perhaps it's this trait that will keep Bitcoin volatile? Because it's easy to go in and o…

Yes it's similar to gold. Gold has some intrinsic value which anchors its price and reduces volatility and as you mentioned it is not as easy to trade which reduces speculation. But even gold is still a fairly volatile investment.

Yes, it may feel volatile, but how volatile is it compared to other currencies? For example, my country's currency fell 10% in the last three months.

Intrinsic value discussion aside (which is its own discussion worth having), I would certainly like to keep more of my money in gold vs my local currency if gold were easy to get and keep. Peter Schiff says goldmoney.com does this, but I'm not interested in owning a certificate.

You bring up a good point though. The closer I imagine ourselves being at the event horizon, the fuzzier the details become. For example, I don't know what "stable enough" is exactly. I guess the question is now, will it ever get close enough to go past the event horizon?

Re: The Cryptocurrency Singularity

#86

Post by BenoitEssiambre »

ramontayag wrote: post #85
BenoitEssiambre wrote: post #82

Earlier quoted context omitted.

Yes it's similar to gold. Gold has some intrinsic value which anchors its price and reduces volatility and as you mentioned it is not as easy to trade which reduces speculation. But even gold is still a fairly volatile investment.

Yes, it may feel volatile, but how volatile is it compared to other currencies? For example, my country's currency fell 10% in the last three months. Intrinsic value discussion aside (which is its own discussion worth having), I would certainly like to keep more of my money in gold vs my local currency if gold were easy to get and keep. Peter Schiff says goldmoney.com does this, but I'm not interested in owning a cer…

The crucial thing is that as you get near this "event horizon" you get close to a point where cryptocurrencies would be macroeconomically destabilizing in the same way gold tied currencies were destabilizing in 1929.

I don't think crypto-currencies will ever get that popular though. It would require governments to be on board and foolishly march towards the 1929 thing again. But you never know, as they say, history rhymes.

Re: The Cryptocurrency Singularity

#87

Post by kylnew »

ramontayag wrote: post #84
kylnew wrote: post #83

Earlier quoted context omitted.

My concern is that you ignore the effects of deflation in your argument altogether, which you simply cannot do. You are also effectively demoting the US dollar to the current inferior currency of the two to support your little adage, which I find a bit strange. I believe your intention was just to write a little thought experiment, which is cool. I'm just a little baffled the way some people follow along for the ride…

By "effects of deflation", are you referring to the claimed ill-effects of deflation, that will grind the economy to a halt? If so, mind helping me understand why I can't disregard that? I appreciate your replies - not sure if I mentioned it earlier to you, but I posted it here in HN because there is no shortage of smart people willing to express their thoughts.

It's a concern I have about deflationary currencies in general. It's not very common in the world right now so you could argue I'm speculating too, really.

You are talking about the singularity being the point that we switch to crypto currency. I suppose my argument is that the singularity may not come because of deflation counteracting and convincing people to continue holding.

All in all I'm glad it's been such a diplomatic discussion. I would engage people the same way if I were you and appreciate that you seek new information.

Re: The Cryptocurrency Singularity

#88

Post by CryptoPunk »

root_axis wrote: post #63
CryptoPunk wrote: post #24

Earlier quoted context omitted.

It's much easier to invest in tokens/securities using ether than using the banking system. The actual trade of ether for tokens happens automatically, and with no barriers of geography or identity. So I think cryptocurrency can definitely be better money than fiat currency. It's programmable, with all control at the edges.

Trading cryptocurrency tokens is not investing, it's speculating in the hopes of making a return on the price increase. Investing is when you spend money to generate useful economic activity in exchange for a fraction of the operation. Trading eth and buying cryptotokens doesn't generate economic activity or give the spender any rights or privileges as it relates to cryptotokens, all it does is perform a direct value…

I think that's an overly ideological take on tokens. There's nothing inherent to tokens that prevents their purchase from being an investment. They can provide a programmatic share of revenues which, if the contract providing that share has been formally verified to be impossible to hack, is even more guaranteed than a legal share provided by contract law.

Moreover, the applications developed as a result of token funding can generate economic activity and increase efficiency. And it's not out of the question that traditional companies will issue security-tokens that provide a legal claim (or perhaps a claim that while not contractually guaranteed, is guaranteed by collateral put up by the firm, and which is held by a larger trusted third party that acts as an adjucator) on the company's underlying assets and revenues, especially in countries that are not well connected to the international financial system and thus have difficulty receiving payments from foreign investors. Token securities could also be an opportunity for smaller companies that have difficulty meeting the regulatory requirements for issuing traditional securities and which operate in countries where issuing such tokens is not illegal.

In any case, this particular contention is somewhat beside the central point I was trying to make, which is that the programmatic and geography/identity-transcending nature of cryptocurrency gives it abilities that traditional currencies don't have, and will obviously find use-cases in an enormous number of applications overtime.

Re: The Cryptocurrency Singularity

#89

Post by ramontayag »

BenoitEssiambre wrote: post #86
ramontayag wrote: post #85

Earlier quoted context omitted.

Yes, it may feel volatile, but how volatile is it compared to other currencies? For example, my country's currency fell 10% in the last three months. Intrinsic value discussion aside (which is its own discussion worth having), I would certainly like to keep more of my money in gold vs my local currency if gold were easy to get and keep. Peter Schiff says goldmoney.com does this, but I'm not interested in owning a cer…

The crucial thing is that as you get near this "event horizon" you get close to a point where cryptocurrencies would be macroeconomically destabilizing in the same way gold tied currencies were destabilizing in 1929. I don't think crypto-currencies will ever get that popular though. It would require governments to be on board and foolishly march towards the 1929 thing again. But you never know, as they say, history r…

BenoitEssiambre, what are your thoughts on http://woobull.com/bitcoin-volatility-will-match-major-fiat-...?

Re: The Cryptocurrency Singularity

#90

Post by ramontayag »

kylnew wrote: post #87
ramontayag wrote: post #84

Earlier quoted context omitted.

By "effects of deflation", are you referring to the claimed ill-effects of deflation, that will grind the economy to a halt? If so, mind helping me understand why I can't disregard that? I appreciate your replies - not sure if I mentioned it earlier to you, but I posted it here in HN because there is no shortage of smart people willing to express their thoughts.

It's a concern I have about deflationary currencies in general. It's not very common in the world right now so you could argue I'm speculating too, really. You are talking about the singularity being the point that we switch to crypto currency. I suppose my argument is that the singularity may not come because of deflation counteracting and convincing people to continue holding. All in all I'm glad it's been such a d…

I understand - I'm not aware of an asset class like bitcoin and the other cryptocurrencies, so I have to go with opinion and extrapolation for a lot of the thinking. :)

It sounds like what you said is that the singularity may not happen because cryptocurrency deflation will make cryptocurrencies more attractive to hold compared to inflationary fiat. I'm fairly certain I understood it wrong.

Won't people move more of the money into deflationary currencies if they are accessible and exchange friction between the inflationary one and deflationary one is acceptable?

I appreciate the appreciation!

Post reply on HN