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Consider the source, right? How many people without a large vested interest in the propagation and uptake of cryptocurrency consider further growth likely? My

Consider the source, right? How many people without a large vested interest in the propagation and uptake of cryptocurrency consider further growth likely? My guess is that governments will more and more realize that the main utility of blockchains is money laundering and speculation. As has been remarked over and over again, they don't solve any above board problem more efficiently or with lower expense than existing technologies. I predict we'll see growing regulation increased amounts of crackdowns on cryptocurrency and its applications going forward.

v64 7y ago
I honestly don't understand where the perception comes from that this technology is only useful for laundering and speculation. Certainly it is currently being used for those purposes. But to say there is no imaginable use outside of that seems unwarranted. I've commented in the past here that the use of public blockchains to automate the functions of clearinghouses and escrow services will be a huge cost reduction for many industries such as finance. The technology as of today is not ready to handle that use case, but with the developments currently in the pipeline for Ethereum v2, progress is being made in that direction. If you look at what MakerDAO is doing with the Dai stablecoin, they've proven that it's possible to create a synthetic asset closely pegged to the dollar purely through financial incentives, and they did it all just using Ethereum v1. A holder of Dai can earn 4% APY through a Dai Savings Account, and a vote is currently in place to raise the rate to 6%. I personally find it incredible that an asset exists on the blockchain that's equivalent in value to USD, with a higher APY than you can get from any US bank. And because everything is on the blockchain, there's a public ledger of exactly how much is being collected in interest from those who are collateralizing their Ether for a Dai loan, how much of that interest is being paid to savings account holders, and how much is being collected by the system as surplus. It's the closest thing we have right now to a decentralized bank. Whether or not you buy into the technology, it's improving by the day and more and more use cases and applications are being tried out and built. If all you see in blockchain is money laundering and speculation, you haven't been paying attention.
- RcouF1uZ4gsC 7y ago
  > If you look at what MakerDAO is doing with the Dai stablecoin, they've proven that it's possible to create a synthetic asset closely pegged to the dollar purely through financial incentives, and they did it all just using Ethereum v1. A holder of Dai can earn 4% APY through a Dai Savings Account, and a vote is currently in place to raise the rate to 6%. >I personally find it incredible that an asset exists on the blockchain that's equivalent in value to USD, with a higher APY than you can get from any US bank. I also find this “incredible”, but in the old sense of the meaning as “not believable”.
  - ianferrel 7y ago
    Seriously. The risk adjusted return on whatever that crazy contraption is is almost certainly negative, and probably incalculably so. The idea that any sane financial instrument could increase its return by two points by the holders of it voting to do so is... I haven't the words.
    - induetimesir 7y ago
      In a way, you're absolutely right. In another way, you're totally missing the point. Net ROI hasn't been great for people who were earning x% interest on their ETH while it tanked 50%+. But the _idea_ the animates DAI, the dream of a decentralized synthetic digital bearer asset, that's a worthwhile dream imo. It's not a simple idea to understand. And it's not simple to implement technically/socially. But DAI has been a beautiful experiment in attempting to create this new-fangled thing. and while the jury is still out on whether the model/architecture they've chosen will hold up, the experiment itself should, in my view, be declared a massive success - it has, for the most part, worked very well. And DAI opens the door to new experiments. And they'll come. A trickle at first. but in 10yrs, it'll be an entirely different landscape when it comes to complex financial instruments. They'll be available in the way stocks can be had on Robinhood. and more. bcs financial instruments that are currently too complex or expensive to be practical, will be within reach. The rabbit hole is deep. and it is real. You can dive in and start learning. Or yell at clouds until your boat gets lifted by a wave of innovation...
nordsieck 7y ago
> As has been remarked over and over again, they don't solve any above board problem more efficiently or with lower expense than existing technologies. If you mean by that, it's possible to have a fiat currency with no dilution, that is true. Crypto currencies are fundamentally a political innovation; it is much more politically expensive to force dilution onto a crypto-currency than a fiat one. Whether that's valuable enough, I suppose we'll see.
- geekpowa 7y ago
  Dilution / inflation is a feature not a bug. Money should be put to work doing productive stuff in the economy, not hoarded. Also crypto currencies, are not currencies. They are commodities. It is far more accurate, conceptually to think about them the same as precious metals and grains, not dollars.
  - nordsieck 7y ago
    > Dilution / inflation is a feature not a bug. Money should be put to work doing productive stuff in the economy, not hoarded. There are few people who are interested in crypto-currency and have not heard this argument in many forms. Crypto-currency fans generally either don't care or don't think it's true.
    - chii 7y ago
      whether crypto fans think or believe it to be false (or not care) is irrelevant. Crypto has only shown the characteristics of a speculative commodity (like gold), and the laws of economics are as universal as any other law - bitcoins cannot become a currency unless it is done by fiat (like how china is exploring doing so right now, but with their own version of a crypto-currency where they control the chain).
      - jerry1979 7y ago
        If crypto's legacy plateaus at "digital gold" I'll feel satisfied.
dcow 7y ago
I’d much rather see a practical and modern replacement for physical cash that doesn’t impose a multiple percentage point revenue hit on businesses than a $200k bitcoin.
capableweb 7y ago
> Consider the source, right? How many people without a large vested interest in the propagation and uptake of cryptocurrency consider further growth likely? I agree with you in general, but also: The reason it's not that many is because the ones who see further growth, gets a interest into it, maybe even vested interest. So, not a good argument.
wpietri 7y ago
Exactly. It has been 10+ years since the Bitcoin paper. No cryptocurrency has significant consumer adoption. [1], [2] Except for light financial crime (ransomware, money laundering, gambling, theft, etc), it has no demonstrated advantage over alternative technologies. I don't think it will go away, any more than Ponzi and Make Money Fast schemes have gone away. But like you, I expect it will fade into the background as "that weird old thing" as governmental KYC and AML efforts make it ever harder to convert it into real money. I also expect that the fashion for it in VC investment, already waning, will totally fade by the end of the 2020s. And that regulators like the SEC will have ended the various its-not-equity equity investments, cutting off the other major source of funds. [1] E.g.: https://www.nytimes.com/2018/04/16/nyregion/new-york-today-living-on-bitcoin.html https://www.nytimes.com/2018/04/16/nyregion/new-york-today-l... [2] For "significant" contrast it with M-PESA, which is also digital money and launched around the same time: https://en.wikipedia.org/wiki/M-Pesa https://en.wikipedia.org/wiki/M-Pesa
- sincerely 7y ago
  >Except for light financial crime (ransomware, money laundering, gambling, theft, etc), it has no demonstrated advantage over alternative technologies. I know this is a crime, but it's not a financial crime: cryptocurrency has HUGE advantages over alternative tech for buying drugs online.
  - wpietri 7y ago
    Fair point. It becomes financial crime for the drug seller, but you're right that Bitcoin is also good for other kinds of crime. In a world where marijuana legalization wasn't happening, I think Bitcoin would have more of a chance.
- thenewnewguy 7y ago
  > Except for light financial crime (ransomware, money laundering, gambling, theft, etc), it has no demonstrated advantage over alternative technologies. Slight nitpick: Cryptocurrencies have demonstrable advantages over existing solutions (pseudo-anonymity, decentralization, inflation-proof, etc) but consumers don't care about these advantages enough to make the switch.
rolltiide 7y ago
> Consider the source, right? How many people without a large vested interest in the propagation and uptake of cryptocurrency consider further growth likely? So 90% of this post's accuracy is unchanged whether the CEO of Coinbase was the CEO of Coinbase or not. Lets look at some of the points: People are working on removing the surveillance aspect of cryptocurrencies. thats a truth that has nothing to do with adoption. People are working on making them faster. that's a truth that has nothing to do with adoption. The Chinese Government has said they will a central bank digital asset for currency. that's a truth that has nothing to do with bagholding other cryptocurrencies Every industry experiences consolidation, it doesn't really take a soothsayer with a conflicting interest in to tell you that. and so on
cactus2093 7y ago
> they don't solve any above board problem more efficiently or with lower expense than existing technologies You've picked two arbitrary criteria, which certainly don't cover the entire range of useful properties that anybody in the world might want. And even still, you're only right about one of them. Cryptocurrency is very inefficient from a power consumption standpoint, no denying that. Not sure what you mean about lower expense though, sending money internationally (in a perfectly above-board way, like placing an order or supporting relatives in another country) can be a lot cheaper via bitcoin than alternatives like Western Union. It's also useful as a store of value that's not tied to a single government, so similar to gold in its intrinsic value but with the benefit that it doesn't take up physical space and can be sent and received much more easily. I'm still quite bullish on bitcoin itself, for these properties alone, I see these properties as basically a floor on the value that it can provide and even just for for this use there's room for a lot of growth. If Ethereum-style contracts/apps and all the other kinds of things discussed in the post also gain wide adoption (which certainly seem like far from a sure thing at this point, but also not completely crazy), that's just a bonus.
biolurker1 7y ago
How many people without vested interest? How about the Imf, China, Facebook and basically every big player in the world?
polyomino 7y ago
Governments make use of money laundering and they're willing to pay quite a bit for it
moralsupply 7y ago
> the main utility of blockchains is money laundering and speculation Where did you get the data that justifies that assertion? In any case, don't bother with cryptocurrencies. I'd recommend that you keep all your wealth anchored in US Dollars for the next 3-5 years.
l3kk0 7y ago
Not true. Here's an example of how blockchain is changing real estate transactions and the title insurance industry: https://www.deeds.com/articles/the-real-estate-deal-decluttered-blockchain-and-deed-recording/ https://www.deeds.com/articles/the-real-estate-deal-declutte... This involves state and county governments recognizing a current problem that is easily solved with blockchain technology. In this particular use case, blockchain is used to prevent fraud and provide a more efficient process.

v64 7y ago

I honestly don't understand where the perception comes from that this technology is only useful for laundering and speculation. Certainly it is currently being used for those purposes. But to say there is no imaginable use outside of that seems unwarranted. I've commented in the past here that the use of public blockchains to automate the functions of clearinghouses and escrow services will be a huge cost reduction for many industries such as finance. The technology as of today is not ready to handle that use case, but with the developments currently in the pipeline for Ethereum v2, progress is being made in that direction. If you look at what MakerDAO is doing with the Dai stablecoin, they've proven that it's possible to create a synthetic asset closely pegged to the dollar purely through financial incentives, and they did it all just using Ethereum v1. A holder of Dai can earn 4% APY through a Dai Savings Account, and a vote is currently in place to raise the rate to 6%. I personally find it incredible that an asset exists on the blockchain that's equivalent in value to USD, with a higher APY than you can get from any US bank. And because everything is on the blockchain, there's a public ledger of exactly how much is being collected in interest from those who are collateralizing their Ether for a Dai loan, how much of that interest is being paid to savings account holders, and how much is being collected by the system as surplus. It's the closest thing we have right now to a decentralized bank. Whether or not you buy into the technology, it's improving by the day and more and more use cases and applications are being tried out and built. If all you see in blockchain is money laundering and speculation, you haven't been paying attention.

RcouF1uZ4gsC 7y ago
> If you look at what MakerDAO is doing with the Dai stablecoin, they've proven that it's possible to create a synthetic asset closely pegged to the dollar purely through financial incentives, and they did it all just using Ethereum v1. A holder of Dai can earn 4% APY through a Dai Savings Account, and a vote is currently in place to raise the rate to 6%. >I personally find it incredible that an asset exists on the blockchain that's equivalent in value to USD, with a higher APY than you can get from any US bank. I also find this “incredible”, but in the old sense of the meaning as “not believable”.
- ianferrel 7y ago
  Seriously. The risk adjusted return on whatever that crazy contraption is is almost certainly negative, and probably incalculably so. The idea that any sane financial instrument could increase its return by two points by the holders of it voting to do so is... I haven't the words.
  - induetimesir 7y ago
    In a way, you're absolutely right. In another way, you're totally missing the point. Net ROI hasn't been great for people who were earning x% interest on their ETH while it tanked 50%+. But the _idea_ the animates DAI, the dream of a decentralized synthetic digital bearer asset, that's a worthwhile dream imo. It's not a simple idea to understand. And it's not simple to implement technically/socially. But DAI has been a beautiful experiment in attempting to create this new-fangled thing. and while the jury is still out on whether the model/architecture they've chosen will hold up, the experiment itself should, in my view, be declared a massive success - it has, for the most part, worked very well. And DAI opens the door to new experiments. And they'll come. A trickle at first. but in 10yrs, it'll be an entirely different landscape when it comes to complex financial instruments. They'll be available in the way stocks can be had on Robinhood. and more. bcs financial instruments that are currently too complex or expensive to be practical, will be within reach. The rabbit hole is deep. and it is real. You can dive in and start learning. Or yell at clouds until your boat gets lifted by a wave of innovation...

nordsieck 7y ago

> As has been remarked over and over again, they don't solve any above board problem more efficiently or with lower expense than existing technologies. If you mean by that, it's possible to have a fiat currency with no dilution, that is true. Crypto currencies are fundamentally a political innovation; it is much more politically expensive to force dilution onto a crypto-currency than a fiat one. Whether that's valuable enough, I suppose we'll see.

geekpowa 7y ago
Dilution / inflation is a feature not a bug. Money should be put to work doing productive stuff in the economy, not hoarded. Also crypto currencies, are not currencies. They are commodities. It is far more accurate, conceptually to think about them the same as precious metals and grains, not dollars.
- nordsieck 7y ago
  > Dilution / inflation is a feature not a bug. Money should be put to work doing productive stuff in the economy, not hoarded. There are few people who are interested in crypto-currency and have not heard this argument in many forms. Crypto-currency fans generally either don't care or don't think it's true.
  - chii 7y ago
    whether crypto fans think or believe it to be false (or not care) is irrelevant. Crypto has only shown the characteristics of a speculative commodity (like gold), and the laws of economics are as universal as any other law - bitcoins cannot become a currency unless it is done by fiat (like how china is exploring doing so right now, but with their own version of a crypto-currency where they control the chain).
    - jerry1979 7y ago
      If crypto's legacy plateaus at "digital gold" I'll feel satisfied.

dcow 7y ago

I’d much rather see a practical and modern replacement for physical cash that doesn’t impose a multiple percentage point revenue hit on businesses than a $200k bitcoin.

capableweb 7y ago

> Consider the source, right? How many people without a large vested interest in the propagation and uptake of cryptocurrency consider further growth likely? I agree with you in general, but also: The reason it's not that many is because the ones who see further growth, gets a interest into it, maybe even vested interest. So, not a good argument.

wpietri 7y ago

Exactly. It has been 10+ years since the Bitcoin paper. No cryptocurrency has significant consumer adoption. [1], [2] Except for light financial crime (ransomware, money laundering, gambling, theft, etc), it has no demonstrated advantage over alternative technologies. I don't think it will go away, any more than Ponzi and Make Money Fast schemes have gone away. But like you, I expect it will fade into the background as "that weird old thing" as governmental KYC and AML efforts make it ever harder to convert it into real money. I also expect that the fashion for it in VC investment, already waning, will totally fade by the end of the 2020s. And that regulators like the SEC will have ended the various its-not-equity equity investments, cutting off the other major source of funds. [1] E.g.: https://www.nytimes.com/2018/04/16/nyregion/new-york-today-living-on-bitcoin.html https://www.nytimes.com/2018/04/16/nyregion/new-york-today-l... [2] For "significant" contrast it with M-PESA, which is also digital money and launched around the same time: https://en.wikipedia.org/wiki/M-Pesa https://en.wikipedia.org/wiki/M-Pesa

sincerely 7y ago
>Except for light financial crime (ransomware, money laundering, gambling, theft, etc), it has no demonstrated advantage over alternative technologies. I know this is a crime, but it's not a financial crime: cryptocurrency has HUGE advantages over alternative tech for buying drugs online.
- wpietri 7y ago
  Fair point. It becomes financial crime for the drug seller, but you're right that Bitcoin is also good for other kinds of crime. In a world where marijuana legalization wasn't happening, I think Bitcoin would have more of a chance.
thenewnewguy 7y ago
> Except for light financial crime (ransomware, money laundering, gambling, theft, etc), it has no demonstrated advantage over alternative technologies. Slight nitpick: Cryptocurrencies have demonstrable advantages over existing solutions (pseudo-anonymity, decentralization, inflation-proof, etc) but consumers don't care about these advantages enough to make the switch.

rolltiide 7y ago

> Consider the source, right? How many people without a large vested interest in the propagation and uptake of cryptocurrency consider further growth likely? So 90% of this post's accuracy is unchanged whether the CEO of Coinbase was the CEO of Coinbase or not. Lets look at some of the points: People are working on removing the surveillance aspect of cryptocurrencies. thats a truth that has nothing to do with adoption. People are working on making them faster. that's a truth that has nothing to do with adoption. The Chinese Government has said they will a central bank digital asset for currency. that's a truth that has nothing to do with bagholding other cryptocurrencies Every industry experiences consolidation, it doesn't really take a soothsayer with a conflicting interest in to tell you that. and so on

cactus2093 7y ago

> they don't solve any above board problem more efficiently or with lower expense than existing technologies You've picked two arbitrary criteria, which certainly don't cover the entire range of useful properties that anybody in the world might want. And even still, you're only right about one of them. Cryptocurrency is very inefficient from a power consumption standpoint, no denying that. Not sure what you mean about lower expense though, sending money internationally (in a perfectly above-board way, like placing an order or supporting relatives in another country) can be a lot cheaper via bitcoin than alternatives like Western Union. It's also useful as a store of value that's not tied to a single government, so similar to gold in its intrinsic value but with the benefit that it doesn't take up physical space and can be sent and received much more easily. I'm still quite bullish on bitcoin itself, for these properties alone, I see these properties as basically a floor on the value that it can provide and even just for for this use there's room for a lot of growth. If Ethereum-style contracts/apps and all the other kinds of things discussed in the post also gain wide adoption (which certainly seem like far from a sure thing at this point, but also not completely crazy), that's just a bonus.

biolurker1 7y ago

How many people without vested interest? How about the Imf, China, Facebook and basically every big player in the world?

polyomino 7y ago

Governments make use of money laundering and they're willing to pay quite a bit for it

moralsupply 7y ago

> the main utility of blockchains is money laundering and speculation Where did you get the data that justifies that assertion? In any case, don't bother with cryptocurrencies. I'd recommend that you keep all your wealth anchored in US Dollars for the next 3-5 years.

l3kk0 7y ago

Not true. Here's an example of how blockchain is changing real estate transactions and the title insurance industry: https://www.deeds.com/articles/the-real-estate-deal-decluttered-blockchain-and-deed-recording/ https://www.deeds.com/articles/the-real-estate-deal-declutte... This involves state and county governments recognizing a current problem that is easily solved with blockchain technology. In this particular use case, blockchain is used to prevent fraud and provide a more efficient process.