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Can someone actually explain what the intrinsic use of coins is supposed to be (aside from speculating). Their value is so volatile they suck as actual currency

Can someone actually explain what the intrinsic use of coins is supposed to be (aside from speculating). Their value is so volatile they suck as actual currency, not to mention if you were the guy that spent 10,000 bitcoins on a pizza back in the day you'd feel pretty stupid about your 300 million dollar pizza. They're not even particularly good for illegal purchases -- you have to know what you're doing to keep your blockchain transactions actually anonymous. Besides the uselessness, let's not ignore the awful downsides. They're a huge boon for randsomeware. Oh and they're an environmental disaster. Frankly I'm not really sad to see this stuff collapse, because when you get rid of speculation there's not much good about crypto. I do think we need some sort of crypto currency in the future. I believe in the _idea_ of it. But the current implementation is ridiculous and awful. It needs to function as an actual currency, that you would be willing to spend, not as some sort of incomprehensible "investment" vehicle.

kranke155 4y ago
When Ethereum/ another crypto VM becomes fast enough, decentralised applications will be the new iPhone - stuff we can’t imagine will be built there. As far as NFTs, 90-99% of the activity is nonsense, fraud and money laundering, but there are real artists in the space. Whether that’s satisfactory for you is really a matter of perspective.
- jankyxenon 4y ago
  The use case is "stuff we can't imagine"?
  - damon_c 4y ago
    Imagine someone told you in 1989 when all the internet did was email and ftp, that the internet was going to do a lot of other things but they didn't really know what yet.
    - richardwhiuk 4y ago
      The difference is that email and FTP on their own were really useful.
    - Tao3300 4y ago
      > all the internet did was email and ftp In retrospect, that would have been a nice stopping point...
    - hn_throwaway_99 4y ago
      There was still plenty that could be imagined in 1989 that the Internet could be capable of - there was none of this "it is just too unimaginable to even consider" nonsense. E.g. there were plenty of dialup BBS services and things like Prodigy with GUI, chat, etc. in the 80s. It wasn't that much of a great leap to see how moving those types of things from proprietary networks to the Internet would occur.
      - kranke155 4y ago
        DAOs are fantastically interesting and if you look into the ones that work, Vitalik’s ideas for Quadratic Voting, there’s a lot toucan imagine could happen there. DAOs and NFTs are already incredible in my view, they are just in pre-alpha stage and everything is kind of a mess. But people see the pre-alpha and goes “this will never work”. I really disagree. I see for instance how DAOs and blockchain could help developers receive compensation for commits to open source software, creating a possibility for the commercialisation of open source that competes with even large companies. I know people who looked into this. And I hope it happens. It would dramatically change the incentives if you could get as much or even more money from open source software as a developer, and even more so if you could colect royalties for your work wherever it’s used. The entire digital economy would change if you could have open source software that’s fully open, permission less and paid for.
        hn_throwaway_99 4y ago
        > I see for instance how DAOs and blockchain could help developers receive compensation for commits to open source software, creating a possibility for the commercialisation of open source that competes with even large companies. I know people who looked into this. And I hope it happens. I was appropriately reprimanded by dang yesterday for starting a comment with an attack, so I'll slow down and just point out the following: 1. GitHub, for example, already makes it extremely easy to contribute to open source developers. It's called GitHub Sponsors. 2. I have actually donated to a developer that writes a library I love using GitHub Sponsors. It was trivial to do, I just entered my credit card, the money came out on a monthly basis, and I cancelled after a year (I told the dev I'd support them for a year). I'll also note that I don't live in the same country as the developer and the developer's country uses a different currency. 3. The thing that gets me about these kinds of examples proposed by crypto fans is that the mechanics of how to, for example, pay open source devs is zero part of the problem. The problem is that a lot of people are willing to work for free, and software users don't like to pay for stuff that they can get for free. Again, I see a lot of "hand-wavy utopianism" from crypto enthusiasts, but I see zero examples of (a) why this would be better than GitHub Sponsors, or (b) why do you think GitHub Sponsors hasn't been more successful (hint, it's not that actually making payment with a GH Sponsorship is difficult).
  - kranke155 4y ago
    I can imagine lots of apps, and I also think lots of currently centralised apps would be replicated in crypto VMs, when they become fast enough. But even talking about Uber on chain or Airbnb on chain is silly right now, since the whole space is yet again on “collapse” days. I wouldn’t judge crypto for 10-20-30 years. I think we’re on the ARPANET days, and even suggesting Amazon would get you laughed out of the room.
- pclmulqdq 4y ago
  That was the premise of Solana, but it turns out speed in a distributed system needs some form of centralized coordination.
  - kranke155 4y ago
    For now that’s true. I’m not giving judgment on crypto VMs for 10-20-30 years. Right now 90-99% of the space is scams and nonsense, which happened because of the lack of a regulatory environment. Any smart white collar criminal and fraudster with brains knows they can make millions to billions on crypto and never be charged of a crime. Crypto is in its ARPANET whatever days. It’s purpose is not fully clear, there are a few usable applications (Uniswap, NFTs, MakerDAO) but really it’s purpose will only be realised when the main snags are solved: - it needs massive throughput - it needs some form of hack resistance, even if that means the ability to reverse transactions - it needs some form of regulations to avoid rampant crime and fraud - UX/UI need to be dramatically improved (I’ve heard good things about Rainbow and Argent Wallets). Then user facing applications will show up naturally. You just need it to be able to process some X amount of quantity of transactions, and potentially, reversibility.
- sweetheart 4y ago
  > decentralised applications will be the new iPhone. What makes you think that? Genuinely curious. I can think of lots of reasons that the opposite might be true, so I’m curious as to what my blind spots may be.
  - kranke155 4y ago
    It’s a long discussion. Unfortunately in order to learn about crypto you have to ignore virtually everything that exists in the space right now, since white collar criminals have realised this is a free for all space where they can commit fraud at will and never get charged (with some exceptions). Really there is only one interesting thing you need to study. And that’s Ethereum. Bitcoin is pretty much stuck in the past and it’s a mummified open source project imo. And all the other interesting chains are just Ethereum clones with some changes - Polkadot, Algorand, Tezos are perhaps the very few that matter. But everything comes from Ethereum, and if you study and earn about ETH you will understand the whole space. So look at the interesting ideas and read the books from the good people who’ve done their research - Cryptopians came out recently and that’s a good one even though I haven’t read it I trust Laura Shin (her podcast is also excellent ). Out of the Ether is also good. But here are some thoughts: - DAOs are already working in making fully decentralized open source dev collectives and rewarding them for work done. See MakerDAO - dapps running in cryptoVMs can be made to run at no cost to the developer. That’s pretty cool, since a lot of the “moat” that Uber, FB and Twitter build is two-fold - first they own your data, then they build giant infrastructure to serve you the app. With crypto VMs you don’t need this - people pay for usage. If you could figure out an algorithm that’s better than Uber’s at allocating people who want to drive point to point, you don’t need to go “oh well I guess I go fund raising to build the infra”. Crypto VMs give you that for free, since the user pays for the usage of the application in the transaction. - decentralised applications can be made safely, even though again they are hard to make and lots of them are just copy paste by fraudsters and schemers (and inevitably get hacked). Uniswap, Compound, Lido, Curve Finance. There are multiple dapps that have never been hacked as far as I know. - Gitcoin is already quite an incredible little way to fund projects, I believe it’s implemented some form of Quadratic Voting, which Vitalik Buterin has talked about - NFTs actually work - in the sense that there are real artists building communities and selling their digital art (not monkey pictures) I know of multiple artists who quit mind numbing work at big Corp and became quite successful in NFTs. Again 99% of the space is money laundering, fraud, wash trading - but so is real art (the idea that NFTs are special in that regard is a fiction only someone who hasn’t interacted with the “art world” can hold). I can go on but illl have to think. But DAOs, NFTs, decentralised VMs with immutable data are pretty cool already. The reason I say I can’t predict what’s going to happen is because even being a digital artist myself, I had no idea about NFTs. And when I discovered them I was blown away. The possibilities that NFTs open up as a digital artist are pretty incredible - you could in theory make “designer levels” for Mario Maker and sell only 7 copies of the map! Making it a collector’s item. And you would colect royalties forever on chain if people sold your map to each other. That’s pretty cool and just couldn’t be done before. So I have no faith in my ability to predict the future, but I like the internet better with DAOs and NFTs, instead of likes and digital feudal lords who own all your data. https://overcast.fm/+YVsUUTgOg https://overcast.fm/+YVsUUTgOg - the Blockchain Socialist’s interview with Buterin is really interesting, giving you a nice overview of Vitalik’s thinking about the space atm.
- hn_throwaway_99 4y ago
  > When Ethereum/ another crypto VM becomes fast enough, decentralised applications will be the new iPhone - stuff we can’t imagine will be built there. In other words, "we have no idea, trust us".
- cokeandpepsi 4y ago
  as opposed to the new penny stock which is what it is now?
  - kranke155 4y ago
    The penny stock phenomenon comes from the Bitcoin fantasy of it becoming a currency. Cryptos are not currencies and I don’t think they will ever be. Ethereum is just liquidity for a decentralized VM, and whether that idea will work out or not is decades away from being clear. Basically it’s programmable money.
- bogomipz 4y ago
  Can you say what are the current bottlenecks that are limiting the Ethereum VM? How far off into the future is decentralized apps being as revolutionary as the iPhone?
  - kranke155 4y ago
    I have no idea. Potentially decades. It could also be a flop, but I made another comment with the example of how DAOs by themselves could change open source development entirely. That's probably the best articulation of what I think so far.
HDThoreaun 4y ago
I can see some value in ethereum's VM. The upside there is a bootstrapped cloud that every computer can join when not in use, unlocking tons of value that currently is just sitting around. Seems reasonable to believe that 10 years from now ML training/other compute intensive async tasks might be done via the ethereum VM. Probably would be easier to just do this via a centralized organizer, but getting enough buy in to actually attract users might be difficult. Ethereum already has it.
herval 4y ago
Volatility aside, stuff like Bitcoin _is_ already used for payments, albeit in a much lower volume than the crypto proponents wish it would be. I pay contractors now and then with BTC, particularly in South America and Africa, and works MUCH better than SWIFT (even if I have to convert from USD to BTC and they have to convert from BTC to whatever on their side). Projects like Ripple also have their use - it's mostly a replacement for SWIFT & similar systems (you'd be surprised by just how fragile these interbank systems are). Some countries are implementing their own "digital currencies" as well (notably China), and they may end up being some flavor of crypto currency (although a public blockchain is not mandatory for these cases - see the example of PIX in Brazil, which works incredibly well without any public chain shenanigans). So yea, there's value on the whole thing, but the amount of fraud, money laundering and flat out scams (in particular now that mainstream VCs are propping up the entire system) is really too big of a downside to ignore.
- yieldcrv 4y ago
  Avoiding all regulatory scrutiny and delays of an international wire transfer by converting them to domestic transfers in both countries is a major use of crypto that has almost no way of being quantified. International wires are fraught with painful user experiences and costs and time issues and its all unknown beforehand. This works even better when you already have inventory of ANY crypto, or keep stablecoins on hand because you use them. then the request to pay doesn't require you to get USD over to a crypto exchange and convert, just the near instant act of transferring. When your contractor is able to get goods and services and invest in crypto, they don't need their local fiat either, just a common reality, not something to convince anybody of (unlike when we were doing this during the last decade).
  - herval 4y ago
    That requires you to trust stablecoins, though. Not a very wise idea IMO, for any meaningful amount of money
    - yieldcrv 4y ago
      yeah there isnt a perfect one USDC fits my risk profile, as well as MIM I want a better managed variant of MIM
legitster 4y ago
Theoretically, the coins also act as an ownership share in their respective technology. Or are a transaction unit for it. You could have a deed to something on a blockchain instead of at a title company. But to your point, if 99.99% of the technology the coins represent is... more coins? Then yeah, it's a big ol' Ponzi scheme. I always thought it would be interesting to have a coin specifically based on its demand. You have to post something for sale in that coin for a new coin to be minted. So the coin only propagates so long as there is actual demand for it.
capableweb 4y ago
I don't use a ton of cryptocurrency, but I have a few uses for it. My primary use case right now is using Filecoin to pay for off-site backups of various kinds, encrypted with (supposedly) quantum-proof cryptography that I encrypt my data with before finally replicating it to numerous instances across the world. This is together with also writing my backups to CDs, using online services like rsync.net and one big USB stick at one. One time I lost my backups so I'm trying to make sure this never happens again... Secondly, I've used Algorand, Ethereum and Bitcoin for transferring funds to relatives and friends to/from South America and Africa, which ended up being the cheapest way of transferring funds to them, even accounting for me buying it, the transfer fee and them cashing it out. It also was way faster than anything we tried before, so pretty good experience overall. But to your main point, most if not 99% of all cryptocurrency is definitely over-hyped beyond anything I've ever seen. I wouldn't touch most of the ecosystem with a ten-foot pole, doing a lot of research and actually understanding the protocols that you use. Most people don't, so they tend to get burned. Countless of times I've had to help family and friends to avoid scams that they come across, and it honestly makes me kind of glad that what is happening now is happening, it'll shake off all of these scammy projects that are just trying to scam people.
- deleted 4y ago
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shuntress 4y ago
>Can someone actually explain what the intrinsic use of coins is supposed to be It's supposed to be a digital equivalent to physical cash. Specifically the ability to be transferred directly from one individual to another without either having any special permissions, access, or power. The ultimate goal is for all transactions to be completely stateless. Meaning, you should be able to "drop" a bitcoin into a digital "bucket" without needing any kind of pre-existing authorization/account/identification/association/etc with the holder of the bucket (or any third-party acting on their behalf). You are correct in your assessment that in their current (and foreseeable future) states, cryptocurrencies are completely useless as actual currency.
nikanj 4y ago
Drugs. Other contraband too. Blackmail, ransomware, circumventing anti-money laundering / taxation / capital controls / etc Not many legal use cases,k but there are massive dark industries that would suffer greatly if cryptos disappered.
nlitened 4y ago
I can explain seriously and answer follow-up questions. I will simplify and just highlight the most valuable current use case, there might or might not be others now or in the future. The value of ether (ETH) is to be a currency that you need to spend in order to include transactions into Ethereum's distributed ledger. Most useful transactions are transfers of stablecoins like USDT or USDC. USDT and USDC can be exchanged for goods and services all over the world, and are very convenient for any international transfers and cash exchanges bigger than 500 USD. Price of stablecoins is ideally tethered to the underlying fiat currency, so price swings don't matter. Price of ether is _whatever_, because usually your stablecoin ledger transaction fee is low enough, so price swings don't matter again.
- secondcoming 4y ago
  So in order to transact on 'The Blockchain' I'll need a stablecoin for the purchase and ETH in order to submit my transaction?
  - nlitened 4y ago
    Yes, like when you go to a shopping mall, you do need fiat currency to purchase goods, _but_ you also need to keep your car's gas tank topped up to get there. Your car's gas price also fluctuates, but usually it does not affect your shopping plans too much, unless you're doing very large-scale shopping.
- aeyes 4y ago
  I fail to understand how this use of stable coins is better than licensed currency transfer companies. You still need to exchange your local currency twice on shady unlicensed crypto exchanges. Or am I missing something here? I regularly transfer thousands of Dollars to different countries, the provider I use usually gets the job done on the same day. There are also huuuge differences in crypto exchange rates depending on country. Crypto exchanges work with unfavorable FX rates when selling USDT unless you already have USD. Binance in my country is currently showing a 4% difference compared to exchange rates on XE.com. Even my bank gives me a better FX rate than that.
agumonkey 4y ago
one dude explained that they wanted to make a loan platform that would avoid usual bank management costs since it's automated, so he claimed the higher yields came from that. It seemed a coherent explanation to me (he could be lying too, but at least his talk had some foundations and not moonshots of potential decentralized nirvanian future)
- pavlov 4y ago
  How does the automated loans-on-blockchain platform discover someone’s real income and existing debts in a way that can’t be forged? If it doesn’t do that, it’s not really automating anything that banks currently do when deciding to extend you a loan. And if it uses existing sources like credit scores and the salary data sold by employers, then it’s merely the same as the systems banks and other consumer lenders already use.
  - agumonkey 4y ago
    The risk managing part was not discussed indeed.
paxys 4y ago
Speculating is the intrinsic use
strangescript 4y ago
Its not practical as a global currency with regards to BTC. It never really has been. It is too slow and too expensive compared to centralized options. The idea of a neutral all digital currency sounds fantastic but it glosses over a key advantage of the US dollar. The dollar is backed by the US Gov't and the US military. It didn't just randomly become the defacto monetary standard in the world by accident. Price fluctuations would diminish with more adoption as well. We also interact with things that vary wildly in price year over year too, like the price of gas (oil). We have just become used to it. The dollar itself fluctuates a fair bit, the DXY index is at 106, and it will probably get much higher next year indicating a strong dollar if there is a global recession. Actual price adjustments are just slow to trickle down to consumers because of a lack of practicality of changing on the shelf prices each day. Also, inflation will drive prices higher, but even after the economy is back under control, prices rarely will go back down.
jeffreyrogers 4y ago
The only real use case for crypto has always been buying drugs online (and other, similarly illegal things that normal payment processors won't touch). Tons of hot air has been generated proposing other things but none of them have any product market fit once you remove the traders/speculators.
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doorman2 4y ago
I find it helpful to think about blockchains as the next step in the fintech ladder. Imagine you want to represent ownership of a company, i.e. stock. You don't need electricity to do that. You can accept orders in person, record ownership in a book, issue paper certificates, etc. However, when the mainframe was invented, it became easier to track ownership electronically. Using electronic transactions also made it possible for many more people to trade and expanded the types of products offered, e.g. options became commonplace. Now, the blockchain has arrived. It does everything a mainframe at a large financial institution can do, but it opens up the platform so that more complicated transactions can happen and democratizes the platform so that anyone with a computer can write their own smart contract. What we're seeing now is akin to the the dotcom boom / bust in the late 90s and early 2000s. A new technology has appeared on the scene which leads to two things: 1) People get ahead of themselves. In the late 90s, people could envision all the cool things the internet would unlock and tried to start businesses to realize the potential. Many of those business ideas would be viable today, but the tech wasn't there at the time leading to a lot of empty promises being sold. Today, people can envision how the blockchain will lead to the securitization of everything, but the tech isn't quite there to make the transition yet. 2) As with any optimism boom, there will always be crooks ready to separate a fool from their money.
MrMan 4y ago
I think algorand is by far the best crypto platform out there, but the sad part is that it's the economic / behavioral issues that hold crypto back. if you could earn Algo and it was widely adopted, it would be an attractive alternative currency and smart contract platform. but for me tech and adoption are like two out of four things needed to make crypto non-evil (literally) - the third is democratic governance. the fourth is environmental impact which Algorand checks off. But it's not democratically organized or run, which is a complete non-starter. the foundation that runs it is probably the least corrupt org I can think of in crypto (I am not an expert) but its still a group that hold a giant percentage of the existing coins, which is a huge non-starter as well, and there is no concept of citizen ship or personhood that maps to the real world. I dont believe in the decentralization nonsense and this pseudo anonymous thing over crypto is not good. to really run a DAO you need real people interacting in something like a co-op. kind of like the internet, actually. what some people call decentralization I call by an old fashioned name - distributed. there is another concept which is more to the point than the term centralization and it is concentration. The Gini index of a logical dimension of a system is more important to me than whether it is centralized per se. So voting power should not be too concentrated, wealth should not be too concentrated. We are a long way from a workable model for crypto that fulfills these criteria. Buterin who is a frontman for libertarians (and worse) who are actually evil is the closest thing we have besides the Algo founder to a non-greedy figurehead, but we need no figurehead. what has proven good enough for countries will prove good enough for crypto. democracy.

kranke155 4y ago

When Ethereum/ another crypto VM becomes fast enough, decentralised applications will be the new iPhone - stuff we can’t imagine will be built there. As far as NFTs, 90-99% of the activity is nonsense, fraud and money laundering, but there are real artists in the space. Whether that’s satisfactory for you is really a matter of perspective.

jankyxenon 4y ago
The use case is "stuff we can't imagine"?
- damon_c 4y ago
  Imagine someone told you in 1989 when all the internet did was email and ftp, that the internet was going to do a lot of other things but they didn't really know what yet.
  - richardwhiuk 4y ago
    The difference is that email and FTP on their own were really useful.
  - Tao3300 4y ago
    > all the internet did was email and ftp In retrospect, that would have been a nice stopping point...
  - hn_throwaway_99 4y ago
    There was still plenty that could be imagined in 1989 that the Internet could be capable of - there was none of this "it is just too unimaginable to even consider" nonsense. E.g. there were plenty of dialup BBS services and things like Prodigy with GUI, chat, etc. in the 80s. It wasn't that much of a great leap to see how moving those types of things from proprietary networks to the Internet would occur.
    - kranke155 4y ago
      DAOs are fantastically interesting and if you look into the ones that work, Vitalik’s ideas for Quadratic Voting, there’s a lot toucan imagine could happen there. DAOs and NFTs are already incredible in my view, they are just in pre-alpha stage and everything is kind of a mess. But people see the pre-alpha and goes “this will never work”. I really disagree. I see for instance how DAOs and blockchain could help developers receive compensation for commits to open source software, creating a possibility for the commercialisation of open source that competes with even large companies. I know people who looked into this. And I hope it happens. It would dramatically change the incentives if you could get as much or even more money from open source software as a developer, and even more so if you could colect royalties for your work wherever it’s used. The entire digital economy would change if you could have open source software that’s fully open, permission less and paid for.
      - hn_throwaway_99 4y ago
        > I see for instance how DAOs and blockchain could help developers receive compensation for commits to open source software, creating a possibility for the commercialisation of open source that competes with even large companies. I know people who looked into this. And I hope it happens. I was appropriately reprimanded by dang yesterday for starting a comment with an attack, so I'll slow down and just point out the following: 1. GitHub, for example, already makes it extremely easy to contribute to open source developers. It's called GitHub Sponsors. 2. I have actually donated to a developer that writes a library I love using GitHub Sponsors. It was trivial to do, I just entered my credit card, the money came out on a monthly basis, and I cancelled after a year (I told the dev I'd support them for a year). I'll also note that I don't live in the same country as the developer and the developer's country uses a different currency. 3. The thing that gets me about these kinds of examples proposed by crypto fans is that the mechanics of how to, for example, pay open source devs is zero part of the problem. The problem is that a lot of people are willing to work for free, and software users don't like to pay for stuff that they can get for free. Again, I see a lot of "hand-wavy utopianism" from crypto enthusiasts, but I see zero examples of (a) why this would be better than GitHub Sponsors, or (b) why do you think GitHub Sponsors hasn't been more successful (hint, it's not that actually making payment with a GH Sponsorship is difficult).
- kranke155 4y ago
  I can imagine lots of apps, and I also think lots of currently centralised apps would be replicated in crypto VMs, when they become fast enough. But even talking about Uber on chain or Airbnb on chain is silly right now, since the whole space is yet again on “collapse” days. I wouldn’t judge crypto for 10-20-30 years. I think we’re on the ARPANET days, and even suggesting Amazon would get you laughed out of the room.
pclmulqdq 4y ago
That was the premise of Solana, but it turns out speed in a distributed system needs some form of centralized coordination.
- kranke155 4y ago
  For now that’s true. I’m not giving judgment on crypto VMs for 10-20-30 years. Right now 90-99% of the space is scams and nonsense, which happened because of the lack of a regulatory environment. Any smart white collar criminal and fraudster with brains knows they can make millions to billions on crypto and never be charged of a crime. Crypto is in its ARPANET whatever days. It’s purpose is not fully clear, there are a few usable applications (Uniswap, NFTs, MakerDAO) but really it’s purpose will only be realised when the main snags are solved: - it needs massive throughput - it needs some form of hack resistance, even if that means the ability to reverse transactions - it needs some form of regulations to avoid rampant crime and fraud - UX/UI need to be dramatically improved (I’ve heard good things about Rainbow and Argent Wallets). Then user facing applications will show up naturally. You just need it to be able to process some X amount of quantity of transactions, and potentially, reversibility.
sweetheart 4y ago
> decentralised applications will be the new iPhone. What makes you think that? Genuinely curious. I can think of lots of reasons that the opposite might be true, so I’m curious as to what my blind spots may be.
- kranke155 4y ago
  It’s a long discussion. Unfortunately in order to learn about crypto you have to ignore virtually everything that exists in the space right now, since white collar criminals have realised this is a free for all space where they can commit fraud at will and never get charged (with some exceptions). Really there is only one interesting thing you need to study. And that’s Ethereum. Bitcoin is pretty much stuck in the past and it’s a mummified open source project imo. And all the other interesting chains are just Ethereum clones with some changes - Polkadot, Algorand, Tezos are perhaps the very few that matter. But everything comes from Ethereum, and if you study and earn about ETH you will understand the whole space. So look at the interesting ideas and read the books from the good people who’ve done their research - Cryptopians came out recently and that’s a good one even though I haven’t read it I trust Laura Shin (her podcast is also excellent ). Out of the Ether is also good. But here are some thoughts: - DAOs are already working in making fully decentralized open source dev collectives and rewarding them for work done. See MakerDAO - dapps running in cryptoVMs can be made to run at no cost to the developer. That’s pretty cool, since a lot of the “moat” that Uber, FB and Twitter build is two-fold - first they own your data, then they build giant infrastructure to serve you the app. With crypto VMs you don’t need this - people pay for usage. If you could figure out an algorithm that’s better than Uber’s at allocating people who want to drive point to point, you don’t need to go “oh well I guess I go fund raising to build the infra”. Crypto VMs give you that for free, since the user pays for the usage of the application in the transaction. - decentralised applications can be made safely, even though again they are hard to make and lots of them are just copy paste by fraudsters and schemers (and inevitably get hacked). Uniswap, Compound, Lido, Curve Finance. There are multiple dapps that have never been hacked as far as I know. - Gitcoin is already quite an incredible little way to fund projects, I believe it’s implemented some form of Quadratic Voting, which Vitalik Buterin has talked about - NFTs actually work - in the sense that there are real artists building communities and selling their digital art (not monkey pictures) I know of multiple artists who quit mind numbing work at big Corp and became quite successful in NFTs. Again 99% of the space is money laundering, fraud, wash trading - but so is real art (the idea that NFTs are special in that regard is a fiction only someone who hasn’t interacted with the “art world” can hold). I can go on but illl have to think. But DAOs, NFTs, decentralised VMs with immutable data are pretty cool already. The reason I say I can’t predict what’s going to happen is because even being a digital artist myself, I had no idea about NFTs. And when I discovered them I was blown away. The possibilities that NFTs open up as a digital artist are pretty incredible - you could in theory make “designer levels” for Mario Maker and sell only 7 copies of the map! Making it a collector’s item. And you would colect royalties forever on chain if people sold your map to each other. That’s pretty cool and just couldn’t be done before. So I have no faith in my ability to predict the future, but I like the internet better with DAOs and NFTs, instead of likes and digital feudal lords who own all your data. https://overcast.fm/+YVsUUTgOg https://overcast.fm/+YVsUUTgOg - the Blockchain Socialist’s interview with Buterin is really interesting, giving you a nice overview of Vitalik’s thinking about the space atm.
hn_throwaway_99 4y ago
> When Ethereum/ another crypto VM becomes fast enough, decentralised applications will be the new iPhone - stuff we can’t imagine will be built there. In other words, "we have no idea, trust us".
cokeandpepsi 4y ago
as opposed to the new penny stock which is what it is now?
- kranke155 4y ago
  The penny stock phenomenon comes from the Bitcoin fantasy of it becoming a currency. Cryptos are not currencies and I don’t think they will ever be. Ethereum is just liquidity for a decentralized VM, and whether that idea will work out or not is decades away from being clear. Basically it’s programmable money.
bogomipz 4y ago
Can you say what are the current bottlenecks that are limiting the Ethereum VM? How far off into the future is decentralized apps being as revolutionary as the iPhone?
- kranke155 4y ago
  I have no idea. Potentially decades. It could also be a flop, but I made another comment with the example of how DAOs by themselves could change open source development entirely. That's probably the best articulation of what I think so far.

HDThoreaun 4y ago

I can see some value in ethereum's VM. The upside there is a bootstrapped cloud that every computer can join when not in use, unlocking tons of value that currently is just sitting around. Seems reasonable to believe that 10 years from now ML training/other compute intensive async tasks might be done via the ethereum VM. Probably would be easier to just do this via a centralized organizer, but getting enough buy in to actually attract users might be difficult. Ethereum already has it.

herval 4y ago

Volatility aside, stuff like Bitcoin _is_ already used for payments, albeit in a much lower volume than the crypto proponents wish it would be. I pay contractors now and then with BTC, particularly in South America and Africa, and works MUCH better than SWIFT (even if I have to convert from USD to BTC and they have to convert from BTC to whatever on their side). Projects like Ripple also have their use - it's mostly a replacement for SWIFT & similar systems (you'd be surprised by just how fragile these interbank systems are). Some countries are implementing their own "digital currencies" as well (notably China), and they may end up being some flavor of crypto currency (although a public blockchain is not mandatory for these cases - see the example of PIX in Brazil, which works incredibly well without any public chain shenanigans). So yea, there's value on the whole thing, but the amount of fraud, money laundering and flat out scams (in particular now that mainstream VCs are propping up the entire system) is really too big of a downside to ignore.

yieldcrv 4y ago
Avoiding all regulatory scrutiny and delays of an international wire transfer by converting them to domestic transfers in both countries is a major use of crypto that has almost no way of being quantified. International wires are fraught with painful user experiences and costs and time issues and its all unknown beforehand. This works even better when you already have inventory of ANY crypto, or keep stablecoins on hand because you use them. then the request to pay doesn't require you to get USD over to a crypto exchange and convert, just the near instant act of transferring. When your contractor is able to get goods and services and invest in crypto, they don't need their local fiat either, just a common reality, not something to convince anybody of (unlike when we were doing this during the last decade).
- herval 4y ago
  That requires you to trust stablecoins, though. Not a very wise idea IMO, for any meaningful amount of money
  - yieldcrv 4y ago
    yeah there isnt a perfect one USDC fits my risk profile, as well as MIM I want a better managed variant of MIM

legitster 4y ago

Theoretically, the coins also act as an ownership share in their respective technology. Or are a transaction unit for it. You could have a deed to something on a blockchain instead of at a title company. But to your point, if 99.99% of the technology the coins represent is... more coins? Then yeah, it's a big ol' Ponzi scheme. I always thought it would be interesting to have a coin specifically based on its demand. You have to post something for sale in that coin for a new coin to be minted. So the coin only propagates so long as there is actual demand for it.

capableweb 4y ago

I don't use a ton of cryptocurrency, but I have a few uses for it. My primary use case right now is using Filecoin to pay for off-site backups of various kinds, encrypted with (supposedly) quantum-proof cryptography that I encrypt my data with before finally replicating it to numerous instances across the world. This is together with also writing my backups to CDs, using online services like rsync.net and one big USB stick at one. One time I lost my backups so I'm trying to make sure this never happens again... Secondly, I've used Algorand, Ethereum and Bitcoin for transferring funds to relatives and friends to/from South America and Africa, which ended up being the cheapest way of transferring funds to them, even accounting for me buying it, the transfer fee and them cashing it out. It also was way faster than anything we tried before, so pretty good experience overall. But to your main point, most if not 99% of all cryptocurrency is definitely over-hyped beyond anything I've ever seen. I wouldn't touch most of the ecosystem with a ten-foot pole, doing a lot of research and actually understanding the protocols that you use. Most people don't, so they tend to get burned. Countless of times I've had to help family and friends to avoid scams that they come across, and it honestly makes me kind of glad that what is happening now is happening, it'll shake off all of these scammy projects that are just trying to scam people.

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shuntress 4y ago

>Can someone actually explain what the intrinsic use of coins is supposed to be It's supposed to be a digital equivalent to physical cash. Specifically the ability to be transferred directly from one individual to another without either having any special permissions, access, or power. The ultimate goal is for all transactions to be completely stateless. Meaning, you should be able to "drop" a bitcoin into a digital "bucket" without needing any kind of pre-existing authorization/account/identification/association/etc with the holder of the bucket (or any third-party acting on their behalf). You are correct in your assessment that in their current (and foreseeable future) states, cryptocurrencies are completely useless as actual currency.

nikanj 4y ago

Drugs. Other contraband too. Blackmail, ransomware, circumventing anti-money laundering / taxation / capital controls / etc Not many legal use cases,k but there are massive dark industries that would suffer greatly if cryptos disappered.

nlitened 4y ago

I can explain seriously and answer follow-up questions. I will simplify and just highlight the most valuable current use case, there might or might not be others now or in the future. The value of ether (ETH) is to be a currency that you need to spend in order to include transactions into Ethereum's distributed ledger. Most useful transactions are transfers of stablecoins like USDT or USDC. USDT and USDC can be exchanged for goods and services all over the world, and are very convenient for any international transfers and cash exchanges bigger than 500 USD. Price of stablecoins is ideally tethered to the underlying fiat currency, so price swings don't matter. Price of ether is _whatever_, because usually your stablecoin ledger transaction fee is low enough, so price swings don't matter again.

secondcoming 4y ago
So in order to transact on 'The Blockchain' I'll need a stablecoin for the purchase and ETH in order to submit my transaction?
- nlitened 4y ago
  Yes, like when you go to a shopping mall, you do need fiat currency to purchase goods, _but_ you also need to keep your car's gas tank topped up to get there. Your car's gas price also fluctuates, but usually it does not affect your shopping plans too much, unless you're doing very large-scale shopping.
aeyes 4y ago
I fail to understand how this use of stable coins is better than licensed currency transfer companies. You still need to exchange your local currency twice on shady unlicensed crypto exchanges. Or am I missing something here? I regularly transfer thousands of Dollars to different countries, the provider I use usually gets the job done on the same day. There are also huuuge differences in crypto exchange rates depending on country. Crypto exchanges work with unfavorable FX rates when selling USDT unless you already have USD. Binance in my country is currently showing a 4% difference compared to exchange rates on XE.com. Even my bank gives me a better FX rate than that.

agumonkey 4y ago

one dude explained that they wanted to make a loan platform that would avoid usual bank management costs since it's automated, so he claimed the higher yields came from that. It seemed a coherent explanation to me (he could be lying too, but at least his talk had some foundations and not moonshots of potential decentralized nirvanian future)

pavlov 4y ago
How does the automated loans-on-blockchain platform discover someone’s real income and existing debts in a way that can’t be forged? If it doesn’t do that, it’s not really automating anything that banks currently do when deciding to extend you a loan. And if it uses existing sources like credit scores and the salary data sold by employers, then it’s merely the same as the systems banks and other consumer lenders already use.
- agumonkey 4y ago
  The risk managing part was not discussed indeed.

paxys 4y ago

Speculating is the intrinsic use

strangescript 4y ago

Its not practical as a global currency with regards to BTC. It never really has been. It is too slow and too expensive compared to centralized options. The idea of a neutral all digital currency sounds fantastic but it glosses over a key advantage of the US dollar. The dollar is backed by the US Gov't and the US military. It didn't just randomly become the defacto monetary standard in the world by accident. Price fluctuations would diminish with more adoption as well. We also interact with things that vary wildly in price year over year too, like the price of gas (oil). We have just become used to it. The dollar itself fluctuates a fair bit, the DXY index is at 106, and it will probably get much higher next year indicating a strong dollar if there is a global recession. Actual price adjustments are just slow to trickle down to consumers because of a lack of practicality of changing on the shelf prices each day. Also, inflation will drive prices higher, but even after the economy is back under control, prices rarely will go back down.

jeffreyrogers 4y ago

The only real use case for crypto has always been buying drugs online (and other, similarly illegal things that normal payment processors won't touch). Tons of hot air has been generated proposing other things but none of them have any product market fit once you remove the traders/speculators.

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doorman2 4y ago

I find it helpful to think about blockchains as the next step in the fintech ladder. Imagine you want to represent ownership of a company, i.e. stock. You don't need electricity to do that. You can accept orders in person, record ownership in a book, issue paper certificates, etc. However, when the mainframe was invented, it became easier to track ownership electronically. Using electronic transactions also made it possible for many more people to trade and expanded the types of products offered, e.g. options became commonplace. Now, the blockchain has arrived. It does everything a mainframe at a large financial institution can do, but it opens up the platform so that more complicated transactions can happen and democratizes the platform so that anyone with a computer can write their own smart contract. What we're seeing now is akin to the the dotcom boom / bust in the late 90s and early 2000s. A new technology has appeared on the scene which leads to two things: 1) People get ahead of themselves. In the late 90s, people could envision all the cool things the internet would unlock and tried to start businesses to realize the potential. Many of those business ideas would be viable today, but the tech wasn't there at the time leading to a lot of empty promises being sold. Today, people can envision how the blockchain will lead to the securitization of everything, but the tech isn't quite there to make the transition yet. 2) As with any optimism boom, there will always be crooks ready to separate a fool from their money.

MrMan 4y ago

I think algorand is by far the best crypto platform out there, but the sad part is that it's the economic / behavioral issues that hold crypto back. if you could earn Algo and it was widely adopted, it would be an attractive alternative currency and smart contract platform. but for me tech and adoption are like two out of four things needed to make crypto non-evil (literally) - the third is democratic governance. the fourth is environmental impact which Algorand checks off. But it's not democratically organized or run, which is a complete non-starter. the foundation that runs it is probably the least corrupt org I can think of in crypto (I am not an expert) but its still a group that hold a giant percentage of the existing coins, which is a huge non-starter as well, and there is no concept of citizen ship or personhood that maps to the real world. I dont believe in the decentralization nonsense and this pseudo anonymous thing over crypto is not good. to really run a DAO you need real people interacting in something like a co-op. kind of like the internet, actually. what some people call decentralization I call by an old fashioned name - distributed. there is another concept which is more to the point than the term centralization and it is concentration. The Gini index of a logical dimension of a system is more important to me than whether it is centralized per se. So voting power should not be too concentrated, wealth should not be too concentrated. We are a long way from a workable model for crypto that fulfills these criteria. Buterin who is a frontman for libertarians (and worse) who are actually evil is the closest thing we have besides the Algo founder to a non-greedy figurehead, but we need no figurehead. what has proven good enough for countries will prove good enough for crypto. democracy.