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The Non-Innovation of Cryptocurrency

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Re: The Non-Innovation of Cryptocurrency

#81

Post by lottin »

mattdesl wrote: post #76
lmm wrote: post #46

Earlier quoted context omitted.

Append-only, log-structured datastores are useful; Merkle trees are useful; bitcoin did not invent these things though it has helped popularise them. PoW is the one unique innovation that makes bitcoin bitcoin, and I think the last 12 years have shown that its legitimate use cases are niche at best.

I would largely agree that the use cases are niche at the moment. For example, enabling ownership of a domain name without requiring the trust of a central party. It may be worth noting, Ethereum has only been around for 6 years, and prior to it there was not a lot of focus in the blockchain space on ownerless program execution and immutable state (smart contracts).

Notice that blockchains have no notion of property rights. As far as the blockchain is concerned whoever controls the asset (i.e. has the password to the wallet) owns it. For example, if the owner loses the password, or has the password stolen, they no longer own the asset. This is a big problem. Imagine that if when someone stole your car they automatically owned it! The lack of property rights is one of the reasons blockchains are not suitable for almost anything.

Re: The Non-Innovation of Cryptocurrency

#82

Post by RandomLensman »

dkshdkjshdk wrote: post #80
RandomLensman wrote: post #66

Earlier quoted context omitted.

1) Granted, but also EURUSD pricing does not work like any AMM (i.e. not formulaic exchange rates). So right now this does not work from both sides (no place to do and no method to do it). And no, it will not change to formulaic unless you have insane amount so liquidity in (but even then, central banks could just steam roll over you) 2) Lending can be regulated, so might or might not be ok for you to lend - not a la…

> 1) Granted, but also EURUSD pricing does not work like any AMM [...] Exactly. So, if I want to put liquidity in EURUSD market, I have no choice but to actively manage it, since traditional financial institutions won't do it for me. That was my point... to bring up examples of use-cases that are not covered by traditional financial institutions. > 2) Lending can be regulated, so might or might not be ok for you to l…

On EURUSD, you could look at currency funds (not strictly the same, but as close as it gets)

Depending on which country you are in, things like bitcoin savings accounts are starting to emerge. Also funds might be able to invest.

And yes, traditional finance is starting to see value in providing services for these things (and has so for a while) - not strictly the same as seeing value in the underlyings, but separate point

Re: The Non-Innovation of Cryptocurrency

#83

Post by [deleted] »

skohan wrote: post #73
neolog wrote: post #69

Earlier quoted context omitted.

Why not? https://en.wikipedia.org/wiki/Blockchain

> The blockchain was invented by a person (or group of people) using the name Satoshi Nakamoto in 2008 > Git was created by Linus Torvalds in 2005 for development of the Linux kernel They use similar data structures, but blockchain is more than a Merkel tree, it also includes a consensus algorithm.

[deleted]

Re: The Non-Innovation of Cryptocurrency

#84

Post by mattdesl »

skohan wrote: post #65
mattdesl wrote: post #49

Earlier quoted context omitted.

I would point to Hicetnunc as one example[1], which provides real value for many artists on the platform. I’m sure it’s possible to build a similar platform with a central database handling transactions and Stripe payouts, but I’m not sure it would be met with the same enthusiasm (and, despite the possibility of this with past tech, no pre-blockchain digital art marketplace has come close to meeting it in sales). Due…

So I would agree that this marketplace is creating profit for artists. Whether there is real value creation happening I would consider debatable. NFT's themselves are a highly speculative asset, and I would not count on this marketplace continuing to grow and thrive a decade from now. In other words, a lot of people probably made a very good profit operating tulip markets in Holland in the 1600's, but that doesn't me…

That’s an interesting argument. What defines “value” in your mind? The platform brings value to artists (financial freedom to create more art), value to collectors (digital ownership over a scarce conceptual artwork), and value to the art world (more digital art being created by a more diverse group of people).

Not all may agree with these values, and perhaps this platform and it’s tokens will not persist after some years, but I’m not sure that means the project does not currently provide value to those participating in it.

Because “NFTs are dead” (according to the media) we have hopefully past the moment of tulip mania. But perhaps it will really take some more months or years for this to truly “die” — during which time the artists have a viable marketplace to distribute their art and earn revenue on it, where no prior option existed for them. Or, perhaps it will not die so quickly, if enough people continue to see value in collecting and supporting digital artists in this way. Time will tell.

Re: The Non-Innovation of Cryptocurrency

#85

Post by creshal »

neolog wrote: post #64
skohan wrote: post #31

Earlier quoted context omitted.

But this is a totally abstract argument. Can you point to a tangible example of blockchain being used to solve a real societal problem, in a way which is competitive with other, more conventional solutions?

The "Git" application is a blockchain for decentralized management of the Linux kernel source code. The "Bitcoin" application is a tool useful for buying and selling recreational drugs without exposure to the physical risk posed by cash transactions. Edit: That is, the physical/financial risk posed to you by the other party or third-party robbers. Legal risk is probably also reduced: law-enforcement deanonymization a…

Git is not a blockchain, there's no distributed consensus algorithm. The consensus on what's the main branch and what's the authoritative history lies with Linus Torvalds.

> The "Bitcoin" application is a tool useful for buying and selling recreational drugs without exposure to the physical risk posed by cash transactions.

It hasn't been since at least 2018; authorities regularly seize millions worth of bitcoins together with drug dealers, and have been openly bragging about their de-anonymization successes as early as 2019.

Re: The Non-Innovation of Cryptocurrency

#86

Post by dkshdkjshdk »

skohan wrote: post #77
dkshdkjshdk wrote: post #71

Earlier quoted context omitted.

Regarding point 2, what's wrong with assuming that 1 BTC is worth 1 BTC now and forever? If I'm not trading asset A for asset B, then it's hardly "speculation". If it makes it any better, I can lend BTC and ask to get returns in USDC (which should be worth as much as 1 USD, if you trust Coinbase). Am I still speculating? Regarding point 3, where is the speculation, exactly? If, at any point, the BTC I left as collate…

> what's wrong with assuming that 1 BTC is worth 1 BTC now and forever? Because if 1 BTC = 0 USD, and has no real-world utility outside of speculation, there is no compelling reason to try to acquire more BTC.

> Because if 1 BTC = 0 USD...

A big assumption here. I can also hypothesize that 1 USD = 0 EUR, at some point in the future, and, thus, holding or buying USD is pure speculation and there is no compelling reason to try to acquire more USD.

Under this logic, I shouldn't ever buy or hold anything (forex, stocks, etc.), lest its market value goes to zero.

Also, thanks for ignoring the rest of my point: What if I choose to get my returns in some asset that is pegged to USD (e.g. DAI, USDC), am I still speculating on the value of BTC?

Re: The Non-Innovation of Cryptocurrency

#87

Post by intev »

skohan wrote: post #62
dkshdkjshdk wrote: post #52

Earlier quoted context omitted.

I'll bite the bullet and assume that you're asking a legitimate question in good faith: 1) Imagine I have 100 USD and 100 EUR and I want to provide liquidity to a USD-EUR pair to get a cut of exchange fees. Which automated market maker do I need to contact in the space of "conventional financial technologies" to do so? 2) Imagine I have 1 BTC and I want to lend it (in a secure way) to get some return (in BTC). Who sh…

I would agree that case 1 constitutes a potentially interesting use of block-chain. 2 and 3 assume the value of BTC, which I would not take as a given.

Since you seem to be arguing in good faith I'll engage; at which point will you accept that the value of BTC is > $0? It's coming up on a decade of showing seemingly limitless upside with the bottom constantly rising. The tulip mania everyone loves to cite lasted about 3 years. This is going on for more than 3x. At what point would you consider you are maybe wrong?

Personally speaking, I was on the other side of this until about 3 years ago. I first learned about crypto in 2011. At one point I realized I was not looking at the facts unfolding right in front of me. I was just telling myself "look everyone are idiots, and everyone is going to crash and burn because of this. This makes no sense." Then I realized smarter and smarter people were getting in and more and more people were getting convinced and either I benefit from this or I become the person on the sidelines left behind.

Re: The Non-Innovation of Cryptocurrency

#88

Post by dkshdkjshdk »

RandomLensman wrote: post #82
dkshdkjshdk wrote: post #80

Earlier quoted context omitted.

> 1) Granted, but also EURUSD pricing does not work like any AMM [...] Exactly. So, if I want to put liquidity in EURUSD market, I have no choice but to actively manage it, since traditional financial institutions won't do it for me. That was my point... to bring up examples of use-cases that are not covered by traditional financial institutions. > 2) Lending can be regulated, so might or might not be ok for you to l…

On EURUSD, you could look at currency funds (not strictly the same, but as close as it gets) Depending on which country you are in, things like bitcoin savings accounts are starting to emerge. Also funds might be able to invest. And yes, traditional finance is starting to see value in providing services for these things (and has so for a while) - not strictly the same as seeing value in the underlyings, but separate…

Ok. So... if even traditional finance is slowly adopting these things, it kind of becomes hard to hold on to the idea that there aren't actually any use-cases outside of crime and speculation.

EDIT: Just to address your edit...

> On EURUSD, you could look at currency funds (not strictly the same, but as close as it gets)

And will they be willing to talk to a person that only wants to put 100 EUR + 100 USD into it? I seriously doubt it.

Re: The Non-Innovation of Cryptocurrency

#89

Post by elisbce »

skohan wrote: post #14
mattdesl wrote: post #9

Blockchains and crypto tech does seem to provide solutions to many challenging problems: distributed ledgers, immutable and decentralized data, ownerless contracts and program execution, secure and decentralized ownership of a digital asset (eg: owning a domain name), programmable free markets, preventing the double spend problem, etc. These may not be problems the author is interested in, but it does not mean the te…

Can you name an example of a tangible use-case where a blockchain has been used to create real value, and is competitive against conventional technologies in the same space? There has been a lot of talk about the potential of blockchain, but so far all I have seen it used for is crime and speculation. Would love to be shown I'm wrong on this.

Let me give you a real-world example. China has a tight control over not only the currency exchange rate, but also the very action of exchanging or even withdrawing foreign currencies. The current policy is that you can only send/receive $50k USD per year per person regardless of the channels, even if they are completely legitimate via wire transfers. This is obviously not enough for a student who goes to the US for college. And this creates a huge difficulty for the families. Bitcoin is one of the main ways to break this barrier even though it is deemed "illegal" in China. You can say this is a "crime", but the legality is actually a very subjective thing depending how you look at it.

Re: The Non-Innovation of Cryptocurrency

#90

Post by Marazan »

dkshdkjshdk wrote: post #75
Marazan wrote: post #61

Earlier quoted context omitted.

Two of your 3 problems solved by Bitcoin only exist because you have Bitcoin.

Yes... and? Are people that have Bitcoin not allowed to do useful things with what they have? Does it bother you that there are actual legitimate use-cases for these things (as you seemingly admit, by not including my first example in your comment)? Someone asked for an example, and I provided a few... perhaps you don't see value in the examples I gave, but there are people out there who do.

To the question "What problem does Bitcoin solve" the answer "Without Bitcoin I would not be able to transact in Bitcoin" is not valid.
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