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>Now you're talking about value, which is entirely subjective. No it's not. When an asset prices in cash, that price is dependent on it's ability to generate

by RC_ITR 4y ago

>Now you're talking about value, which is entirely subjective. No it's not. When an asset prices in cash, that price is dependent on it's ability to generate future cash (Goods/Services price based on the utility from consuming that thing). If you think that model is wrong, then you are wrong. >As far as GDP, Ethereum spawned an entire new industry with tons of companies paying actual salaries to people (in fiat, if I might add), all of whom bought lattes and cars and houses, and some, I'm sure, also bought Peloton bikes. Oh no no no. You are not buying any of that when you buy Ethereum. We are not talking about whether or not Coinbase/Binance/etc. are Ponzi schemes. They offer services in exchange for fees. That is GDP full stop. Again, I can argue they are bad businesses because their fees are dependent on a Ponzi Scheme, but they are not the Ponzi Schemes. >Crypto currencies are like stock tickers. The price does not have to have any bearing on the actual value generated by the stock or the company it represents. This is a very weird argument. When an acquirer wants to buy a company, they need to pay the stock (usually plus a premium) price to own that company. Stock prices reflect the theoretical takeout price of a company (and this is put into practice every day). Cryptocurrencies are marketed to you as similar to stock tickers, but they are currencies (it's sort of in the name) and currencies are valued by the demand for goods/services/assets you can buy with them (i.e. this is why export economies, all else equal, have strong currencies). I would agree that cryptocurrencies would go up in value if you could buy an increasingly large amount of things with them (and only them), but heuristics imply the exact opposite is true. >There is a speculative element to all markets, including the stock market. And I think you know that as well. You're really not getting that there's 'overestimate future cashflow' speculation (bad but not so bad) and 'funamental misunderstanding of the asset' speculation. But, it's your pocketbook so good luck.

spaceman_2020 4y ago
> No it's not. When an asset prices in cash, that price is dependent on it's ability to generate future cash But that's precisely why people were valuing Ethereum at x,xxx per token - the belief that Ethereum will one day have the network effect to generate future revenues. And honestly, a lot of projects built on Ethereum did generate an absurd amount of revenue in a very short span of time. OpenSea and Uniswap are probably the most prominent examples. Both generated a combined total of over $1B in revenue and used Ethereum as the fee token. The speculative price of Ethereum - or any other cryptocurrency, for that matter - relies on the belief that the number of apps like Uniswap and OpenSea will likely increase over the years. > I would agree that cryptocurrencies would go up in value if you could buy an increasingly large amount of things with them (and only them) That's precisely what's happening with Ethereum. There are more and more dApps that all use Ethereum to process transactions. There are even SaaS tools that you can pay for in Ethereum, with a single tap from your Ethereum wallet. I feel like you're attacking me without fully understanding how this ecosystem works, nor have you actually ever used a dApp.
- RC_ITR 4y ago
  >But that's precisely why people were valuing Ethereum at x,xxx per token - the belief that Ethereum will one day have the network effect to generate future revenues. Ok so let's go first principles here (ignoring the word soup that is "have the network effect to generate future revenues.") For something to create value it has to do something that people are willing to pay for (in currency, goods, services, etc.). That's the GDP point. Currencies just exist, they don't do anything themselves. People do things with them but the GDP value comes from what those people do, not the currency itself. OK, you tell me, "but Ethereum facilitates transactions and people pay for those transactions with fees!" But those fees go to stakers (who do provide a service, albeit a dumb one). Ok so now you tell me "But yes, stakers need coins, and I'm buying coins now because I think there will be increasing demand for coins vs. a fixed supply!" Which great, now we are back to "Currencies are valued by the demand for goods/services/assets you can buy with them (i.e. this is why export economies, all else equal, have strong currencies)." In this case, what ETH buys is 'the right to earn transaction fees on the ETH network' Great, again I love this. Feels like we are on to something. But here's the rub: Are people actually buying anything Ethereum? Are people buying goods with ETH? No, Ethereum is a very bad tool to buy goods/services with and in fact it's illegal to in most of the world (I'm serious, look it up). Are people buying services with ETH? See above. Are people buying assets with ETH? No. What are they buying? Mostly other currencies. And now we circle back to why it is a Ponzi scheme: nearly all of the transactions that "generate value" today are just people baying the currency because they think demand will be higher in the future. There is almost no outside value being brought in via "the only way I can buy this good/service/asset is via crypto, so I'll buy crypto because I want that good/service/asset" If we get to a world where people are actually, ya know, using crypto to buy things, I'll buy into it, but surprise centralized databases are actually intrinsically way better at that than crypto is, but again, that's just my opinion that I've spent years thinking about, so good luck on your bet. >I feel like you're attacking me without fully understanding how this ecosystem works, nor have you actually ever used a dApp. I just hope you've though as much about the intrinsic nature of impermanent loss as I have, given all your confidence. I'll give you a hint, it's not impermanent and it's screwing you over 100% of the time. EDIT: I'm going to head you off here, because I know the 'have you ever used a dApp?" is coming. You can put as many layers on the above as you want, but if consumable goods and services aren't being purchased with your currency, then it's worthless, regardless of how many Liquidity providers there are on Uniswap.
eniotna 4y ago
Value is entirely subjective, a starving man in the desert will value water over gold.
- RC_ITR 4y ago
  Sure, in absence of an economy, but in literally any other scenario no he wouldn't? To paraphrase Homer Simpson, "Gold can be exchanged for goods and services" So yeah, if you are an 'the economy is fake' guy then rock on, but otherwise you're wrong.

by RC_ITR 4y ago

spaceman_2020 4y ago

> No it's not. When an asset prices in cash, that price is dependent on it's ability to generate future cash But that's precisely why people were valuing Ethereum at x,xxx per token - the belief that Ethereum will one day have the network effect to generate future revenues. And honestly, a lot of projects built on Ethereum did generate an absurd amount of revenue in a very short span of time. OpenSea and Uniswap are probably the most prominent examples. Both generated a combined total of over $1B in revenue and used Ethereum as the fee token. The speculative price of Ethereum - or any other cryptocurrency, for that matter - relies on the belief that the number of apps like Uniswap and OpenSea will likely increase over the years. > I would agree that cryptocurrencies would go up in value if you could buy an increasingly large amount of things with them (and only them) That's precisely what's happening with Ethereum. There are more and more dApps that all use Ethereum to process transactions. There are even SaaS tools that you can pay for in Ethereum, with a single tap from your Ethereum wallet. I feel like you're attacking me without fully understanding how this ecosystem works, nor have you actually ever used a dApp.

RC_ITR 4y ago
>But that's precisely why people were valuing Ethereum at x,xxx per token - the belief that Ethereum will one day have the network effect to generate future revenues. Ok so let's go first principles here (ignoring the word soup that is "have the network effect to generate future revenues.") For something to create value it has to do something that people are willing to pay for (in currency, goods, services, etc.). That's the GDP point. Currencies just exist, they don't do anything themselves. People do things with them but the GDP value comes from what those people do, not the currency itself. OK, you tell me, "but Ethereum facilitates transactions and people pay for those transactions with fees!" But those fees go to stakers (who do provide a service, albeit a dumb one). Ok so now you tell me "But yes, stakers need coins, and I'm buying coins now because I think there will be increasing demand for coins vs. a fixed supply!" Which great, now we are back to "Currencies are valued by the demand for goods/services/assets you can buy with them (i.e. this is why export economies, all else equal, have strong currencies)." In this case, what ETH buys is 'the right to earn transaction fees on the ETH network' Great, again I love this. Feels like we are on to something. But here's the rub: Are people actually buying anything Ethereum? Are people buying goods with ETH? No, Ethereum is a very bad tool to buy goods/services with and in fact it's illegal to in most of the world (I'm serious, look it up). Are people buying services with ETH? See above. Are people buying assets with ETH? No. What are they buying? Mostly other currencies. And now we circle back to why it is a Ponzi scheme: nearly all of the transactions that "generate value" today are just people baying the currency because they think demand will be higher in the future. There is almost no outside value being brought in via "the only way I can buy this good/service/asset is via crypto, so I'll buy crypto because I want that good/service/asset" If we get to a world where people are actually, ya know, using crypto to buy things, I'll buy into it, but surprise centralized databases are actually intrinsically way better at that than crypto is, but again, that's just my opinion that I've spent years thinking about, so good luck on your bet. >I feel like you're attacking me without fully understanding how this ecosystem works, nor have you actually ever used a dApp. I just hope you've though as much about the intrinsic nature of impermanent loss as I have, given all your confidence. I'll give you a hint, it's not impermanent and it's screwing you over 100% of the time. EDIT: I'm going to head you off here, because I know the 'have you ever used a dApp?" is coming. You can put as many layers on the above as you want, but if consumable goods and services aren't being purchased with your currency, then it's worthless, regardless of how many Liquidity providers there are on Uniswap.

eniotna 4y ago

Value is entirely subjective, a starving man in the desert will value water over gold.

RC_ITR 4y ago
Sure, in absence of an economy, but in literally any other scenario no he wouldn't? To paraphrase Homer Simpson, "Gold can be exchanged for goods and services" So yeah, if you are an 'the economy is fake' guy then rock on, but otherwise you're wrong.