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Looks like cryptocurrencies are not very innovative. They keep reinstalling all the features that have been there and improved in the regular markets. Tether an

by yawaworht1978 5y ago

Looks like cryptocurrencies are not very innovative. They keep reinstalling all the features that have been there and improved in the regular markets. Tether and stablecoins mimicking the USD, now this stuff mimicking stocks, how are the not getting in trouble with government institutions or Apple? What are the loopholes? No existing laws yet? Or they operate and reside in far away jurisdictions?

elliekelly 5y ago
A crypto-token tracking the listed security of a company that is itself so heavily invested in crypto that the security price more or less tracks with crypto reminds me of the new new internet from Silicon Valley.
delusional 5y ago
I don't think there's any political interest in looking at them right now. It's largely just a bunch of nerds playing with pretend money. It hasn't really hurt anybody outside of it yet.
- iseethroughbs 5y ago
  This pretend money is currently the main driving mechanism behind the unprecedented business hacking and ransomware wave.
  - yawaworht1978 5y ago
    And for things like paying for ddos attacks and money laundering in general. Ah yes, and the classic all things dark web. There is not one use case except speculation for people who are not amongst the non law abiding elements of society.
    - arcticbull 5y ago
      There's always speculation. But yeah, definitely nothing else.
  - meowkit 5y ago
    I prefer to look at it as crypto is exposing a market that wasn’t visible - companies need to invest in their security and 3rd party software needs to be better vetted.
- SkyMarshal 5y ago
  That's true, though govts are definitely looking at them. On one hand, the crypto-economy is still too small to represent the same kind of systemic risk that took down the banking system in 2007/8, so there's less urgency to do anything about it. Additionally, both governments and regulators, in the US at least, tend to prefer to let new technologies incubate and evolve for a time before regulating it more strictly. On the other hand, it's too small to have the armies of lawyers defending it that the banking system does, so it's an easier target for regulators looking for wins than Wall Street is. The SEC, CFTC, Treasury are all looking at it in the US and doing some triage regulation, only going after the most blatant and worst problems atm. I'm sure they'll step it up if/when the crypto-economy continues to grow.
  - dcolkitt 5y ago
    It doesn’t matter. Anything running on the blockchain has no single point of failure. Let’s say the government outlaws Uniswap tomorrow and throws the entire team in Supermax prison for life. The protocol will just keep running forever. There’s nothing that can be done unless the government can shut down every Ethereum node in the world. Even “outlawing” Ethereum in the US wouldn’t work, unless they put in a Chinese style Internet firewall.
- ArkanExplorer 5y ago
  We still have widespread chip and computer shortages, and in some regions of the world electricity shortages, because of the amount of silicon and energy being wasted on mining.
elevenoh 5y ago
crypto already allows one to buy AAPL token, privately, at 3am EST, for a ~$.1-$5 tx fee. Not bad for the 1st decade of a long story.
- rank0 5y ago
  Except you aren’t actually buying ownership of AAPL. You don’t get any voting power or dividends. You are buying a token that the creator pinky promises are worth/redeemable for x shares of AAPL. Those AAPL tokens are not insured by the SIPC…
  - X6S1x6Okd1st 5y ago
    Nope these are not redeemable for AAPL. They are synthetic assets that track the price. The fact that there are no dividends or voting rights means they should be worth less for anyone that can purchase the actual asset.
    - tomc1985 5y ago
      So then what is driving price action? How will they reconcile when the crypto doesn't track the actual security?
      - X6S1x6Okd1st 5y ago
        I'm not super familiar with this project, but it's described here: https://docs.synthetix.io/litepaper https://docs.synthetix.io/litepaper
  - elevenoh 5y ago
    Of course not. But AAPL price futures satisfy the consumer desire here.
aewct 5y ago
From TFA: > Users can trade the tokens anonymously 24 hours a day, seven days a week, from anywhere, unhindered by capital controls, “know your client” rules imposed on broker-dealers, and other frictions of the traditional financial system. These are certainly new innovations and features, be they good or bad.
- yawaworht1978 5y ago
  Oh my, they cal KYC "friction", that is indeed creative writing.
  - aewct 5y ago
    An OS asking you to confirm that you want to delete a file is also friction. Like KYC, it is a positive, but friction nonetheless. In context, they also mention traditional markets being closed at certain days and times. This is also friction, but negative.
  - baby 5y ago
    How is it not friction?
    - verdverm 5y ago
      It's a law that requires financial institutions to "Know Their Customer" in order to operate legally. It's a reasonable law. Following existing regulations will be needed for crypto to have a chance at being mainstream
      - rawtxapp 5y ago
        Or arguably, it's burdening 99% of legitimate users to stop the 1% of bad actors.
        rwallace 5y ago
        Yep. It's burdening 99% of legitimate users with a very minor inconvenience, to stop the 1% of bad actors who would otherwise end up doing a lot of really bad things that would harm the 99% in ways that go far outside the scope we think of as covered by the financial system. So yes, I understand where you're coming from, but my libertarian instincts to reflexively think of KYC/AML as excessive and annoying regulation and untrammeled exchange as a good thing, turn out on closer examination to be simply wrong.
baby 5y ago
I’m not sure how you’re getting to “not innovative”.
- ac29 5y ago
  The market described by the article is basically a textbook example of a bucket shop. The only difference is "but, with cryptocurrency".
- quickthrowman 5y ago
  19th century-Bucket Shop 20th century-Contract for Difference 21st century-Tokenized uh stocks This is not a new idea
  - ArkanExplorer 5y ago
    https://en.wikipedia.org/wiki/Bucket_shop_(stock_market) https://en.wikipedia.org/wiki/Bucket_shop_(stock_market) "In a form of what is now considered illegal front running and self-dealing, a bucket shop holding a large position on a stock, and knowing a client's vulnerable margin, might sell the stock on the real stock exchange, causing the price on the ticker tape to momentarily move down enough to exhaust the client's margins. Through its opportunistic actions, the bucket shop thereby gains 100% of the client's investment. The term bucket shop came to apply to other types of scams, some of which are still practiced. They were typically small store front operations that catered to the small investor, where speculators could bet on price fluctuations during market hours. However, no actual shares were bought or sold: all trading was between the bucket shop and its clients. The bucket shop made its profit from commissions, and also profited when share prices went against the client. Bucket shops were made illegal after they were cited as a major contributor to the two stock market crashes in the early 1900s."
- steveBK123 5y ago
  https://en.wikipedia.org/wiki/Reminiscences_of_a_Stock_Operator https://en.wikipedia.org/wiki/Reminiscences_of_a_Stock_Opera...
X6S1x6Okd1st 5y ago
The fact that these offerings are non-custodial is innovative, as is the fact that they are always open (albeit if there's high demand the fees may be high enough to be prohibitive) FDIC & regulation kind of makes it so for most people most of the time it doesn't matter that banks are custodial. Offering these services without being custodial is innovative though. EDIT: The other major (IMO) innovative piece is the permissionlessness. zapper.fi is a great example of being able to build something that adds lots of value (given you've already bought into crypto & defi) without needing anyone's permission to integrate into their systems.
- lottin 5y ago
  > FDIC & regulation kind of makes it so for most people most of the time it doesn't matter that banks are custodial. Non-custodial means the owner is responsible for protecting the asset from theft and operational risks. Nobody wants that, especially not in the case of digital assets, which aren't governed by property rights and instead rely entirely on effective control of the asset to determine who "owns" it.
  - X6S1x6Okd1st 5y ago
    Do you really believe no one wants non-custodial financial services?
    - lottin 5y ago
      I already explained why non-custody is a dumb anti-feature that only appeals to a small number of conspiracy theorists who haven't really thought things through.
      - X6S1x6Okd1st 5y ago
        Explaining something doesn't make it so and usually it doesn't do much to convince people of it especially when you are so clearly condescending.
DennisP 5y ago
I haven't seen anything like Uniswap in the regular markets.
- rank0 5y ago
  What do you mean? There are absolutely currency exchanges and lenders in the current financial system.
  - meowkit 5y ago
    Either you’re being intentionally obtuse or don’t know what Uniswap is. Decentralized, automatic trading that can route liquidity for direct asset swapping does not exist in traditional finance for retail investors.
    - rank0 5y ago
      If you take away all the buzzwords you’ll notice that the core utility of uniswap is the “decentralization” of services which are offered by the traditional finance system. Yes it’s far easier for retail investors to play the role of the market maker but the financial services themselves are the same. Also realize that if defi becomes mainstream retail will still be pushed out by institutions as yields approach zero. OP says “nothing like uniswap exists” but the goal is literally to democratize lending, market making, and currency exchange. (All of which exist in centralized forms)
      - dkshdkjshdk 5y ago
        > If you take away all the buzzwords you’ll notice that the core utility of uniswap is the “decentralization” of services which are offered by the traditional finance system. If I contact my bank, will they allow me to become a liquidity provider for USD-EUR pair and give me a cut of USD-EUR exchanges that they make? If not, which traditional financial institution do I have to contact for this? Actually, I would be ok if you could point me to a bank that provides positive yield (or at least nonnegative yield) if I deposit my money there. Is there a traditional financial institution that can provide me with some sort of working "savings" solution... If there is, please let me know, because I'm looking for one. The way I see it, entities like Uniswap/AAVE/etc. are surely emulating aspects of the traditional finance system, but are not exactly redundant. Perhaps if banks start offering positive interest rates on deposits (not even above inflation... just positive), I'll change my mind.
gruez 5y ago
>Looks like cryptocurrencies are not very innovative T+0 settlement seems pretty innovative to me, especially in light of the GME fiasco.
- kristjansson 5y ago
  T+0 settlement of an asset that’s only tangentially related to the one you’re interested in is ... better I guess?

elliekelly 5y ago

A crypto-token tracking the listed security of a company that is itself so heavily invested in crypto that the security price more or less tracks with crypto reminds me of the new new internet from Silicon Valley.

delusional 5y ago

I don't think there's any political interest in looking at them right now. It's largely just a bunch of nerds playing with pretend money. It hasn't really hurt anybody outside of it yet.

iseethroughbs 5y ago
This pretend money is currently the main driving mechanism behind the unprecedented business hacking and ransomware wave.
- yawaworht1978 5y ago
  And for things like paying for ddos attacks and money laundering in general. Ah yes, and the classic all things dark web. There is not one use case except speculation for people who are not amongst the non law abiding elements of society.
  - arcticbull 5y ago
    There's always speculation. But yeah, definitely nothing else.
- meowkit 5y ago
  I prefer to look at it as crypto is exposing a market that wasn’t visible - companies need to invest in their security and 3rd party software needs to be better vetted.
SkyMarshal 5y ago
That's true, though govts are definitely looking at them. On one hand, the crypto-economy is still too small to represent the same kind of systemic risk that took down the banking system in 2007/8, so there's less urgency to do anything about it. Additionally, both governments and regulators, in the US at least, tend to prefer to let new technologies incubate and evolve for a time before regulating it more strictly. On the other hand, it's too small to have the armies of lawyers defending it that the banking system does, so it's an easier target for regulators looking for wins than Wall Street is. The SEC, CFTC, Treasury are all looking at it in the US and doing some triage regulation, only going after the most blatant and worst problems atm. I'm sure they'll step it up if/when the crypto-economy continues to grow.
- dcolkitt 5y ago
  It doesn’t matter. Anything running on the blockchain has no single point of failure. Let’s say the government outlaws Uniswap tomorrow and throws the entire team in Supermax prison for life. The protocol will just keep running forever. There’s nothing that can be done unless the government can shut down every Ethereum node in the world. Even “outlawing” Ethereum in the US wouldn’t work, unless they put in a Chinese style Internet firewall.
ArkanExplorer 5y ago
We still have widespread chip and computer shortages, and in some regions of the world electricity shortages, because of the amount of silicon and energy being wasted on mining.

elevenoh 5y ago

crypto already allows one to buy AAPL token, privately, at 3am EST, for a ~$.1-$5 tx fee. Not bad for the 1st decade of a long story.

rank0 5y ago
Except you aren’t actually buying ownership of AAPL. You don’t get any voting power or dividends. You are buying a token that the creator pinky promises are worth/redeemable for x shares of AAPL. Those AAPL tokens are not insured by the SIPC…
- X6S1x6Okd1st 5y ago
  Nope these are not redeemable for AAPL. They are synthetic assets that track the price. The fact that there are no dividends or voting rights means they should be worth less for anyone that can purchase the actual asset.
  - tomc1985 5y ago
    So then what is driving price action? How will they reconcile when the crypto doesn't track the actual security?
    - X6S1x6Okd1st 5y ago
      I'm not super familiar with this project, but it's described here: https://docs.synthetix.io/litepaper https://docs.synthetix.io/litepaper
- elevenoh 5y ago
  Of course not. But AAPL price futures satisfy the consumer desire here.

aewct 5y ago

From TFA: > Users can trade the tokens anonymously 24 hours a day, seven days a week, from anywhere, unhindered by capital controls, “know your client” rules imposed on broker-dealers, and other frictions of the traditional financial system. These are certainly new innovations and features, be they good or bad.

yawaworht1978 5y ago
Oh my, they cal KYC "friction", that is indeed creative writing.
- aewct 5y ago
  An OS asking you to confirm that you want to delete a file is also friction. Like KYC, it is a positive, but friction nonetheless. In context, they also mention traditional markets being closed at certain days and times. This is also friction, but negative.
- baby 5y ago
  How is it not friction?
  - verdverm 5y ago
    It's a law that requires financial institutions to "Know Their Customer" in order to operate legally. It's a reasonable law. Following existing regulations will be needed for crypto to have a chance at being mainstream
    - rawtxapp 5y ago
      Or arguably, it's burdening 99% of legitimate users to stop the 1% of bad actors.
      - rwallace 5y ago
        Yep. It's burdening 99% of legitimate users with a very minor inconvenience, to stop the 1% of bad actors who would otherwise end up doing a lot of really bad things that would harm the 99% in ways that go far outside the scope we think of as covered by the financial system. So yes, I understand where you're coming from, but my libertarian instincts to reflexively think of KYC/AML as excessive and annoying regulation and untrammeled exchange as a good thing, turn out on closer examination to be simply wrong.

baby 5y ago

I’m not sure how you’re getting to “not innovative”.

ac29 5y ago
The market described by the article is basically a textbook example of a bucket shop. The only difference is "but, with cryptocurrency".
quickthrowman 5y ago
19th century-Bucket Shop 20th century-Contract for Difference 21st century-Tokenized uh stocks This is not a new idea
- ArkanExplorer 5y ago
  https://en.wikipedia.org/wiki/Bucket_shop_(stock_market) https://en.wikipedia.org/wiki/Bucket_shop_(stock_market) "In a form of what is now considered illegal front running and self-dealing, a bucket shop holding a large position on a stock, and knowing a client's vulnerable margin, might sell the stock on the real stock exchange, causing the price on the ticker tape to momentarily move down enough to exhaust the client's margins. Through its opportunistic actions, the bucket shop thereby gains 100% of the client's investment. The term bucket shop came to apply to other types of scams, some of which are still practiced. They were typically small store front operations that catered to the small investor, where speculators could bet on price fluctuations during market hours. However, no actual shares were bought or sold: all trading was between the bucket shop and its clients. The bucket shop made its profit from commissions, and also profited when share prices went against the client. Bucket shops were made illegal after they were cited as a major contributor to the two stock market crashes in the early 1900s."
steveBK123 5y ago
https://en.wikipedia.org/wiki/Reminiscences_of_a_Stock_Operator https://en.wikipedia.org/wiki/Reminiscences_of_a_Stock_Opera...

X6S1x6Okd1st 5y ago

The fact that these offerings are non-custodial is innovative, as is the fact that they are always open (albeit if there's high demand the fees may be high enough to be prohibitive) FDIC & regulation kind of makes it so for most people most of the time it doesn't matter that banks are custodial. Offering these services without being custodial is innovative though. EDIT: The other major (IMO) innovative piece is the permissionlessness. zapper.fi is a great example of being able to build something that adds lots of value (given you've already bought into crypto & defi) without needing anyone's permission to integrate into their systems.

lottin 5y ago
> FDIC & regulation kind of makes it so for most people most of the time it doesn't matter that banks are custodial. Non-custodial means the owner is responsible for protecting the asset from theft and operational risks. Nobody wants that, especially not in the case of digital assets, which aren't governed by property rights and instead rely entirely on effective control of the asset to determine who "owns" it.
- X6S1x6Okd1st 5y ago
  Do you really believe no one wants non-custodial financial services?
  - lottin 5y ago
    I already explained why non-custody is a dumb anti-feature that only appeals to a small number of conspiracy theorists who haven't really thought things through.
    - X6S1x6Okd1st 5y ago
      Explaining something doesn't make it so and usually it doesn't do much to convince people of it especially when you are so clearly condescending.

DennisP 5y ago

I haven't seen anything like Uniswap in the regular markets.

rank0 5y ago
What do you mean? There are absolutely currency exchanges and lenders in the current financial system.
- meowkit 5y ago
  Either you’re being intentionally obtuse or don’t know what Uniswap is. Decentralized, automatic trading that can route liquidity for direct asset swapping does not exist in traditional finance for retail investors.
  - rank0 5y ago
    If you take away all the buzzwords you’ll notice that the core utility of uniswap is the “decentralization” of services which are offered by the traditional finance system. Yes it’s far easier for retail investors to play the role of the market maker but the financial services themselves are the same. Also realize that if defi becomes mainstream retail will still be pushed out by institutions as yields approach zero. OP says “nothing like uniswap exists” but the goal is literally to democratize lending, market making, and currency exchange. (All of which exist in centralized forms)
    - dkshdkjshdk 5y ago
      > If you take away all the buzzwords you’ll notice that the core utility of uniswap is the “decentralization” of services which are offered by the traditional finance system. If I contact my bank, will they allow me to become a liquidity provider for USD-EUR pair and give me a cut of USD-EUR exchanges that they make? If not, which traditional financial institution do I have to contact for this? Actually, I would be ok if you could point me to a bank that provides positive yield (or at least nonnegative yield) if I deposit my money there. Is there a traditional financial institution that can provide me with some sort of working "savings" solution... If there is, please let me know, because I'm looking for one. The way I see it, entities like Uniswap/AAVE/etc. are surely emulating aspects of the traditional finance system, but are not exactly redundant. Perhaps if banks start offering positive interest rates on deposits (not even above inflation... just positive), I'll change my mind.

gruez 5y ago

>Looks like cryptocurrencies are not very innovative T+0 settlement seems pretty innovative to me, especially in light of the GME fiasco.

kristjansson 5y ago
T+0 settlement of an asset that’s only tangentially related to the one you’re interested in is ... better I guess?