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The one thing of value that crypto actually delivers (and which will never be replicated in tradfi because of incentives of existing players) is atomic multi-pa

The one thing of value that crypto actually delivers (and which will never be replicated in tradfi because of incentives of existing players) is atomic multi-party transactions across unrelated parties. Something like a flash loan would never exist in tradfi. Being able to borrow billions with _no_ risk of loss due to execution delays between borrowing money and executing a trade means more liquidity and lower risk for market makers which translates to a better experience for everyone else. It's too bad it's attached to scams and grifters.

pixelpoet 4y ago
It's so rare that I see people who actually understand the problem crypto solves; essentially everyone is either balls deep on the clueless hype train, or full of vitriol that there's a real thing happening they don't like or really understand. IMO you said it perfectly and it's worth emphasizing for programmer types: > The one thing of value that crypto actually delivers [...] is atomic multi-party transactions across unrelated parties. I wouldn't say it's the one/only thing though: Ethereum builds a trustless computation platform on top this core primitive, which I think is pretty fundamental and impressive (especially when you consider Vitalik Buterin was 21 when he created it, and already had a long career of writing for Bitcoin Magazine; in particular this article from 2014 criticising Bitcoin's centralisation: https://bitcoinmagazine.com/business/opinion-on-mining-1403298609 https://bitcoinmagazine.com/business/opinion-on-mining-14032...).
WheelsAtLarge 4y ago
Here's an advantage that no one seems to point out. "Longevity," crypto, like bitcoin, does not need a nation state to survive. True, it's value will fluctuate, there is nothing stopping it from going to zero, but as long as there's group of people that want to mine it and use it, it will be here.
- amluto 4y ago
  Bitcoin is quite susceptible to its own form of death spiral: the point at which attacking it becomes more profitable or simply more amusing than to mine it honestly. There is a large amount of mining hardware out there, and the lower the price goes, the less profitable it is to mine with that hardware. But idle hardware still exists. Imagine if you could rent mining hardware, IaaS-style, and there was enough available to control a majority of the active hash rate. An attack that lasted a few hours would not be particularly expensive. It’s easy to assume that Bitcoin, Ethereum, etc are technologies that work as advertised and that the only interesting questions are weather the tokens on the respective blockchains are useful and/or valuable. But the blockchains themselves have critical requirements for proper functioning, and they can easily fail. (For Ethereum in particular, you can rent GPUs on fairly large numbers. A change in the economics could easily make it possible to rent a majority of mining power on AWS or similar platforms. At least Bitcoin hardware is mostly useless for anything other than Bitcoin mining.)
  - mekster 4y ago
    How is attacking it more profitable? You need gigantic investment to accomplish it now and it's not even a sure return and by the time you're constantly successful with your attack, the market has figured the network is taken over for the price to go zero to move over to another coin. Then you're left with crazily invested factories, mining a worthless coin. Your assumptions are missing the simple idea that if there's a room to be profitable, they'll mine that themselves than somehow let them stay idle for someone else to rent and start a massive attack.
    - amluto 4y ago
      If the price of Bitcoin always goes up and the efficiency of mining hardware always goes down, then I probably agree with you. But this is not the case! There is plenty of mining hardware, right now, that cannot be used to profitably mine Bitcoin. The lower the price goes, the higher the fraction of hardware for with this becomes true. To me, mining hardware that can’t honestly mine for a profit is just asking to be used to dishonestly mine.
      - mekster 4y ago
        For one, where are the mining hardware that are unused? The hash rate is actually going up during this bear market. They should drop once they can't mine profitably for a while but so far not the case. https://www.blockchain.com/charts/hash-rate https://www.blockchain.com/charts/hash-rate You cannot possibly own half of that hash rate to yourself unless you're some state level actor wasting tax on it thinking wasting billions (even then, you can't just order million ASIC units overnight) today to kill Bitcoin is better than some future they see with Bitcoin but then again, people can fork Bitcoin to form another base cryptocurrency, and their effort could become a complete waste. The only few ways Bitcoin can kill itself is that either people fail to see its usefulness or that some severe unfixable security flaw is found.
- mekster 4y ago
  When will be the time no one wants an asset that's not centrally controlled? People say crypto has no intrinsic value but its uncontrollable existence is the value itself. But it's ok for those people to keep missing the boat to see bright friends make killings. When will they try to answer the simple question that how crypto is still around after 13 years with constant price increase?
moneywoes 4y ago
I may be misinformed but haven’t those flash loans been heavily exploited?
- hackernudes 4y ago
  Isn't it more like they have been used to exploit bad smart contracts?
hackernudes 4y ago
A fixed monetary policy will also never happen in tradfi. Bitcoin as a currency delivers something. Can atomic swaps happen in a centralized system? If so, does that still count as cryptocurrency?
- ceeplusplus 4y ago
  There are no technical barriers preventing atomic swaps from happening in a centralized system. Transactional databases have existed since the 70s. There are no technical barriers preventing bank transfers from clearing in seconds either, but as I said, there are incentive problems that prevent existing actors from making it happen. Cryptocurrency is merely a technical solution to a political problem. How do you bypass the existing entrenched players in finance so you can implement real changes? You make your own money. How do you get people to trust bullshit money? Crypto. There are a huge number of stock exchanges today that all trade the same products with slightly different exchange features. Do you think they're going to be inclined to cooperate with each other to make atomic swaps work across exchanges?

pixelpoet 4y ago

It's so rare that I see people who actually understand the problem crypto solves; essentially everyone is either balls deep on the clueless hype train, or full of vitriol that there's a real thing happening they don't like or really understand. IMO you said it perfectly and it's worth emphasizing for programmer types: > The one thing of value that crypto actually delivers [...] is atomic multi-party transactions across unrelated parties. I wouldn't say it's the one/only thing though: Ethereum builds a trustless computation platform on top this core primitive, which I think is pretty fundamental and impressive (especially when you consider Vitalik Buterin was 21 when he created it, and already had a long career of writing for Bitcoin Magazine; in particular this article from 2014 criticising Bitcoin's centralisation: https://bitcoinmagazine.com/business/opinion-on-mining-1403298609 https://bitcoinmagazine.com/business/opinion-on-mining-14032...).

WheelsAtLarge 4y ago

Here's an advantage that no one seems to point out. "Longevity," crypto, like bitcoin, does not need a nation state to survive. True, it's value will fluctuate, there is nothing stopping it from going to zero, but as long as there's group of people that want to mine it and use it, it will be here.

amluto 4y ago
Bitcoin is quite susceptible to its own form of death spiral: the point at which attacking it becomes more profitable or simply more amusing than to mine it honestly. There is a large amount of mining hardware out there, and the lower the price goes, the less profitable it is to mine with that hardware. But idle hardware still exists. Imagine if you could rent mining hardware, IaaS-style, and there was enough available to control a majority of the active hash rate. An attack that lasted a few hours would not be particularly expensive. It’s easy to assume that Bitcoin, Ethereum, etc are technologies that work as advertised and that the only interesting questions are weather the tokens on the respective blockchains are useful and/or valuable. But the blockchains themselves have critical requirements for proper functioning, and they can easily fail. (For Ethereum in particular, you can rent GPUs on fairly large numbers. A change in the economics could easily make it possible to rent a majority of mining power on AWS or similar platforms. At least Bitcoin hardware is mostly useless for anything other than Bitcoin mining.)
- mekster 4y ago
  How is attacking it more profitable? You need gigantic investment to accomplish it now and it's not even a sure return and by the time you're constantly successful with your attack, the market has figured the network is taken over for the price to go zero to move over to another coin. Then you're left with crazily invested factories, mining a worthless coin. Your assumptions are missing the simple idea that if there's a room to be profitable, they'll mine that themselves than somehow let them stay idle for someone else to rent and start a massive attack.
  - amluto 4y ago
    If the price of Bitcoin always goes up and the efficiency of mining hardware always goes down, then I probably agree with you. But this is not the case! There is plenty of mining hardware, right now, that cannot be used to profitably mine Bitcoin. The lower the price goes, the higher the fraction of hardware for with this becomes true. To me, mining hardware that can’t honestly mine for a profit is just asking to be used to dishonestly mine.
    - mekster 4y ago
      For one, where are the mining hardware that are unused? The hash rate is actually going up during this bear market. They should drop once they can't mine profitably for a while but so far not the case. https://www.blockchain.com/charts/hash-rate https://www.blockchain.com/charts/hash-rate You cannot possibly own half of that hash rate to yourself unless you're some state level actor wasting tax on it thinking wasting billions (even then, you can't just order million ASIC units overnight) today to kill Bitcoin is better than some future they see with Bitcoin but then again, people can fork Bitcoin to form another base cryptocurrency, and their effort could become a complete waste. The only few ways Bitcoin can kill itself is that either people fail to see its usefulness or that some severe unfixable security flaw is found.
mekster 4y ago
When will be the time no one wants an asset that's not centrally controlled? People say crypto has no intrinsic value but its uncontrollable existence is the value itself. But it's ok for those people to keep missing the boat to see bright friends make killings. When will they try to answer the simple question that how crypto is still around after 13 years with constant price increase?

moneywoes 4y ago

I may be misinformed but haven’t those flash loans been heavily exploited?

hackernudes 4y ago
Isn't it more like they have been used to exploit bad smart contracts?

hackernudes 4y ago

A fixed monetary policy will also never happen in tradfi. Bitcoin as a currency delivers something. Can atomic swaps happen in a centralized system? If so, does that still count as cryptocurrency?

ceeplusplus 4y ago
There are no technical barriers preventing atomic swaps from happening in a centralized system. Transactional databases have existed since the 70s. There are no technical barriers preventing bank transfers from clearing in seconds either, but as I said, there are incentive problems that prevent existing actors from making it happen. Cryptocurrency is merely a technical solution to a political problem. How do you bypass the existing entrenched players in finance so you can implement real changes? You make your own money. How do you get people to trust bullshit money? Crypto. There are a huge number of stock exchanges today that all trade the same products with slightly different exchange features. Do you think they're going to be inclined to cooperate with each other to make atomic swaps work across exchanges?