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One aspect of Coinbase I find interesting: Without the distorting action of governments printing money, interest rates might be set by market forces inside "cr

One aspect of Coinbase I find interesting: Without the distorting action of governments printing money, interest rates might be set by market forces inside "crypto land". This might lead to a long term situation where artificially low interest rates are paid in government controlled currencies, but market prices are paid in crypto currencies. If this leads to a mass adoption of crypto-lending, then Coinbase might be where people hold their funds. Because it is even more complicated to stake coins than it is to just hold coins. Are there any forums on the internet where a serious discussion about these types of topics can be held?

0xfaded 6y ago
If one has the option to borrow at 0% on a currency that they believe will experience inflation, why would they choose to borrow in crypto (unless trying to short the market of course). The current problem seems now that just not enough people are willing/able to do anything productive with capital, leading to a shortage of lending opportunities. In theory this should create a buyers market for anyone wanting capital, and to some extent it has. The problem is that, for whatever reason, people choose to poor capital into unproductive assets (IMO crypto being a minor culprit compared to real-estate or share buybacks). At the higher level, I see this as a consequence of globalisation, where capital was made hyper mobile, and therefore it was applied away from home. Negative interest rates are a somewhat desperate attempt to put more capital in motion at home, but other policy has made this unattractive for anything but speculating.
- ArtTimeInvestor 6y ago
  Your question comes down to why there are different levels of interest rates across currencies. Why does the USA bonds pay 1.5% while European bonds pay nothing? Yes, why?
  - pjc50 6y ago
    ? US 1y bond yields are about 0.06%: https://www.treasury.gov/resource-center/data-chart-center/interest-rates/pages/textview.aspx?data=yield https://www.treasury.gov/resource-center/data-chart-center/i... They're all hovering around zero due to rate targeting and failure to get price/wage inflation back up to about 2%.
    - ArtTimeInvestor 6y ago
      US 10 year rate is at 1.5% https://www.tradingview.com/symbols/TVC-US10Y/ https://www.tradingview.com/symbols/TVC-US10Y/
SideburnsOfDoom 6y ago
You're looking for "a serious discussion" of the "distorting action" of governments ... doing standard government monetary policy? Unfortunately, that's not a serious framing of of the situation.
- ArtTimeInvestor 6y ago
  Your opinion is that the actions of governments like printing money are not distorting the market value of money, aka the interest rates?
  - SideburnsOfDoom 6y ago
    > distort: give a misleading or false account or impression of. "distorting" as opposed to "influencing" or "creating" - of course it has impact, it wouldn't be a thing to do if it had no effect. But your statement is a bit like "roofs on houses distort the fall of rain". If not categorically wrong, it's an unconventional and loaded framing.
    - ArtTimeInvestor 6y ago
      It is distortion because the flow money of money is information. It makes the economy aware of where to assign resources. In this information network, the printing of money is adding noise to the signal. Making the economy less efficient.
      - SideburnsOfDoom 6y ago
        You make it sound like there is an "undistorted" market yearning to breath free if only government would let go. This is quite ideological, hidden in that one word. Does the role of government in law enforcement and armed forces that that allows markets to exist in the first place also fall under the category of "distortion" in this absolutist framing?
pjc50 6y ago
Is there significant on-chain lending of crypto? Or is it all margin lending on exchanges? What are the prevailing interest rates in pure-crypto land?
- ArtTimeInvestor 6y ago
  There is about $8B Ether staked and the APR is expected to be about 7%. This is probably a small fraction of staked coins in crypto over all. But I have only looked into this Ether so far. Isn't Tether mostly used for lending purposes? There is about $50B in Tether out there. Maybe someone who is more experienced with the state of staking/lending can chime in.
ignoramous 6y ago
> Are there any forums on the internet where a serious discussion about these types of topics can be held? Crypto twitter is one place: https://twitter.com/balajis/ https://twitter.com/balajis/ Most of the crypto / de-fi developer community (for Cosmos, Polkadot, Kava, Compound, Balancer, Dharma etc) is on respective Telegram groups.
- ArtTimeInvestor 6y ago
  I opened the first thread and the top reply is: "This is brilliant @balajis. India Totally need to add Crypto to India stack. Such a thoughtful piece. Will read it a couple of times and compile my thoughts around it." This is basically an upvote blown up to a bunch of words I have to read. Second reply just reads "@balajis you’re incredible". I am looking for a discussion where only thoughtful comments that add to the discussion are posted. Or at least only those are voted to the top.
  - SideburnsOfDoom 6y ago
    You can find a "serious" discussion of virtually any point of view on the internet now, the lunacy of an outlook is no longer a barrier to some group of people taking it seriously. However you have, on the second go, added the "thoughtful" qualifier. That, not so much. In fact, the lack of it should tell you something.

0xfaded 6y ago

If one has the option to borrow at 0% on a currency that they believe will experience inflation, why would they choose to borrow in crypto (unless trying to short the market of course). The current problem seems now that just not enough people are willing/able to do anything productive with capital, leading to a shortage of lending opportunities. In theory this should create a buyers market for anyone wanting capital, and to some extent it has. The problem is that, for whatever reason, people choose to poor capital into unproductive assets (IMO crypto being a minor culprit compared to real-estate or share buybacks). At the higher level, I see this as a consequence of globalisation, where capital was made hyper mobile, and therefore it was applied away from home. Negative interest rates are a somewhat desperate attempt to put more capital in motion at home, but other policy has made this unattractive for anything but speculating.

ArtTimeInvestor 6y ago
Your question comes down to why there are different levels of interest rates across currencies. Why does the USA bonds pay 1.5% while European bonds pay nothing? Yes, why?
- pjc50 6y ago
  ? US 1y bond yields are about 0.06%: https://www.treasury.gov/resource-center/data-chart-center/interest-rates/pages/textview.aspx?data=yield https://www.treasury.gov/resource-center/data-chart-center/i... They're all hovering around zero due to rate targeting and failure to get price/wage inflation back up to about 2%.
  - ArtTimeInvestor 6y ago
    US 10 year rate is at 1.5% https://www.tradingview.com/symbols/TVC-US10Y/ https://www.tradingview.com/symbols/TVC-US10Y/

SideburnsOfDoom 6y ago

You're looking for "a serious discussion" of the "distorting action" of governments ... doing standard government monetary policy? Unfortunately, that's not a serious framing of of the situation.

ArtTimeInvestor 6y ago
Your opinion is that the actions of governments like printing money are not distorting the market value of money, aka the interest rates?
- SideburnsOfDoom 6y ago
  > distort: give a misleading or false account or impression of. "distorting" as opposed to "influencing" or "creating" - of course it has impact, it wouldn't be a thing to do if it had no effect. But your statement is a bit like "roofs on houses distort the fall of rain". If not categorically wrong, it's an unconventional and loaded framing.
  - ArtTimeInvestor 6y ago
    It is distortion because the flow money of money is information. It makes the economy aware of where to assign resources. In this information network, the printing of money is adding noise to the signal. Making the economy less efficient.
    - SideburnsOfDoom 6y ago
      You make it sound like there is an "undistorted" market yearning to breath free if only government would let go. This is quite ideological, hidden in that one word. Does the role of government in law enforcement and armed forces that that allows markets to exist in the first place also fall under the category of "distortion" in this absolutist framing?

pjc50 6y ago

Is there significant on-chain lending of crypto? Or is it all margin lending on exchanges? What are the prevailing interest rates in pure-crypto land?

ArtTimeInvestor 6y ago
There is about $8B Ether staked and the APR is expected to be about 7%. This is probably a small fraction of staked coins in crypto over all. But I have only looked into this Ether so far. Isn't Tether mostly used for lending purposes? There is about $50B in Tether out there. Maybe someone who is more experienced with the state of staking/lending can chime in.

ignoramous 6y ago

> Are there any forums on the internet where a serious discussion about these types of topics can be held? Crypto twitter is one place: https://twitter.com/balajis/ https://twitter.com/balajis/ Most of the crypto / de-fi developer community (for Cosmos, Polkadot, Kava, Compound, Balancer, Dharma etc) is on respective Telegram groups.

ArtTimeInvestor 6y ago
I opened the first thread and the top reply is: "This is brilliant @balajis. India Totally need to add Crypto to India stack. Such a thoughtful piece. Will read it a couple of times and compile my thoughts around it." This is basically an upvote blown up to a bunch of words I have to read. Second reply just reads "@balajis you’re incredible". I am looking for a discussion where only thoughtful comments that add to the discussion are posted. Or at least only those are voted to the top.
- SideburnsOfDoom 6y ago
  You can find a "serious" discussion of virtually any point of view on the internet now, the lunacy of an outlook is no longer a barrier to some group of people taking it seriously. However you have, on the second go, added the "thoughtful" qualifier. That, not so much. In fact, the lack of it should tell you something.