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I hear what you are saying. I work in this industry and am intimately involved with all of this. Let me try and explain differently. There are good reasons why

I hear what you are saying. I work in this industry and am intimately involved with all of this. Let me try and explain differently. There are good reasons why a traditional stock, like Apple, would be valuable on the blockchain. Imagine Apple stock was just like any other token or cryptocurrency - it could be anonymously owned, traded on any exchange (including ones that just pop up out of nowhere), can be traded 24/7/365, and could be used as payment for coffee just as easily as cash. Clearly this is advantageous for some people who want this. From the perspective of a regulator, or citizen concerned of fraud, this is horrible! A nightmare! But to others, they prefer this situation. This is what a token is. It's like a traditional stock, but also all of the above. Plus it has utility according to however the project uses it. All of the tokens tend to match the same protocols (on Ethereum it's known as ERC20), so if a new service pops up ("Pay for Coffee with Token Service"), suddenly any new token can be used in it. It's like automated plumbing. You have to switch to the mindset of someone who is a "crypto native" person. They don't think like a normal person. They have different values and motivations.

ashtonkem 7y ago
I think we’re starting to have two conversations in parallel, so I’ll do my best to keep this straight. It appears that there are two models; stocks on the blockchain, and tokens as item of utility. Stocks on the blockchain makes sense technically, especially for investing in risky non-crypto small companies. Tiny use case, but reasonable. I’m super dubious about paying with the crypto equivalent of stocks for purely social reasons; it introduces a lot of exchange risk and negotiation into the process of purchasing goods. One of the reasons money is good is that it creates a common unit of account; I don’t need to find a barista that’s interested in whatever stock I’ve got in order to buy coffee. Sure; I could sell or exchange that stock for something my barista wants, probably money, but the value to the consumers in question is getting pretty thin. I will say though that stock markets are probably the only model I’ve seen that fits cleanly into the blockchain model; stock trades pretty much stay in the stock exchange itself, eliminating the oracle problem. If blockchain latency could get lowered significantly, I wouldn’t be surprised to see stock markets on the blockchain. What I see much more of is the “token as utility” scheme. This is usually a blockchain startup offering some sort of token that has a planned utility once the company is operational. Kodak’s coin is on the top of my mind; the plan was that you could use the coins to license work on the chain and pay photographers. These utility coins always seem super shady to me, and the justifications on why the utility coin should have utility (and thus value) border somewhere between nonsense and insanity.
- seibelj 7y ago
  Yes - stocks on the blockchain make sense. But through this plumbing, the barista wants USD. Imagine there is a coin the barista trusts is as good as USD (a "stablecoin"). Or imagine that there is a service in the background that has interfaced with the traditional credit card system as well as the blockchain, and does a bunch of functions really fast. Then, when the customer pays with a token, protocols just instantly convert it in the background to the exact amount of USD of the coffee. This stuff sort-of already exists. USDC is a US-dollar backed stablecoin https://www.coinbase.com/usdc https://www.coinbase.com/usdc and Uniswap https://uniswap.exchange/swap https://uniswap.exchange/swap is a decentralized algorithmic protocol for auto-converting between any 2 supported tokens. So if the barista takes USDC and you have some scammy token that few people want, you can instant-convert (well, "instant" in Ethereum is 15 to 30 seconds) from your token to the USD to the coffee. So what I'm saying is, you need to change your mind from buckets, where assets are only in one bucket. The token is not either a stock or a "utility" token. It's all of the above, simultaneously, and more as the plumbing keeps innovating. As long as someone, somewhere, is willing to purchase it for some price, it can function in a huge variety of ways.
  - ashtonkem 7y ago
    I agree, that’s all solvable. But “we can make this work” is quite different from “you want this”. Credit cards work just fine for me, I’m even rewarded 1-5% for using them. I can’t see why I’d want to switch over to this and deal with the nightmare it would make my book keeping, not why my barista would want it over cash or credit card.
    - seibelj 7y ago
      That is the endgame - paying for coffee with cryptocurrency tokens. That would be if crypto really took off so much that payment networks for the average person and physical businesses accepted cryptocurrency. This would be in the future - if it happens at all. There are some moves to do something like this for online payments - think "stripe for crypto" - such as Circle's business SDK for USDC https://www.circle.com/en/ https://www.circle.com/en/ and USDT on Tron for Pornhub payments https://www.theblockcrypto.com/linked/53826/pornhub-adds-tether-to-its-payment-options-via-tron-wallet https://www.theblockcrypto.com/linked/53826/pornhub-adds-tet... I reiterate - this is a massive experiment. It's rethinking the entire financial system to be rebuilt using open APIs and protocols. All sorts of weird stuff is happening on it, most of which will fail. Just like in the real financial system, which attracts lots of scammers who are constantly hounded and penalized by regulators, there are lots of scammers here. Even more so because they can't be arrested as easily (or ever). But it's open and anyone can use it, for better or worse. So the question is not why you won't use it for bookkeeping, purchases, credit card rewards, etc. It's why is anyone using it at all? You know easily why you yourself won't use it. But Bitcoin is still worth $150 billion and Ethereum $20 billion - clearly a lot of people want it, and value it. It's a slow, difficult, complex, risky network. But people keep building on it, experimenting, improving. People find it useful for certain things. As long as those things stay useful, I believe it will at least maintain its value. But if people build more things, and find more utility, then it goes up in value. Do I personally have all of my wealth and retirement tied up in this? No, absolutely not. Way too risky. But do I own some crypto, find utility in it, speculate, and experiment? Yes! The ecosystem is so vast I can't briefly explain all the use cases. There are many use cases, many reasons, many things people want and use crypto for, and more every year. This is a multi-generational experiment. It took hundreds of years for the modern financial system to come, and only a decade for this new one, so it needs more time.

ashtonkem 7y ago

I think we’re starting to have two conversations in parallel, so I’ll do my best to keep this straight. It appears that there are two models; stocks on the blockchain, and tokens as item of utility. Stocks on the blockchain makes sense technically, especially for investing in risky non-crypto small companies. Tiny use case, but reasonable. I’m super dubious about paying with the crypto equivalent of stocks for purely social reasons; it introduces a lot of exchange risk and negotiation into the process of purchasing goods. One of the reasons money is good is that it creates a common unit of account; I don’t need to find a barista that’s interested in whatever stock I’ve got in order to buy coffee. Sure; I could sell or exchange that stock for something my barista wants, probably money, but the value to the consumers in question is getting pretty thin. I will say though that stock markets are probably the only model I’ve seen that fits cleanly into the blockchain model; stock trades pretty much stay in the stock exchange itself, eliminating the oracle problem. If blockchain latency could get lowered significantly, I wouldn’t be surprised to see stock markets on the blockchain. What I see much more of is the “token as utility” scheme. This is usually a blockchain startup offering some sort of token that has a planned utility once the company is operational. Kodak’s coin is on the top of my mind; the plan was that you could use the coins to license work on the chain and pay photographers. These utility coins always seem super shady to me, and the justifications on why the utility coin should have utility (and thus value) border somewhere between nonsense and insanity.

seibelj 7y ago
Yes - stocks on the blockchain make sense. But through this plumbing, the barista wants USD. Imagine there is a coin the barista trusts is as good as USD (a "stablecoin"). Or imagine that there is a service in the background that has interfaced with the traditional credit card system as well as the blockchain, and does a bunch of functions really fast. Then, when the customer pays with a token, protocols just instantly convert it in the background to the exact amount of USD of the coffee. This stuff sort-of already exists. USDC is a US-dollar backed stablecoin https://www.coinbase.com/usdc https://www.coinbase.com/usdc and Uniswap https://uniswap.exchange/swap https://uniswap.exchange/swap is a decentralized algorithmic protocol for auto-converting between any 2 supported tokens. So if the barista takes USDC and you have some scammy token that few people want, you can instant-convert (well, "instant" in Ethereum is 15 to 30 seconds) from your token to the USD to the coffee. So what I'm saying is, you need to change your mind from buckets, where assets are only in one bucket. The token is not either a stock or a "utility" token. It's all of the above, simultaneously, and more as the plumbing keeps innovating. As long as someone, somewhere, is willing to purchase it for some price, it can function in a huge variety of ways.
- ashtonkem 7y ago
  I agree, that’s all solvable. But “we can make this work” is quite different from “you want this”. Credit cards work just fine for me, I’m even rewarded 1-5% for using them. I can’t see why I’d want to switch over to this and deal with the nightmare it would make my book keeping, not why my barista would want it over cash or credit card.
  - seibelj 7y ago
    That is the endgame - paying for coffee with cryptocurrency tokens. That would be if crypto really took off so much that payment networks for the average person and physical businesses accepted cryptocurrency. This would be in the future - if it happens at all. There are some moves to do something like this for online payments - think "stripe for crypto" - such as Circle's business SDK for USDC https://www.circle.com/en/ https://www.circle.com/en/ and USDT on Tron for Pornhub payments https://www.theblockcrypto.com/linked/53826/pornhub-adds-tether-to-its-payment-options-via-tron-wallet https://www.theblockcrypto.com/linked/53826/pornhub-adds-tet... I reiterate - this is a massive experiment. It's rethinking the entire financial system to be rebuilt using open APIs and protocols. All sorts of weird stuff is happening on it, most of which will fail. Just like in the real financial system, which attracts lots of scammers who are constantly hounded and penalized by regulators, there are lots of scammers here. Even more so because they can't be arrested as easily (or ever). But it's open and anyone can use it, for better or worse. So the question is not why you won't use it for bookkeeping, purchases, credit card rewards, etc. It's why is anyone using it at all? You know easily why you yourself won't use it. But Bitcoin is still worth $150 billion and Ethereum $20 billion - clearly a lot of people want it, and value it. It's a slow, difficult, complex, risky network. But people keep building on it, experimenting, improving. People find it useful for certain things. As long as those things stay useful, I believe it will at least maintain its value. But if people build more things, and find more utility, then it goes up in value. Do I personally have all of my wealth and retirement tied up in this? No, absolutely not. Way too risky. But do I own some crypto, find utility in it, speculate, and experiment? Yes! The ecosystem is so vast I can't briefly explain all the use cases. There are many use cases, many reasons, many things people want and use crypto for, and more every year. This is a multi-generational experiment. It took hundreds of years for the modern financial system to come, and only a decade for this new one, so it needs more time.