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I was in crypto for part of the run earlier this year, but ended up selling it all as I reached a very similar conclusion to the author. Basically ask yourself

I was in crypto for part of the run earlier this year, but ended up selling it all as I reached a very similar conclusion to the author. Basically ask yourself this. If there is a market panic, or people just decide to sell for whatever reason, what is the logically lowest price bitcoin can go to? The answer, of course, is 0. There's 0 intrinsic value or math you can do to justify one price over another. Can you explain to me why Bitcoin should be worth 50k and not 10k? The stock market can crash too, and prices can fall below intrinsic value for a time... but you have plenty of math and formulas you can use to assign an intrinsic value to equities. Sometimes the market bubbles up, but in the long run it always tends to revert to some mean of fair valuation. There is no mean of fair valuation for cryptos. Another thing that's difficult to get around is application of the block chain. I can buy that there could be an "open source" ecosystem of finance, but where is it? Almost all Defi stuff only makes sense in the context of crypto... e.g. get interest on this coin by lending to somebody else, but the coin still has inherently 0 value. Would be nice to see some inkling of any value that can be directly tied to the real world. Anyone aware of meaningful projects with an actual substantial impact, that can't be solved better through other means? Not toy projects, but an actual gamechanging application in finance? I can buy that Bitcoin could act as a deflationary sort of money. But the value of bitcoin can't really be stable unless it's actually used as a widespread medium of exchange. I don't buy OPs arguments about central banks... central banks are a large part of why cryptos are so popular. They've horrendously extended the scope of their mandate and abused their powers. Part of bitcoin's popularity is to try to escape the overreaching central banks. The closest analogue is Gold. Gold actually has many powerful chemical properties, but is too scarce to use for industrial production by and large (outside of trace amounts). Yet people have used it as a store of wealth for thousands of years. Because of this, I think bitcoin could have potential long term. But gold is physical, so it's not prone to panic selling. You have to physically transfer it to somebody else, so it's more protected from flash crashes that crypto is prone to. Yes, there are gold derivatives that are traded, but they reflect a real good underneath. At the end of the day, why are 90% of people in crypto? They're doing it to speculate and make money, not for practical reasons where holding crypto actually tangibly improves their lives (via some utility of it). I don't think prices will ever be stable while that's the case.

delabay 5y ago
Helium has built the largest contiguous wireless network using a crypto incentive model. They have started with LoRaWAN and are moving into 5G neutral hosting using CBRS spectrum. Helium effectively solves the chicken and egg problem in wireless network infra. The protocol pays users for providing provably useful wireless coverage, allowing time for demand to catch up and eventually fund the operation of nodes.
- adam_arthur 5y ago
  Interesting, I'll have to read more into it. So what role does the crypto play in this model... Is it just a payment method? If so, where is the tangible value add of crypto, versus paying in currency? Or is the idea that the public finances the project by assigning some value to the token? Thus creators need no capital to start, public finances project by determining a free market value for the token. If so, that's just following the pyramid scheme-esque pattern described before.
  - delabay 5y ago
    The crypto value add is early adopter rewards as well as settlement when using the network. So, you basically captured it in your post. If the initial conditions are structured properly it becomes a virtuous cycle. You can call it a pyramid scheme, but you should also acknowledge it solved a real world problem. Many old school players have failed to do literally the same thing with Lorawan...raise money...hire a team...find installers...make agreement with vertical asset owners...find customers... etc. Helium is a team of a few dozen accomplishing success 100x bigger than teams of 1000 doing it the old way.
    - adam_arthur 5y ago
      I just spent a few minutes reading into it, will have to explore more. Certainly the tech/presentation is pretty slick. So somebody can buy a miner/access point of sorts to publish a hotspot. They get rewarded with these HNT tokens for providing this service. But what gives the HNT token value... is the value purely driven by speculators? That's where it starts to fall apart for me. How can that be a sustainable model in the long run? I guess for this project, the cost to run the miner is relatively low, so even if the value of the tokens are purely speculative, you'll still get people setting up access points for a chance at the lottery ticket. In that sense, this seems like a good application. I can see crypto having tangible value for these kind of cases, where you need many people to participate in a network, and the cost of entering is somewhat low. Having that small additional incentive/lottery ticket motivates people to take the small effort to set it up. But I don't know how stable this model will be in the long run. If crypto crashes, will the network stay maintained, or fall into disrepair? I just looked at some of the miners, and the cost goes up to 1k USD, which is kinda nuts. The token price would have to support the unit economics of that... which I doubt will continue in perpetuity. These kind of projects would work better in the long run as charities where people really understand the intent of participating, rather than strictly speculating, which is likely not going to be long lasting. Having a crypto/token kind of obfuscates what the long run reward will be, which does incentivize participation, for sure.

delabay 5y ago

Helium has built the largest contiguous wireless network using a crypto incentive model. They have started with LoRaWAN and are moving into 5G neutral hosting using CBRS spectrum. Helium effectively solves the chicken and egg problem in wireless network infra. The protocol pays users for providing provably useful wireless coverage, allowing time for demand to catch up and eventually fund the operation of nodes.

adam_arthur 5y ago
Interesting, I'll have to read more into it. So what role does the crypto play in this model... Is it just a payment method? If so, where is the tangible value add of crypto, versus paying in currency? Or is the idea that the public finances the project by assigning some value to the token? Thus creators need no capital to start, public finances project by determining a free market value for the token. If so, that's just following the pyramid scheme-esque pattern described before.
- delabay 5y ago
  The crypto value add is early adopter rewards as well as settlement when using the network. So, you basically captured it in your post. If the initial conditions are structured properly it becomes a virtuous cycle. You can call it a pyramid scheme, but you should also acknowledge it solved a real world problem. Many old school players have failed to do literally the same thing with Lorawan...raise money...hire a team...find installers...make agreement with vertical asset owners...find customers... etc. Helium is a team of a few dozen accomplishing success 100x bigger than teams of 1000 doing it the old way.
  - adam_arthur 5y ago
    I just spent a few minutes reading into it, will have to explore more. Certainly the tech/presentation is pretty slick. So somebody can buy a miner/access point of sorts to publish a hotspot. They get rewarded with these HNT tokens for providing this service. But what gives the HNT token value... is the value purely driven by speculators? That's where it starts to fall apart for me. How can that be a sustainable model in the long run? I guess for this project, the cost to run the miner is relatively low, so even if the value of the tokens are purely speculative, you'll still get people setting up access points for a chance at the lottery ticket. In that sense, this seems like a good application. I can see crypto having tangible value for these kind of cases, where you need many people to participate in a network, and the cost of entering is somewhat low. Having that small additional incentive/lottery ticket motivates people to take the small effort to set it up. But I don't know how stable this model will be in the long run. If crypto crashes, will the network stay maintained, or fall into disrepair? I just looked at some of the miners, and the cost goes up to 1k USD, which is kinda nuts. The token price would have to support the unit economics of that... which I doubt will continue in perpetuity. These kind of projects would work better in the long run as charities where people really understand the intent of participating, rather than strictly speculating, which is likely not going to be long lasting. Having a crypto/token kind of obfuscates what the long run reward will be, which does incentivize participation, for sure.