I'm the oppsite, and I'm not a btc maximalist. I'm not going to make any predicitons about the price direction of either coin, I'm mainly surprised by eth's huge rise. there's some risk with the eth2 / PoS migration, though it comes with a huge benefit. would someone mind explaining the technical risk? i'm not that well versed in it, maybe i'm overstating it (the market is obviously bullish about it). without it, smart contracts are borderline unusable.

eth also has a big target on its back, a lot of the top coins are going after the smart contract space, mainly the centralized bootleg garbage called binance chain, which unfortunately does fill a market need, at least to less discerning "investors." to my detriment, i haven't touched it.

in contrast to eth, i'm not surprised about btc's rise. it does one thing and it does it well. it seems to work well as a hedge against inflation. i don't think that many people care about the environmental impact. it's not immediately visible, at least not like cars and other polluters. it's out of sight and out of mind.

The proof of stake ETH2 chain is already live for Ethereum and has been since December. That chain is parallel to the existing proof of work chain. They now need to merge the POW chain into the ETH2 validator nodes so they can conduct consensus from there on. The merge has been simulated already and is being tested. Core devs seem to be confident it will be feasible with low risk. But of course, there's always a chance something goes wrong.

For more info check out this beautiful site: https://ethmerge.com/

It's one thing for it to be live, it's another thing for it to be stress tested in actual production/real world with people's actual money.

I have a vested interest in hoping it lands successfully, but being a software engineer, I know how many bugs I've had even in simple programs, I can only imagine the kinds of bugs that will be discovered in eth2 considering just how complex it is.

Don't worry. If anything goes wrong (like a hacker stealing everybody's coins), they can just rollback the transaction. That's not a new thing for ethereum, to just rollback transactions. Lol.

For the uninitiated read about the dao hack and the debate that ensued. Basically, they just rolled back the transaction, just like a bank.

You're mixing up two different issues. One is a bug in the implementation of Ethereum, the other is a bug in a smart contract (that runs on Ethereum).

Undoing the former by rolling back the chain and fixing the bug is the only logical thing to do. Bitcoin devs have done the same a couple of times (e.g. [1]).

The DAO hack, however, was not caused by a bug in Ethereum. It was caused by a bug in the code of a smart contract. Ethereum executed this smart contract faithfully (there was no bug in Ethereum). Bitcoin has never done this.

[1] https://en.bitcoin.it/wiki/Value_overflow_incident

As someone else said, it's in production. Also, there are many, many forks of the EVM in production that run on proof of stake mechanics (Polygon, Binance Smart Chain, Skale, Qtum, xDai, etc). The main thing you have to worry about with move to ETH2 is contentious forks of the main chain, like if POW miners revolt and start a fork or a blip at the merge point that takes the chain offline for a bit. The ongoing ETH2 consensus and validation mechanic is live already. ETH2 also has client diversity, with 4 different implementations written in four different programming languages (Rust, Go, etc). There is some world class talent on the ETH core team. I have full faith in them and their testing regiment. But of course there is no such thing as risk-free.

It's not really in production until the value of Ether tokens is protected by it. When that happens it will be potentially profitable to hack it. Right now only Ethereum supporters are testing the network, not Ethereum antagonists (black/gray hats).

The proof of stake chain is running in production with $16B staked in it.

>hedge against inflation

If an asset is an inflation hedge and it goes up faster than inflation, there is a risk that it will go down eventually to match the inflation rate. This is true for gold. Pretty much nobody believes this for Bitcoin, everyone expects Bitcoin to exceed inflation over the long term.

Even if you ignore the above in general Bitcoin is a poor asset (downgrade from hedge) against inflation because it doesn't care about inflation. It's highly volatile which means it can go down while inflation is going up, which is the exact opposite of what you want from an inflation hedge.

The crypto market is so big now that it's hard to imagine enough new money to make prices go up anymore. How does anyone justify these obscure tokens and coins being worth billions.

> How does anyone justify these obscure tokens and coins being worth billions.

The Greater Fool Theory. This stops working when you run out of fools, but the notion of "there's another sucker born every minute" probably keeps the ball rolling for a while.

Sure, but I thought there could be no more greater fools in 2013, and again in 2017.

It is shocking how many fools exist.

In 2017/18 the "smart" money was early into ICOs and the "fools" are just getting into those over the past year. Meanwhile the "smart" money has moved on to DeFi and all that nonsense - DeX, yield farming (ponzi scheming), flash loans, etc. The next cycle you'll see smart money move onto something else, and they'll have figured out how to repackage DeFi to the average fool, which will come with greater linkages to the inherent financial systems.

What made the GFC such a massive bubble was how much the financial system was woven into Mortgages/CDOs. Crypto is not there yet, right now it could pop and you'd hear a few regretful stories and friends who lost a few hundred on the "Doge", but it wouldn't be a widespread disaster. Once you start seeing apps utilizing DeFi to enable average "fools" to purchase equities, fund home/auto/college loans etc that will signal a bubble with vicious potential.

Dogecoin purchases via Robinhood is probably the easiest we have right now to getting the average fool to trade their currency for memes, but that's still a small subset of gambling.

> yield farming (ponzi scheming)

There are a lot of ponzi scehemes in cryptocurrency markets, but you will have to expand on why you think yield farming is one of them.

The typical yield farming scenario is that users provide liquidity to AMM pools in exchange for LP tokens and accumulate trading fees on the pair while they HODL. The LP tokens themselves can often be staked on the DEX in exchange for governance tokens on that DEX (which may have other utility on the DEX as well).

Where is the ponzi scheme in this scenario?

Maybe it isn't a ponzi scheme (I'm no expert) but even after looking up all the acronyms (and maybe especially after looking them up) this sounds like an episode of Schitt's Creek.

But let me try to actually understand.

You provide liquidity to a pool in exchange for a token and accumulate trading fees, while maintaining ownership of your capital.

Ok, first of all this sounds like a bank. But it's decentralized? So what happens when someone has a majority of governance tokens on your DEX?

Yes, correct. First of all, you'd probably DYOR and ensure that the governance tokens at least have the appearance of being community owned rather than centralised, and secondly you'd probably need to ask yourself what having majority voting power on a governance token really offers. It's like shareholder voting power (which is typically held by a majority or a few majority stakeholders), you probably don't want to vote for something if it's going to throw all your other investors under the bus.

Stepping back from that, you need to understand that initially you're dealing with smart contracts. The governors can't fundamentally change the underlying aspects of the contract.

So let's say, "worst case scenario", the governors could decide to reduce the emissions rate of governance tokens on the staking pools you're interested in. Well, they haven't fundamentally changed the underlying contract, you can still unstake your LP token from the farming contract, withdraw your liquidity from the pool and end up with (some combination of) your original capital + any fees you earned over that time (impermanent loss is a topic for another conversation).

Actually as to my observation it's the same fools again every time, plus some new fools, with ever-deeper pockets.

This streak will break not when the maximum number of fools has been reached, but when the fools with the biggest wallets have gotten involved.

At some point would you not agree that there is a probability that you’re the greater fool here by dismissing the entire field?

> How does anyone justify these obscure tokens and coins being worth billions.

You might be misinterpreting market cap of coins.

Simple example:

- I create a new crypto called CRY

- I create 1 million CRY coins

- I have converted zero CRY coins to USD

- I sell 1 CRY coin for $1

- The market cap for all coins is now $1M

It's called leverage, unfortunately too many exchanges offer way too high leverage to people who might not fully understand what they are doing.

Right: https://www.binance.com/en/support/articles/360033162192

Uh, for most of these "obscure tokens" you can't get that kind of leverage. SHIB or SAFEMOON or w/e was worth billions before it was ever even listed on Binance.

nearly 10B in longs were liquidated on April 17th, exchanges give everyone way too much leverage with the tap of a couple screens

Retailer frenzy on top of a new technology alien enough that people don't understand it. If you think these coins are all there is, just wait until you see the thousands of meme coins that never took off.

Also keep in mind that these coins crash with very small amounts of money. The liquidity just isn't there.

The tether printer can print as much as they want.

I'm sorry, tether is fully backed by seriously real US dollars. I mean they released a pie chart and everything.

US YoY inflation was 4.2% last month with another $6 trillion in proposed spending. Alternatives to bitcoin are looking weak as well

I have the opposite take. In bull runs, the market swings between BTC and altcoins. Dogecoin rise unintentionally benefits ETH. It weakened Bitcoin but strengthens Dogecoin and Ethereum. With this crash, people will realize that BTC is the crypto that matters. BTC runs the market. The FUD will cause people to flock to BTC. But that's just a guess. Anything can happen in crypto.

The top never feels like the top for people buying in. That applies to both Bitcoin and Ethereum.

I thought SHIB was dead because Vitalik gave it the rugpull?

The charity he donated to is going to liquidate it over time to protect the community. It's ridiculous.

https://twitter.com/CryptoRelief_/status/1392559057764962304

That protects nothing. Constant sustained selling pressure drives something down just as well as someone dumping. In a way it’s worse because it’s certain and there is no room for hope of a quick recovery like in a crash

this is why in finance the most obvious or intuitive prediction or outcome is often the wrong one. "omg..he sold his stock/crypto/token etc., therefore it must fall a lot!"

He should have just sold thee shib, convert to $, and cut the check. Too much of charity these days feels like moving assets around and money instead of donating. That is why the UBI is so popular, because it gives the money to the people instead of middlemen, bureaucrats, admins, and money changers.

Taxes!

it's still roughly 3-4x higher than what it was just a week ago

From the charts I'm looking at (market watch), it appears that other cryptos have lost more than bitcoin, by percentage. Am I incorrect?

Quite right. The alt-coin market is notoriously volatile even by crypto market standards, and not something i follow close enough to give a strong analysis on.

Coinbase's weekly losses chart[0] captures some of what i hoped to express in my parent comment. Bitcoin is interesting because in a way, it hasn't so much lost value lately as not risen with the market the last couple of weeks.

0: https://www.coinbase.com/price/s/top-losers?resolution=week

Yes, others have, but interestingly, Cardano (ADA) held up well. Even though it dipped, it's still up 20% over the past week and is #4 by market cap.

Cardano is actually more subtle than that: it simultaneously tanked because of the whole BTC thing but it also got good (and clearly carefully coordinated) press as a “greener” alternative to BTC as a result of the self-same crash, which boosted its price.

Just keep in mind that those who move to the coins that pump during a dump tend to put stop losses. So these coins end up dumping harder later on.

I think people are switching to Cardano because it has lower environmental impact (proof of stake) than others. The Tesla announcement was about the environmental cost of Bitcoin after all.

I'd say this observation might be correct, on the basis that the Tesla announcement also sent the lesser-known NANO currency up by about 60-80%, which uses PoS as well.

If you're referring to their comment "the major losses in this crash were Bitcoin, Doge and Shiba", they are most likely picking that list by market cap (though I did not try to crosscheck).

AFAIK none of these currencies have anything resembling fundamentals. Is predicting swings done by watching chatter on reddit?

This is mostly true, but a number of tokens actually do generate an income in the form of fees, inflation rewards, or a combination of the 2. For example, ETH can earn staking rewards, and post ETH2 merge, will also earn transaction fee revenue. A number of the dexes generate trading fees that get distributed to token holders (giving P/E ratios that are high, but not absolute insanity given they are "growth" stocks).

It's fascinating watching the narratives unfold and affecting the price. Bitcoin is the bad guy today, until bitcoin holders just buy up the new liquidity and it starts going up again. Then the narrative will change again.

> While the market in general is down, the major losses in this crash were Bitcoin, Doge and Shiba. Bitcoin is an obvious result given the news. Doge and Shiba have had pretty spectacular gains over the last ~30d and seeing them lose considerable value is unsurprising if you follow crypto markets much.

the interesting thing is that all those 3 coin crashes were again due to Elon Musk. He has been spreading the FUD all this time. I wonder how influencing markets is legal.

Pump and dump schemes are illegal for the stock market. These regulations don’t apply to cryptocurrencies.