The only crypto community who has shown any genuine effort in creating a "currency" is Dogecoin. And that is mainly because they are more aware that their coin has no value without real adoption. But sadly, even that has been infested with the pyramid scheme HODLers after the recent surge in value.
Another problem with Eth is that regular folk are thrown off when they hear things like "smart contracts", "NFT" etc.. So, in terms of a realistic crypto "currency" having widespread adoption, it seems hard to justify any of them at the moment.
I love using crypto for payments as it can be incredibly simple when done right. I really hope to see a crypto that works toward distributing wealth and opportunity though rather than the toxic crypto culture of HODlers we see today!
A cashflow producing venture is not a Ponzi since that cashflow is supposed to ensure the returns of all investors.
Recommended reading: Lying for Money: How Legendary Frauds Reveal the Workings of Our World
You are right. It is a ponzi.
Monero is closest to achieving the original cryptocurrency dream. Private and anonymous transactions, good speeds, low fees, ASIC and GPU resistance, committed developers that are actually improving the coin over time, open source wallets even on mobile.
> I think dogecoin is the only one in our current crypto eco-system that has even a fraction of a chance in filling that space.
Why do you say that?
Everything is a pyramid scheme these days including the entire stock market (especially big tech).
But the modern monetary system is designed to sustain such pyramid schemes. It can keep them going forever. No matter how much net value they destroy; it will offload the costs to fiat salary earners who accept fiat currencies.
TBH I'm confused how the world economy is able to keep running at all with all these extreme inefficiencies everywhere.
Smart people look at Bitcoin and Ethereum and think "wow that's inefficient, if the banks raise interest rates, they're going to get wiped out" but they don't realize that most corporations are just as capital inefficient and are in the same position. They are both unprofitable, therefore both worthless... Does it matter that one may be slightly less worthless than the other? The intrinsic market cap (if we had a free market) would be less than 0 in both cases.
Before the pandemic, the Fed tried to wipe out the crypto space by raising interest rates... Then when they realized that their policies were threatening to take out the entire stock market instead, they decided to suddenly drop interest rates back to 0.
It seems like the Fed was trying to find a sweet spot of interest rates which would wipe out all speculative investments but would allow non-speculative investments to stay afloat... They simply didn't anticipate that stocks might be more speculative than crypto.
Whenever I see someone say something like this for some blockchain, I wonder what exactly is exciting for them? Most dapps is about money and more money, I played with Ethereum before (like stress testing nodes), and would really like to know really innovating dapp these days -- I mean tech that solve existing real-world problems, not create new subjects to collect.
If you want an example of one innovation, look at flash loans. Flash loans provide the ability to atomicly borrow infinite money for the duration of a transaction, with no collateral or credit. This money can be used for arbitraging or just to provide working capital for a complex operation. If the loan isn't repaid by the end of the transaction, the whole transaction is cancelled.
Better explanation:
This is the problem currently. There's ten thousand teams building and building, but each one of them is building yet another library or yet another tool. Nobody has any idea how to connect the crypto economy to the real world economy.
The only applications possible are ones that you can do within the cryptospace itself, like lending one crypto against another, or creating some creative gambling game.
Unless somebody can figure out how to bridge the cryptospace to the real world economy, the whole castle of cards will eventually crumble.
There's many applications like DeFiSaver that use flash loans to allow users to migrate debt between lending protocols without needing additional capital.
How about stablecoins and exchanges? This already ties economies.
Have you looked into the Ethereum ecosystem of 2021 by any chance?
Some examples:
- You can use your tokens as collateral, borrow stablecoins and pay off your mortgage while the loan pays itself off from the interest being generated by the collateral - you do not have to pay back the loan => https://alchemix.fi/
- Borrow stablecoins at 0% interest on your collateral => https://liquity.org/
- Musicians managing royalties of their work through NFTs => https://eulerbeats.com/
And there's a lot more.
Or 2 weeks to send a SWIFT.
DeFi has a UX/UI, onboarding and fee problems, but the technology is about 2 years old and has tremendous momentum and already enabling uses cases that reqire jumping through hoops in tradFi.
People invented Chainlink to solve this problem: provide real world data such as "package has arrived to its destination" to smart contract software. I don't think it has delivered on its promise yet.
Look back at Ethereum's history and the vast vast majority of historical projects are dead. People who invested time or money into them have lost out.
What makes it different now?
Social networks, banking and cloud companies would love to hire for those skills.
Also central banks now want to do CBDC (Central Bank Digital Currencies), so skills acquired as dev/builders are and will stay in very high demand for the foreseeable future.
I can put stablecoins (crypto dollars) in a lending protocol like Aave and earn ~10% APY. Compare that to my savings account, which pays out 0.25% APY.
Or how about the stablecoins themselves? MakerDAO creates the Dai stablecoin, backed by crypto-native assets like ETH & BTC.
I have a number of friends in Argentina who are surviving hyper-inflation by keeping their wealth in stablecoins.
People who can make more than 10% trading?
Lending protocols aren't doing anything different than what banks do: allocating inactive capital to those who can make use of that capital and are willing to pay for it.
Interest rates are high because of A: market volatility, professional traders can easily make more than 10%, and B: information asymmetry, large capital pools haven't allocated to these pools.
Lookup what a ponzi scheme is.
I dunno. I mean:
* artificial intelligence -> genuine image search and speech recognition
* self-driving -> Waymo, Tesla
These other hyped technologies have produced real results that I interact with. I'm not really convinced the blockchain has... except decentralized finance. Maybe that's fine.
On the positive side I think there's something like creating wealth through the power of imagination.
I mean 20 years ago there were no crypto currencies. Now on paper they are worth $2trn ($260 a head for the world's population). And lots of people can feel wealthy because they have $100k in bitcoin of whatever. And it can retain actual value in the sense that you can swap it for US$ as long as everyone doesn't sell at the same time. And where has the value come from - basically human imagination thinking the 0s and 1s are worth something. Which may be more sustainable than it sounds. Where does the value of fiat currency come from or the value of a painting in excess of the cost of making a copy of it?
I foresee a future where everyone is a crypto millionaire through the power of imagination. (Which would imply a 10000x form here?!)
Actually wrong.
- David Chaum, 1982, eCash
- Adam Back, 1997, HashCash
- Wei Dai, 1998, b-money
- Nick Szabo, 1998, BitGold
From the taxman knocking at your door. They have prisons you know and some really well armed goons.
They also control the education system and pretty much everything else and are capable of stealing your children from you and send them to die in some far away shore.
They create all kinds of myths and bullshit and we take them for granted... like national identities and currencies.
Pretty powerful system.
Don't even need to pay any fees: https://opentimestamps.org/
It seems to me that with ETH set to be the backbone behind the entire crypto-ecosystem (especially with news like Visa), it will have guaranteed liquidity built into it due to that system.
With any other cryptocurrency, the value seems to only exist from constantly trying to convince people to buy more of it, like a global pump and dump scheme. Bitcoin has such a high price because of brand recognition in that regard.
But branding is the only thing really powering it long term.
Better question would be - "what is NFT". And the answer is JSON file with a hyperlink inside. That is all, literally nothing else is in NFT and no existing legal artifacts are any way related to selling/buying of NFTs.
High gas prices are solved, its just no one really seems to understand or care about the technology.
Just as example, it might cost somewhere between $50-$80 in gas to use OpenSea's "free" NFT minting smart contract. But instead you can already use an L2 solution like Polygon(Matic). I minted 1,000,000 NFTs on Polygon(Matic) just to experiment and the total gas for all 1,000,000 NFTs was less the $0.01 (I think it was $0.00018xxx) and this has the double benefit of buyers normally having to pay the same $50-80 gas fees for an NFT on Ethereum Mainnet to only pay fractions of a cent. OpenSea even has a Polygon(Matic) Beta Marketplace, but funny story maybe after 1hour after my 1,000,000 NFTs were minted I listed them for sale and OpenSea took down the Beta for maintenance for a few hours and when it went back up they removed my NFT and listing entirely from the Marketplace lol.
Enjin is another interesting platform, which I'll begin to experiment with as well because it has built in staking and burning features, but until they adopt a side chain I think it will suffer from the same high gas fees.
Point is the actual tech is there, but it really seems all about the money not the tech, and that's why people are paying high gas fees.
The common folk wants ease of use above anything else. It has to be as easy as sending money via paypal.
No doubt ETH can be the base of that technically, but the model which has ETH holders make money off the appreciation of the ETH token in the process is flawed.
Fortune500 and even startups who'd use the open source ETH blockchain technology to bring many services to the common folk won't ever accept to pay a huge cut to parasitic behavior such as to those hodling or staking.
Also nobody ever mentions how the ETH blockchain is opensource. If a startup of a fortune500 wants to do something about it they have a big chuck of the development cost eliminated just by forking off the ETH blockchain. This is great! But just like Android doesn't owe Linus anything, so those companies will owe nothing to the stakers and the ETH holders.
So to summarize, if you want to build something go to Zug, find Vitalik and give him a big kiss because he saved you a lot of money, at the same time show the middle finger to hodlers and stakers on your way out.
On the other hand...if you want to have a shot at getting rich without doing any work...buy deflationary crypto such as king BTC and watch it appreciate vs the dollar....and it will because people are scared as hell about inflation (regardless of the merit of such scare), and everybody is scared about it...from the common person at the supermarket to Stanley Druckenmiller
To be fair, when I was a 10 year old kid in the nineties, I'd never ever suspect that everyone and their grandma* would be so internet savvy as they are.
* Obviously not all grandparents ;-) But I've seen quite a few grandparents of whom I'd never suspect to use internet services like WhatsApp.
Just like normal folk will never use TCP/IP, know HTML etc?
Nobody needs to know that something runs on a blockchain or how NFTs work. Yes you need to know now but in 10 years my mum will use these things without having any idea what they are. Same as she's using an ipad now without knowing objective C or any underlying protocols and tech.
Sure but she will use the Spotify app or the Sotheby app to buy NFTs
Spotify and Sotheby on the other hand they will not even use a blockchain. Just like Coinbase doesn't use a blockchain
This whole decentralization mania solely work when people are are terribly scared of something: Government diluting their purchasing power via printing money and inflation.
That's a really deeply rooted thing in our brain as governments did that since the stone age. That's the only killer app of decentralization. As shown by the marketcap of king BTC and the success of exchanges like Coinbase and Binance.
NFTs, DeFi...all the other stuff...the user doesn't hate Spotify or Sotheby or the Google Store , but let's say for a moment that it does..well even if the ease of use and fees of DeFi were on par with legacy companies (they are not)...the consumer will always keep using the legacy company product and ask the government to tax them more. So they'd have the best of both worlds: a functioning product and a way to express their hatred
It also makes new things possible, for instance the original artist could get a cut of every resale of his art. People can own parts of art, music etc. Artists can go directly to their fans.
Another example is Defi which also cuts out the middleman. I want to send you 100 usd. I have euro, right now I need to go to my bank app and they will convert for a pretty big fee , they will also take 5 days to send it to you if it's international and god help me if there are holidays involved. With defi I send instantly and I will be able to choose what kind of value I send and you will be able to choose what kind of value you want to receive. I don't even need to know. I could send you euros and you receive in usd, it passes through a defi smart contract on the way without any of us knowing. If I'm a farmer and I have corn futures I could probably pay in that and you would still just get usd. Again cuts out the middleman.
Does it help that it's also censorship resistant and trustless? Yes. The ease of use is not on par with legacy for my mum.. yet. But that was also the case in 1995 with the internet.
Sotheby's was never about the actual transaction, there has historically been little technical barrier in this area - the real barrier has been grift, fakes, and limited market pools. Crypto doesn't solve any of these things, so they will remain the real barrier.
> for instance the original artist could get a cut of every resale of his art. People can own parts of art, music etc. Artists can go directly to their fans.
There is no technical barrier to any of these things now, other than the difficulty of setting up contracts. You can speculate that making the contracts easier to set up will result in lots more of it; but that is a pretty strong assumption that this is the "real" barrier. Like the fine art case, it may well not be. I suspect that in some areas it will result in some interesting things that are low enough value (at least per transaction) that nobody bothered to figure out an agreement on them, particularly across borders. But this has a huge risk of being shut down for being at minimum tax-evasion adjacent, even if useful.
> I could send you euros and you receive in usd, it passes through a defi smart contract on the way without any of us knowing.
This is easily done now by traditional financial transactions, the only problem is the FX risk and transaction fees may be a) higher than you want and b) unpredictable.
Neither of those things are "solved" by using defi, you are basically hoping that the fees are/remain smaller, and possibly handwaving about the FX risk on some future with the underlying is useful to both parties.
The middleman is a social necessity, not solely a technical one. Retail doesn't want the responsibility. Is that simple, so enter the middleman there to absorb risk.
A protocol can't be a middleman. A middleman should be capable of being sued and be the fall guy if something goes wrong. Mostly it should be there to give peace of mind to the customer.
A protocol can't give peace of mind to the customer given that such code can't be read by 99.99999999999% of the population.
The middleman needs to exist to give peace of mind to the customer, and as I said it can't be a protocol. So it can only be a company with a brand, spending millions in Ads to earn the trust of the consumer so that he'd feel confident to put his money in it and in turn can sleep tight at night, knowing that his money are with an institution which is somehow trustworthy.
Nobody in the crypto world ever makes a market study or a revenue projection, or even a survey among the population and users.
People go and build stuff. Projecting themselves into the retail user. The only problem is that the crypto founder is not representative of the retail user, not even one bit. The crypto founder wants the responsibility, wants to kick the the final penalty in the World Cup final or be with the ball in your hands and 2 mins to win the SuperBowl. That is not the mindset of the retail user.
"We ship the products we'd want to buy" as Steve Jobs said in a keynote...only he used it as catchphrase to get the applauses and sell Apple to the world and to Wall Street.
People in crytpo , they do it for real. You never do it for real. You end up with your butt on the ground and nothing to show for financially.
Binance did fork ETH and has built out the Binance Smart Chain. Problem is that is still centralized. The unresolved debate is whether its the code or the network effects that matter.
Oh by the way: Bitcoin is open sourced too. Here's the link! https://github.com/bitcoin
Private blockchain has never made any sense: you just give all your employees private keys and move on with your life.
EDIT: Which is to say, I'm sure a lot of people are saying they're doing it, and it is yet to be for anything more then to say "we're doing blockchain" to investors and the public.
EDIT 2: Reading through the Hyperledger case studies seems to bare this out as well - the implementations are comparatively small, and keep desperately asking the question "was blockchain vital to any of this, or was the actual innovation you just finally automated something into a database?"
Because companies don't really trust each other and have huge legal teams review 100+ pg contracts? Even internally trust is lacking at times?
It does have some efficiencies. They are likely tiny compared to separating money and state, like we managed to separate religion and state.
But I guess its all just buzzwords and speculation! All these people wasting their time on something so obviously useless. You should let them know!!
But that's not the real problem: the real problem is, how can blockchain contribute anything to this problem for them? The process of validating the origin of goods depends on remotely uploading certificates of authenticity - an artifact produced off-chain.
From that point on, nothing else matters - since it all depends on whether that certificate is legitimate, trust is external to the chain.
The rest does not require "blockchain" at all and is actively made more difficult by it - since every other step is just regular logistics tracking, something Walmart is very good at.
Again: what possible benefit is blockchain bringing here? The original artifact is off chain, the goods in question are offchain and the cited benefit is not "improved security" -- it's "quicker look ups". But...that would've been achieved by just scanning barcode numbers into a database at every location (which again: is trust, it's not a fact which is established on-chain).
So yes, I do believe people are wasting their time on something obviously useless - IBM was involved and their biggest contribution to my country was to call 25 million people logging on to do a census on one night a denial of service attack. Walmart executives aren't technical - they need to know "what the blockchain could do" and IBM sells them some snakeoil.
Bitcoin is open source, all right. But the first mover advantage and marketing campaign that it has...well it's insurmountable at this point.
> Problem is that is still centralized
The world doesn't give a damn about that. The only killer app of decentralization as of today is the ability to give people peace of mind that the unit of account they use to store their wealth cannot be tempered with by anybody.
Literally the only application of decentralization was the ability to avoid the ever present threat of money printing because people are scared of inflation and rightfully so. Ever since the stone age people have been diluted by the the central currency authority, it's a fear that is deeply rooted in our brains.
People aren't similarly scared about Paypal or Visa processing their transactions.
Fear is the greatest motivation and fear of inflation is the only thing giving the decentralization thing any market. Everybody , ranging from the supermarket employee to Stanley Druckenmiller...they are all scared as hell about inflation.
And it shows in the marketcap and price of king BTC
BTC gives those 7 billions people a way to express such fears in the market whereas they could only buy Gold, Silver, and Inflation indexed bonds before BTC came about.
Being able to use a tamper-proof currency in financial applications that are decentralized means one's holdings of that currency remain tamper-proof even when they are employing them in financial applications. That is the value that Ethereum's smart contract functionality provides.
Legacy financial applications are fine. People who are afraid of inflation just convert BTC>USD the sole amount they need to use the financial application and that's it.
Also DeFi apps are very illiquid and extremely complicated to use.
Finally let's not hide the truth: 99% of financial apps are based on loans. Crypto loans are doomed because people don't want to borrow crypto as they anticipate huge appreciation and such appreciation would leave them in a hole financially speaking.
Also without an identity system a borrower can just steal crypto, and never pay back interest or principal
Also the lender requires high interest to separate themselves from their crypto considering how novel is the system and how frequent hacks and as I said people outright fleeing are.
The most successful crypto loans are the ones denominated in USD and happening on centralized platforms (and those crypto never leave the platform as they are used to short)
They are not at all. Governments and financial institutions can lock funds, do 'hair cuts', as they did in the European financial crisis, and engage in other such shenanigans. They can debank or otherwise exclude people and companies from the payment system, or refuse them banking services at all.
But really, your statement says it all. This is what anti-Ethereum advocacy amounts to: advocating for the legacy financial system, and the one Satoshi Nakamoto specifically criticized, including in the Bitcoin white paper:
https://www.bitcoin.com/bitcoin.pdf
"Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for nonreversible services. With the possibility of reversal, the need for trust spreads.
Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties can be avoided in person by using physical currency, but no mechanism exists to make payments over a communications channel without a trusted party. What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party. "
>>Also DeFi apps are very illiquid and extremely complicated to use.
Uniswap had $10 billion in trading volume over the last week. That's in the same league as major exchanges like Bitfinex and Kraken. It's also extremely easy to use, with no sign-up/registration required, and a trade being possible with 3 clicks.
All that is signed off and approved by the popultion. In the beginning the nascent financial system which today is labled "legacy" was the wild west as well. Then it was an organic growth of scrutiny because it was demanded by the population. Every megasocial system such as US, EU, China...even North Korea organizes itself based on the population desires.
All those things aren't imposed from above by an omniscent and evil dictator or done in the dark, the Patriot Act is supported by the majority of the population, so it's all the rest.
People accept and embrace the government playing the role of policeman in the financial and capital markets.
You are the fringe minority, and frankly people in the cryptospace lack the pragmatism to understand that they are a fringe minority.
People who are the fringe minority should hide and find holes in the power of the controlling authority and USE THEM AND KEEP THEM TO THEMSELVES opposed to creating mega structures to invite and pursue those who sign off and approve the aforementioned authority. Such attempts will fail because the target demographics is totally onboard with the authority.
> Uniswap had $10 billion in trading volume over the last week. That's in the same league as major exchanges like Bitfinex and Kraken. It's also extremely easy to use, with no sign-up/registration required, and a trade being possible with 3 clicks.
Sure in the ETH ecosystem, tell me again where can I spend ETH or Stablecoins based on ETH? Nowhere.
Same with the central banks that inflate the currency. They are created by the government that the population approves of. You're making a selective argument against the principle of financial self-sovereignty that underlies the entire Bitcoin and cryptocurrency movement, that just happens to lead to a conclusion that decentralized finance is bad, whereas a decentralized currency - bitcoin - is good.
>>Then it was an organic growth of scrutiny because it was demanded by the population. Every megasocial system such as US, EU, China...even North Korea organizes itself based on the population desires.
There is nothing organic about massively complex political systems. They are as artificial/non-organic as anything else produced by modern human civilization. They are nascent forms of human organization susceptible to massive corruption and rent-seeking. Putting all that aside, majority approval does not justify violating people's basic liberties/human-rights, like the right to engage with other consenting adults in mutually voluntary economic interactions. That is true whether you are talking about the US, or North Korea.
>>Such attempts will fail because the target demographics is totally onboard with the authority.
What the majority approves of changes when technology changes. When the social costs of enforcing a particular type of law that limits voluntary interaction massively increases, for example as a result of the advent of widely accessible strong encryption, then the majority will become more opposed to enforcing such laws.
>>Sure in the ETH ecosystem
ETH-based assets will gain mass-adoption soon enough. And when they do, your final plausibly pro-crypto objection to DeFi will have disappeared. All you'll be left with is the argument that cryptocurrency, as a whole, is bad for society, by enabling non-compliance with politically enacted forms of centralized gatekeeping.
At that point, it will be even more obvious now that an argument against decentralized finance is an argument against the entire principle that Bitcoin is based on, and was created to advance.
The fed is non elected. there is a separation between Govt and the Fed
Public cannot vote on the Fed Fund Rate
In my experience the common folk want number go up above anything else.
You should google "NFT".
Nothing..they won't even have to pay because the project is opensource.
They can solely focus on ease of use and marketing which is what proper companies do best and just take the technical part without any compensation.
This is also the reason why Larry Page is among the richest men in the world and Linux' Linus is a nobody who is only known and relevant among nerds
It's as saying if Facebook released all of its code then suddenly it would get competition. It wouldn't.
There's the whole infrastructure behind it: thousands of nodes running the blockchain, thousands of applications running on it, developers in this sphere are very scarce because it's so complicated. If you wanted to try to create yet another "Ethereum killer", you would also need to convince developers to write apps on your chain, and people to run the nodes.
By the way, to say that Linus Torvalds is a nobody is a ridiculous thing. His net worth is humongous to begin with.
Are those things really needed to ...you know commercially sell the product to the public, give them ease of use and make money in the process?
Because if we must ride the blockchain thing for Venture Capital funding or to look hip among the public on twitter...well we can stick an ethereum logo on it and invite Vitalik to the company podcast.
It's much easier and accomplishes the goal in much more straightforward manner.
My personal favorite is Sorare, which combines NFT collectibles with fantasy soccer. And sure, right now everything suffers from high gas prices but it looks like that might be solved over the next 12 months