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Vitalik Buterin on Cryptoeconomics and Markets in Everything
- TekMol 8y agoPopups, dickbars ... it's amazing that Medium can retain users. I am so driven away by this user-hostile behaviour. I would never ever put anything on Medium.
- weavie 8y agohttps://alisdair.mcdiarmid.org/kill-sticky-headers/ https://alisdair.mcdiarmid.org/kill-sticky-headers/
- tboyd47 8y ago> Don’t people trust ether and Ethereum in part because they trust you? In a sense, there’s this Russian tradition of holy men who come along — Dostoyevsky’s Alyosha, Prince Myshkin — like a non-evil Rasputin... > ...I try to make myself maximally accessible in a bunch of ways, try to bring different people in different communities together, perform a kind of social coordination function, which is probably, from an economist’s point of view, similar to some aspects of management, but without the aspects of management that evoke images of centralized control in all those different things... Question dodge level 9000.
- willio58 8y agoIs that a question dodge? I mean he's in the unique position that people do trust Ethereum in part because of him, but he really wants people to trust in the protocol and its evolution over just himself. Personally, if Vitalik wasn't involved in Ethereum I probably wouldn't have been as interested in the project initially. But, for Ethereum to really take off in the public realm, the cryptocurrency and its creator need to be decoupled more. And I think this response from Vitalik gets this point across.
- oh_sigh 8y agoWhat was Vitalik known for before Ethereum? He is still quite young, how much did he do before Ethereum?
- ehrtt 8y agoHe started Bitcoin Magazine when he was 18, I think.
- ruiquelhas 8y agoI tried to promote some quantum computer scam as well, IIRC.
- ruiquelhas 8y ago*He
- tboyd47 8y agoYeah, maybe he's still decoupling himself from the leadership function, but he goes about saying that in kind of a roundabout way.
- tCfD 8y agoSounds like he's still fine tuning his acceptance speech for the lifetime achievement award from The Center For Decentralization
- thinkmassive 8y agoyou replaced significant parts of his response with an ellipsis
- blanderman 8y agoIs there anyone that has significant influence over Vitalik and/or his family that might benefit from Ethereum having value?
- drcode 8y agoThis is an interview between one of the most important economists and most important computer scientists alive today. Even if you disagree with my assessment (and I'm sure many on HN will be more than happy to do so) I think you will find at least some interesting tidbits in this podcast that will make it worth your time to listen.
- justicezyx 8y agoOne of the most important computer scientist is a wrong statement. He is not a computer scientist. And he is different than one. He should be called crypyoecononomy architect. Computer scientist requires a lot of more work in research and development, and at the same time he has done a lot more work that is outside of the computer scientist scope.
- drcode 8y agoI don't really think there's an ideal term to describe his skill set, but I think it's reasonable to consider him a scientist that works with computers, in the broad sense. (and certainly he has a ton of traditional CS skills and has personally authored lots of software at this point, including the vyper programming language and pybitcointools)
- darawk 8y agoIt seems to me that he's advancing the research frontier in an area of computer science. Whether or not he has a PhD seems pretty irrelevant to that.
- relyio 8y agoHe is a Computer scientist by any reasonable metric.
- davidw 8y agoIs Tyler Cowen an important economist in terms of his work, or one who is important because he's visible and writes a lot? To be honest, while I think he's a very bright person, I have kind of tired of what feels to me like a contrarian "shtick". I kind of prefer his co-blogger Tabarrok's writings in that he's pretty much a straight up libertarian. Some things I disagree with, but it just seems a bit more direct.
- replies_to_all 8y agoGreat people, great interview :) The big bubble will come with tokenization of securities then, with distributed ownership of all this stuff, the liquidity of essentially all assets will go exponential (for a short time). Vitalik is just thinking that through and sees that once stuff like every single loaf of bread can be tokenized with an RFID tag the price will be able to float, in times of high demand, the price of a loaf will rise, and say, late Sunday nights, loaf prices will drop and anyone will be able to see it in real time.
- raintrees 8y agoConversations With Tyler is a podcast I greatly look forward to - I have learned quite a bit from people I might not have paid much attention to going about my typical hi-tech lifestyle, and for that I feel enriched and am thankful.
- lavrov 8y agoMaybe I'm just being cynical (or jealous!), but when I read "Vitalik Buterin, who has managed to synthesize insights across those fields into successful, real-world applications like Ethereum", I think it's worth asking what qualifies as successful, because to me, the inflated market cap of a speculative asset isn't an objective measure. I think that Ethereum's market cap has perhaps created an unearned reputation for solving an essential problem (running any verified, distributed computation) and being the best solution to large-scale verifiable computation, when I would argue that verifying a computation in a distributed system by having each node (or some large subset of nodes, if sharded) perform every step of every computation is not an optimal solution.
- fullshark 8y agoMoney. A few engineers are impressed by the technology but most people are excited by the money and prospect of a lot more money in the future. That's what drives crypto fanatics instead of trying to generate value and that's why I think it will ultimately fail.
- thinkmassive 8y agoWhat's going to fail? Crypto fanatics? Cryptographically-secured trustless distributed systems? All of cryptography?
- fullshark 8y agoThe Ethereum ecosystem and its derivative coins will not gain adoption among anyone except a passionate sub cult which will eventually go to zero.
- blocked_again 8y agoSimilar statements were made about the computer and Internet as well.
- 8y ago
- thisisit 8y agoo how would you describe how you teach yourself economics? VITALIK BUTERIN: I guess it involves a combination of things. Some of it is reading what various economists on the internet say. Some of it is reading papers. Sometimes, if I want to dig into some topic more deeply, I end up reading books, like I read one on urban transportation economics a while back. One of the things people need to realize is that you can't learn economies or behavioral science by reading. Sure you know concepts but unless you have implemented and gone through a full economical cycle, what you have in hand in terms of knowledge is just hypothesis - not actual facts. Every downturn has upended what people previously known about depression. And same goes for upturns. Sure, there are analysis after the fact but nothing in-between the cycles. Additionally, I remember Buterin quoting Debt: The First 5,000 Years as gospel truth of economies. While the book is good and provides one perspective of looking at things it is not the whole and sole of the theory. So, I really doubt Buterin's knowledge on economics. Before someone asks, I don't doubt his understanding on cryptocurrencies. And frankly, this whole learning by reading is good for foundations. But I see many people in crypto field jumping to release a, let's say voting blockchain, because they read some papers/books on voting. And then they release an ICO to test their theoretical knowledge. This doesn't help anyone. To paraphrase Matt Levine on Bloomberg, cryptocurrencies seems to be learning about every mistake made earlier. Just on a bigger and faster.
- DennisP 8y agoI don't think the design of an auction or a voting system has all that much to do with economic cycles.
- why-el 8y agoThere are a myriad of books that discuss the theory AND provide a critical view of how it failed/succeeded, essentially providing you with a historical reading. To the extend that you can corroborate these findings, you should be all set. I am not sure that your dichotomy is accurate.
- Shorel 8y agoGiven the actual results and insights provided by economists, I doubt anyone's knowledge on economics. Question one: is there any successful economy that doesn't require endless population growth?
- lavrov 8y agoWhen discussing how crypto-assets should be valued: > In that case, you can take the simple model and say a cryptocurrency’s valuation is the net present value of the transaction fees that it’s getting. This, by itself, surprisingly does give fairly decent valuations. > For example, Ethereum’s transaction fees tend to be about $500,000 a day recently, which is about $180 million a year. If you tried to value the ether market cap as some kind of corporation, then the “P/E ratio” is only somewhere in the low 200s, which is high for a company, but not off-the-charts absurdly high. Isn't this completely circular? He's saying that the value of the transaction fees per year measured in dollars equates to some reasonable fraction of the market cap measured in dollars... but wouldn't this be true if the market cap were much higher or much lower? It's just a comparison of the total supply to the amount being circulated, rather than a substantive claim about how each token (or the market cap) should be valued in dollars.
- lavrov 8y agoFor example, if the market cap were 1/100 of its current value, then the transaction fees per year, denominated in dollars, would be $1800000, yielding the same "P/E" multiple, and justifying the valuation at 1/100 the current market cap.
- tlrobinson 8y agoIf people are paying transaction fees in exchange for some real utility then you'd expect them to pay the same dollar amount for them even if the price went up or down (ignoring second-order effects like increased trading activity). That's a big "if" though. I'm not sure what portion of transactions are related to trading/speculation vs. something more useful.
- lavrov 8y agoSure, I'm assuming that most of the transactions are trading/speculation, given that 60% of ETH is held on exchanges, and if the question is how we should value ETH, a measure that depends on the current market value of ETH seems flawed. Plus, the base transaction amount is denominated in ETH: .00042, and is fixed (though I think that the gas conversion changes?).
- bhaak 8y ago> What are things that you can do with blockchains that you can do only with more difficulty without them? It's nice to see one of the most important figures in cryptocurrencies state plainly that cryptocurrencies aren't solving problems that have been impossible to solve before.
- a_tractor 8y agoIs he saying that? He is just describing the identification of areas where cryptocurrency provides greater efficiency, not saying that it doesn't do anything else... Still, I agree it is good he acknowledges/emphasizes that question.
- snarfybarfy 8y agoI'm not an economist myself but Vitaliks reasoning in regards to valueing cryptos seems unsound: For example, Ethereum’s transaction fees tend to be about $500,000 a day recently, which is about $180 million a year. If you tried to value the ether market cap as some kind of corporation, then the “P/E ratio” is only somewhere in the low 200s, which is high for a company, but not off-the-charts absurdly high. Those transaction fees are revenues and NOT earnings. I have no idea how profitable ETH mining is but earnings are going to be significantly less after including operating costs (hardware and energy mostly). Also being somewhat new and still unproven, I would add a hefty risk premium to the discount factor. All in all I would say that a P/E of 50 would be optimistic and dependant on getting a lot more transaction throughput. Based on that you could argue that ETH is currently overvalued by a factor of maybe 10-30. There’s also this model of store of value, where people hold it because they expect more people to hold it in the future, and because people keep getting richer and the population keeps growing. As long as prices grow slow enough, it can be stable in the long term. Duh?! That suspiciouly sounds like the definition of a pyramid scheme?