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It's understandable why people consider 100% of crypto to be a scam. But several projects have an actual P/E ratio now. You can't deny a P/E ratio. Value is be

It's understandable why people consider 100% of crypto to be a scam. But several projects have an actual P/E ratio now. You can't deny a P/E ratio. Value is being created here. In 2013 bubble everything was bitcoin clone but "better". No cash flow. In 2017 it was unregulated securities - illegal, no cash flow. In 2021 with Defi you don't need to struggle to explain anything. People get paid for providing capital at a higher rates than in traditional finance because smart contracts are removing friction. Stakeholders get paid dividends for governance, just like a normal company.

meltedcapacitor 5y ago
LOL defi is a neat idea but the current reality is order of magnitude slower and orders of magnitude more expensive than "legacy". It adds a lots of friction. Players "get paid" because folks can't read smart contracts and see that behind the cover story it's just flows from new players to exiting players, which looks good as long as inflows are larger than outflows, which of course will last forever.
Daishiman 5y ago
> now. You can't deny a P/E ratio. Value is being created here. Which ones?
- wickoff 5y ago
  https://sushi.com https://sushi.com is the best example.
Nasrudith 5y ago
Madoff had a price to earning ratio too. I don't think that variable doesn't say what you think it does. Higher rates implies more risk which certainly applies to cryptocurrencies.
SavantIdiot 5y ago
> You can't deny a P/E ratio. Value is being created here. Oh yes, yes you can. You're talking about a currency exchange, not a commodity. I guess you weren't around for the last two bubbles. There literally is no value being created. Coinbase earnings are based on people paying to use its service, and that service is trading imaginary currency with no intrinsic value. Unlike a semiconductor, oil, or even industrial labor.
- lowdest 5y ago
  Coinbase provides KYC compliance which then gives it government blessing to be a gateway between crypto and the US dollar financial system. That is the value. Otherwise, there are DApps that allow trading between cryptos and don't require employees, offices, centralized server infrastructure, etc. that would take the place of Coinbase.
  - SavantIdiot 5y ago
    it is value based on vaporware. don't be a K=1 thinker.
- thwarted 5y ago
  So it's like a mobile game with in-game purchases and loot boxes. It's the entertainment industry in the finance industry's clothing.
graeme 5y ago
Can you please give specific examples which are enabling things that aren’t intra crypto speculation? The only examples I’ve seen tend to be services that make money off crypto investing, which is obviously circular: those revenues ultimately depend on there actually being value in crypto. But perhaps there are cases I’ve missed.
- wickoff 5y ago
  Let's say I have some Bitcoin and I want to buy a car without selling any Bitcoin. I can take out an over-collateralized loan in a stablecoin at 4% APR. I can transfer my stablecoin to an off-ramp exchange and pay for the car. Now two things can happen - either I pay off the loan myself or the price of bitcoin drops and my collateral is liquidated to pay off the loan, then it's no different than buying a car with bitcoin.
  - graeme 5y ago
    The existing financial system already lets you take out loans against houses, stocks, etc. How is this different?
    - wickoff 5y ago
      Global availability, no questions about the purpose of the loan, not difference in rates depending on purpose, transparency enforced by a smart contract, no hidden fees or upfront costs.
      - graeme 5y ago
        > Global availability Good in theory, but how much does this matter to anyone in a country with a functional financial system? I have access to many loan products > not difference in rates depending on purpose Isn’t this bad for borrowers with valuable purposes or good credit? They’d potentially expect higher rates. > transparency enforced by a smart contract For most people this is akin to saying “you can examine the code yourself!” Most people can’t do that. And it’s not especially difficult to read a loan contract, if you would have the ability to understand a smart contract. How many people taking crypto loans have no idea about liquidation, or capital gains tax obligations in the event of liquidation? > no hidden fees See previous question: it seems like for many sudden liquidation or owing capital gains tax in such an event may be unexpected. > upfront costs Loans normally don’t have upfront costs. The loans seem neat for bringing collateralized lending to crypto, but it doesn’t seem like you’d have much advantage in selling stock and moving to crypto for loans. Or am I missing something?

meltedcapacitor 5y ago

LOL defi is a neat idea but the current reality is order of magnitude slower and orders of magnitude more expensive than "legacy". It adds a lots of friction. Players "get paid" because folks can't read smart contracts and see that behind the cover story it's just flows from new players to exiting players, which looks good as long as inflows are larger than outflows, which of course will last forever.

Daishiman 5y ago

> now. You can't deny a P/E ratio. Value is being created here. Which ones?

wickoff 5y ago
https://sushi.com https://sushi.com is the best example.

Nasrudith 5y ago

Madoff had a price to earning ratio too. I don't think that variable doesn't say what you think it does. Higher rates implies more risk which certainly applies to cryptocurrencies.

SavantIdiot 5y ago

> You can't deny a P/E ratio. Value is being created here. Oh yes, yes you can. You're talking about a currency exchange, not a commodity. I guess you weren't around for the last two bubbles. There literally is no value being created. Coinbase earnings are based on people paying to use its service, and that service is trading imaginary currency with no intrinsic value. Unlike a semiconductor, oil, or even industrial labor.

lowdest 5y ago
Coinbase provides KYC compliance which then gives it government blessing to be a gateway between crypto and the US dollar financial system. That is the value. Otherwise, there are DApps that allow trading between cryptos and don't require employees, offices, centralized server infrastructure, etc. that would take the place of Coinbase.
- SavantIdiot 5y ago
  it is value based on vaporware. don't be a K=1 thinker.
thwarted 5y ago
So it's like a mobile game with in-game purchases and loot boxes. It's the entertainment industry in the finance industry's clothing.

graeme 5y ago

Can you please give specific examples which are enabling things that aren’t intra crypto speculation? The only examples I’ve seen tend to be services that make money off crypto investing, which is obviously circular: those revenues ultimately depend on there actually being value in crypto. But perhaps there are cases I’ve missed.

wickoff 5y ago
Let's say I have some Bitcoin and I want to buy a car without selling any Bitcoin. I can take out an over-collateralized loan in a stablecoin at 4% APR. I can transfer my stablecoin to an off-ramp exchange and pay for the car. Now two things can happen - either I pay off the loan myself or the price of bitcoin drops and my collateral is liquidated to pay off the loan, then it's no different than buying a car with bitcoin.
- graeme 5y ago
  The existing financial system already lets you take out loans against houses, stocks, etc. How is this different?
  - wickoff 5y ago
    Global availability, no questions about the purpose of the loan, not difference in rates depending on purpose, transparency enforced by a smart contract, no hidden fees or upfront costs.
    - graeme 5y ago
      > Global availability Good in theory, but how much does this matter to anyone in a country with a functional financial system? I have access to many loan products > not difference in rates depending on purpose Isn’t this bad for borrowers with valuable purposes or good credit? They’d potentially expect higher rates. > transparency enforced by a smart contract For most people this is akin to saying “you can examine the code yourself!” Most people can’t do that. And it’s not especially difficult to read a loan contract, if you would have the ability to understand a smart contract. How many people taking crypto loans have no idea about liquidation, or capital gains tax obligations in the event of liquidation? > no hidden fees See previous question: it seems like for many sudden liquidation or owing capital gains tax in such an event may be unexpected. > upfront costs Loans normally don’t have upfront costs. The loans seem neat for bringing collateralized lending to crypto, but it doesn’t seem like you’d have much advantage in selling stock and moving to crypto for loans. Or am I missing something?