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Crypto has only existed during the greatest and longest bull market of all time. Jury is still out on whether it can survive a prolonged bear market. Web3 cons

Crypto has only existed during the greatest and longest bull market of all time. Jury is still out on whether it can survive a prolonged bear market. Web3 consequently is also bound by this. If people are still interested in Web3 when crypto goes down 10% YoY forever then maybe there’s some inherent value there.

PaulDavisThe1st 5y ago
in theory, web3 has nothing to do with cryptocurrency per se, and only relies on some blockchain technology, which is itself not bound to the value of the currency it is used by. however, the fact that too many people seem to think that there is in fact a connection between web3 and cryptocurrency just adds to the smell.
- hervature 5y ago
  How do you reconcile the fact that most of Web3 is built on Ethereum which only works because miners ("soon to be" stakers) are rewarded for running the blockchain?
  - flokie 5y ago
    this. the incentives are bound by the underlying tech.
  - Tenoke 5y ago
    There's more and more being built outside of Ethereum and the dominance has been shrinking. As to how I explain the dominance - shrinking first mover advantage.
    - spmurrayzzz 5y ago
      even for the other DVM-eqsue networks (solana, avalanche, et al), they still have the same constraint. the incentive to secure the network (either through PoW or PoS) is inherently tied to the underlying tokenomics, the currency has to have some value for the consensus mechanism to be successful.
    - capableweb 5y ago
      > the dominance has been shrinking According to what? According to the global charts on Coinmarketcap, Ethereum is still around 20% of the total marketcap of cryptocurrencies (BTC being at ~40%) today, coming from growth since January 2020 (where Ethereum started at ~7.5%). By that metric, Ethereum seems to be growing, but you might have a better source/metric to share?
- thebean11 5y ago
  Currency is actually a core part of it. The point of web3 is software that can natively move money around. That "money" does not need to be ETH or BTC though, can be tokens pegged to the dollar or gold or oil etc.
  - Duckton 5y ago
    Is it thought? Can’t web3 be, for an example, patient health data in a ledger? Who says it has to be tied to a monetary value?
    - thebean11 5y ago
      I think that's the killer feature personally (I work in the space). It has uses for censorship resistant communication and things like identity. Not sure if I see the use case in health data though.
      - AlexandrB 5y ago
        AFAIK all transactions on a blockchain require spending some associated currency (e.g. "gas fees"). For investors, I think the killer feature is being able to make money off of every transaction involving identity and health data.
        thebean11 5y ago
        Yes, the gas fees would be very expensive in the current state (think hundreds to thousands of dollars for a regular appointment, tens of thousands for an x-ray). There would have to be some benefit for healthcare providers to pay that and I don't see what that is..
        Duckton 5y ago
        Maybe not the healthcare provider, but a service that allows the patient to be in control of their health records. Control who can read and write to their own data. And is it not up to the implementor of the blockchain, to specify how difficult it is to calculate a new block? So lowering the "gas price"?
- romeros 5y ago
  In practice, everything is indirectly tied to making more money 100x your "investment" in a blink of an eye. If the entire crypto/defi/nft/gamefi/play2earn etc marketcap was 0 then nobody would even bother with interacting/developing with web3. In-fact, nobody would even be interested in blockchain tech.
  - capableweb 5y ago
    Why are you assuming that just because something doesn't involve money, people wouldn't be interested in it? Music creation is for most people just a hobby, with zero financial incentives to engage in, yet countless amount of people make music as a hobby and release it for free via various channels. Same goes for software with free/open source software. Not to talk about BitTorrent (or it's predecessors in the P2P space) where people had the opinion of "sharing is caring" and shared data with each other, again with zero financial incentives. How do you reconcile these facts with your outlook?
    - acdha 5y ago
      > Why are you assuming that just because something doesn't involve money, people wouldn't be interested in it? Because random hashes are not inherently interesting to most people and the core concept is built around an opinionated finance model. The only value to the blockchain network is in the ability to make transactions, and that's why all of the push around it is very heavy-handed FOMO “buy now or you'll have to pay more later” which is a sharp contrast to previous new technologies which focused on what new things you could do.
    - danaris 5y ago
      But cryptocurrency has no value or meaning if it's not worth money. That's not true of those other things.
    - AlexandrB 5y ago
      I'm sure that some people would continue to run crypto nodes if it was not profitable, but the number of people doing so would drop precipitously. There's a huge portion of the crypto community (90%? 95%?) that are in it for the ROI and speculative gambling, not for running a decentralized web. As an example, I suspect no one would buy old power plants and turn them into Bitcoin miners if there was no return on investment. The operating costs of this kind of infrastructure are too high to justify as a "hobby".
option_greek 5y ago
But then jury is out on whether there will ever be a bear market (or in other words will the central banks ever allow one). Also whether anything else (real estate, stocks or other assets) can survive it.
- endisneigh 5y ago
  Most highly valued assets have intrinsic value. The jury isn’t out on real estate surviving a bear market at all. Currently it’s unknown if crypto has intrinsic value. It certainly has extrinsic value, though.
  - option_greek 5y ago
    It's not a given that real estate has intrinsic value. Sure properties which are in high demand today will continue to do so tomorrow. But not all properties are like that. You can look at several foreclosed properties in 2008 bubble. Many continue to be in rundown state (both commercial and residential). Because the costs of renovation, taxes, utilities, insurances when included makes the property a losing proposition.
streptomycin 5y ago
https://i.imgur.com/BVoYAo6.png https://i.imgur.com/BVoYAo6.png was this a prolonged bear market?
- xboxnolifes 5y ago
  Looking at the price of BTC and calling it a bear market is like looking at a single stock price and claiming a bear market.
  - streptomycin 5y ago
    Please tell me what cryptocurrencies existed in 2017 with prices that were not highly correlated to BTC.
    - xboxnolifes 5y ago
      I'm trying to tell you that that you can't just look at cryptocurrency and claim a bear market. Same way it's not a bull market if one individual sector is down. Cryptocurrency, because it's also seen as an investment, must also take into mind other investment options. Particularly another common option: stocks. One may claim that cryptocurrency has survived many bear markets if you only look at cryptocurrency. Someone else may claim that the only reason cryptocurrency hasn't died out is because it's standing on the shoulders of the longest running bull market in history when looking at stocks. There is so much money and confidence about that people are just looking for places to park it. The question is: Does cryptocurrency remain when the fun and games end, or was it just tulips?
- endisneigh 5y ago
  No, nor was it prolonged.
  - deleted 5y ago
    [deleted]
- nawgz 5y ago
steelstraw 5y ago
Crypto has famously gone through several bear markets though and a bunch of 80% corrections.
- alar44 5y ago
  Several?? We haven't had a bear market in 10 years.
  - steelstraw 5y ago
    In crypto, yes. There have been years (2014 - 2016, 2018 - 2020) where the market fell down and hibernated.
- devoutsalsa 5y ago
  Crypto winter is coming.
- endisneigh 5y ago
  A correction isn’t a prolonged bear market. Regardless, the period of 2010 to date has effectively been a prolonged bull run.
- nikanj 5y ago
  Fortunately crypto has no fundamentals, so it can't really fail financially. There's absolutely no business whatsoever, so there is no worry of the business running out of funds and thus forcing crypto into chapter 11. The stock price can drop to 0, and it would be ok. There's no stores to close due to unpaid rents, no workers to furlough, etc. In a weird way it's immortal.
  - ProAm 5y ago
    They would become beanie babies.
  - hervature 5y ago
    It is definitely not immortal. If the price goes to 0, then miners have 0 incentive to keep the blockchain going. More realistically, once the price is sufficiently low and 51% attacks become viable, it has effectively died.
pessimizer 5y ago
> Jury is still out on whether it can survive a prolonged bear market. One thing we know for sure is that it ain't gold since it moves with the market rather than against it.

PaulDavisThe1st 5y ago

in theory, web3 has nothing to do with cryptocurrency per se, and only relies on some blockchain technology, which is itself not bound to the value of the currency it is used by. however, the fact that too many people seem to think that there is in fact a connection between web3 and cryptocurrency just adds to the smell.

hervature 5y ago
How do you reconcile the fact that most of Web3 is built on Ethereum which only works because miners ("soon to be" stakers) are rewarded for running the blockchain?
- flokie 5y ago
  this. the incentives are bound by the underlying tech.
- Tenoke 5y ago
  There's more and more being built outside of Ethereum and the dominance has been shrinking. As to how I explain the dominance - shrinking first mover advantage.
  - spmurrayzzz 5y ago
    even for the other DVM-eqsue networks (solana, avalanche, et al), they still have the same constraint. the incentive to secure the network (either through PoW or PoS) is inherently tied to the underlying tokenomics, the currency has to have some value for the consensus mechanism to be successful.
  - capableweb 5y ago
    > the dominance has been shrinking According to what? According to the global charts on Coinmarketcap, Ethereum is still around 20% of the total marketcap of cryptocurrencies (BTC being at ~40%) today, coming from growth since January 2020 (where Ethereum started at ~7.5%). By that metric, Ethereum seems to be growing, but you might have a better source/metric to share?
thebean11 5y ago
Currency is actually a core part of it. The point of web3 is software that can natively move money around. That "money" does not need to be ETH or BTC though, can be tokens pegged to the dollar or gold or oil etc.
- Duckton 5y ago
  Is it thought? Can’t web3 be, for an example, patient health data in a ledger? Who says it has to be tied to a monetary value?
  - thebean11 5y ago
    I think that's the killer feature personally (I work in the space). It has uses for censorship resistant communication and things like identity. Not sure if I see the use case in health data though.
    - AlexandrB 5y ago
      AFAIK all transactions on a blockchain require spending some associated currency (e.g. "gas fees"). For investors, I think the killer feature is being able to make money off of every transaction involving identity and health data.
      - thebean11 5y ago
        Yes, the gas fees would be very expensive in the current state (think hundreds to thousands of dollars for a regular appointment, tens of thousands for an x-ray). There would have to be some benefit for healthcare providers to pay that and I don't see what that is..
        Duckton 5y ago
        Maybe not the healthcare provider, but a service that allows the patient to be in control of their health records. Control who can read and write to their own data. And is it not up to the implementor of the blockchain, to specify how difficult it is to calculate a new block? So lowering the "gas price"?
romeros 5y ago
In practice, everything is indirectly tied to making more money 100x your "investment" in a blink of an eye. If the entire crypto/defi/nft/gamefi/play2earn etc marketcap was 0 then nobody would even bother with interacting/developing with web3. In-fact, nobody would even be interested in blockchain tech.
- capableweb 5y ago
  Why are you assuming that just because something doesn't involve money, people wouldn't be interested in it? Music creation is for most people just a hobby, with zero financial incentives to engage in, yet countless amount of people make music as a hobby and release it for free via various channels. Same goes for software with free/open source software. Not to talk about BitTorrent (or it's predecessors in the P2P space) where people had the opinion of "sharing is caring" and shared data with each other, again with zero financial incentives. How do you reconcile these facts with your outlook?
  - acdha 5y ago
    > Why are you assuming that just because something doesn't involve money, people wouldn't be interested in it? Because random hashes are not inherently interesting to most people and the core concept is built around an opinionated finance model. The only value to the blockchain network is in the ability to make transactions, and that's why all of the push around it is very heavy-handed FOMO “buy now or you'll have to pay more later” which is a sharp contrast to previous new technologies which focused on what new things you could do.
  - danaris 5y ago
    But cryptocurrency has no value or meaning if it's not worth money. That's not true of those other things.
  - AlexandrB 5y ago
    I'm sure that some people would continue to run crypto nodes if it was not profitable, but the number of people doing so would drop precipitously. There's a huge portion of the crypto community (90%? 95%?) that are in it for the ROI and speculative gambling, not for running a decentralized web. As an example, I suspect no one would buy old power plants and turn them into Bitcoin miners if there was no return on investment. The operating costs of this kind of infrastructure are too high to justify as a "hobby".

option_greek 5y ago

But then jury is out on whether there will ever be a bear market (or in other words will the central banks ever allow one). Also whether anything else (real estate, stocks or other assets) can survive it.

endisneigh 5y ago
Most highly valued assets have intrinsic value. The jury isn’t out on real estate surviving a bear market at all. Currently it’s unknown if crypto has intrinsic value. It certainly has extrinsic value, though.
- option_greek 5y ago
  It's not a given that real estate has intrinsic value. Sure properties which are in high demand today will continue to do so tomorrow. But not all properties are like that. You can look at several foreclosed properties in 2008 bubble. Many continue to be in rundown state (both commercial and residential). Because the costs of renovation, taxes, utilities, insurances when included makes the property a losing proposition.

streptomycin 5y ago

https://i.imgur.com/BVoYAo6.png https://i.imgur.com/BVoYAo6.png was this a prolonged bear market?

xboxnolifes 5y ago
Looking at the price of BTC and calling it a bear market is like looking at a single stock price and claiming a bear market.
- streptomycin 5y ago
  Please tell me what cryptocurrencies existed in 2017 with prices that were not highly correlated to BTC.
  - xboxnolifes 5y ago
    I'm trying to tell you that that you can't just look at cryptocurrency and claim a bear market. Same way it's not a bull market if one individual sector is down. Cryptocurrency, because it's also seen as an investment, must also take into mind other investment options. Particularly another common option: stocks. One may claim that cryptocurrency has survived many bear markets if you only look at cryptocurrency. Someone else may claim that the only reason cryptocurrency hasn't died out is because it's standing on the shoulders of the longest running bull market in history when looking at stocks. There is so much money and confidence about that people are just looking for places to park it. The question is: Does cryptocurrency remain when the fun and games end, or was it just tulips?
endisneigh 5y ago
No, nor was it prolonged.
- deleted 5y ago
  [deleted]
nawgz 5y ago

steelstraw 5y ago

Crypto has famously gone through several bear markets though and a bunch of 80% corrections.

alar44 5y ago
Several?? We haven't had a bear market in 10 years.
- steelstraw 5y ago
  In crypto, yes. There have been years (2014 - 2016, 2018 - 2020) where the market fell down and hibernated.
devoutsalsa 5y ago
Crypto winter is coming.
endisneigh 5y ago
A correction isn’t a prolonged bear market. Regardless, the period of 2010 to date has effectively been a prolonged bull run.
nikanj 5y ago
Fortunately crypto has no fundamentals, so it can't really fail financially. There's absolutely no business whatsoever, so there is no worry of the business running out of funds and thus forcing crypto into chapter 11. The stock price can drop to 0, and it would be ok. There's no stores to close due to unpaid rents, no workers to furlough, etc. In a weird way it's immortal.
- ProAm 5y ago
  They would become beanie babies.
- hervature 5y ago
  It is definitely not immortal. If the price goes to 0, then miners have 0 incentive to keep the blockchain going. More realistically, once the price is sufficiently low and 51% attacks become viable, it has effectively died.

pessimizer 5y ago

> Jury is still out on whether it can survive a prolonged bear market. One thing we know for sure is that it ain't gold since it moves with the market rather than against it.