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Fundamental issues of cryptocurrency economy: 1. Biggest pushers are seemingly tech-bros from FANG companies. These companies are laying off staff in record nu

Fundamental issues of cryptocurrency economy: 1. Biggest pushers are seemingly tech-bros from FANG companies. These companies are laying off staff in record numbers. The biggest cryptocoin believers therefore, will have less income than ever before (in ~3 months or so, after their severance is paid, they'll have to start drawing on savings if they didn't get a job yet... and getting a job in this economy is going to be harder) 2. Fed Rate hikes. Cryptocoins and stablecoins (especially "staking" concepts) were rationally attractive when your savings account returned 0% and when Treasury Bonds were 0.1% to 1.5%. A risky yield-earning instrument may have been... erm... risky, but it seemed like even with the risks you'd beat a savings account. Today, HYSA savings accounts are 3% and the St. Louis Fed President argues they're going to 5%. Its a much more difficult to sell yield-making instruments (such as "staking" Ethereum) when the "safe" risk-free rate is at 5%. 3. Inflation. Instead of being a hedge on inflation, cryptocoins collapsed in the face of it. There are still inflation worries in the economy. 4. Mainstream awareness. Earlier this year, Cryptocoins bombarded the typical normie with advertisements. Matt Daemon said "Fortune favors the bold" for Crypto.com. FTX had Larry David do ads for them. FTX bought out the Miami Heat stadium naming rights. NFTs were on talk-shows, being shilled by Jimmy Fallon and Paris Hilton. Cryptocoin's era of growth is over, everyone is now "aware" of cryptocoins and adjacently NFTs. Entering the public consciousness only happens once, from now and forever more, people are "aware" of cryptocoins and have formed opinions on it. It will not happen again. 5. Scammy reputation. The Celsius and FTX bankruptcies are in the public consciousness. (See #4: for many people, FTX was the public face of cryptocoins thanks to their superbowl ads). That these institutions couldn't even last 1 year after their commercial will forever damage cryptocoin reputation. Sure, Mt. Gox had similar issues back in 2014, but Mt. Gox didn't buy the naming rights to a stadium or host Superbowl commercials. Seeing cryptocoins grow under these circumstances seems like a longshot to me.

jimcavel888 4y ago
latchkey 4y ago
ETH validators are around 8% right now, not 5%. The 'risk' is that the developers don't successfully implement withdrawal or that the whole network goes down. Two, imho, huge risks and part of the reason I don't personally stake at this time. That said, eip-1559 and 'the merge' did happen, without much of a hitch at all, which are pretty major accomplishments. Confidence in the developers is a bit higher now as a result. source: validator rewards section of https://ultrasound.money/ https://ultrasound.money/
- colineartheta 4y ago
  Care to comment on the Ethereum Foundation now removing all reference to a date in which “staked” ETH can be withdrawn? Or perhaps commenting on the fact that to become a validator requires 23 ETH, or approximately $28,000 of upfront investment that cannot be withdrawn in order to achieve your stated yield?
  - latchkey 4y ago
    32 ETH
  - dragontamer 4y ago
    Indeed. It should be noted that the Fed Rate / Risk Free Rate / Overnight lending rate is... well... overnight lending. Its the rate you get for a 1-day loan for tomorrow. Its about as risk-free as you can get. So when the Fed Rate goes from 3% to 3.75% or whatever (for overnight loans), all other loans (ie: riskier 6-month, or 12-month, or 10-year, etc. etc.) have to go up in yields to compensate. ------- Its difficult to compare Ethereum "staking" with traditional finance, because traditional finance has much better guarantees. My SWVXX and VMFXX money at 3.6% can be withdrawn (or deposited) at 5pm every business day. Its extremely liquid, far more so than Ethereum staking. Further adding to the complications, Coinbase allows you to trade cbETH (wrapped Ethereum), which is Ethereum that has been staked at Coinbase. Its not entirely clear when cbETH can be withdrawn and turned back into ETH.
    - latchkey 4y ago
TacticalCoder 4y ago
> 3. Inflation. Instead of being a hedge on inflation, cryptocoins collapsed in the face of it. I don't disagree with the other points but... That one remains to be seen. Bitcoin was precisely created as a gigantic middle finger to the central bank's endless money printing to bail out the financial system. That's the message in the genesis block ("Chancellor on the brink of second bank bail out": it's as political as it gets). The early adopters, before the poker players (Bitcoin was used to facilitate players-to-players transfer on poker sites before Silkroad and drugs where I thing IIRC), were libertarians and anarchists fed up with the FED. This hasn't changed, so far. There are only going to ever be 21 million Bitcoin. Ethereum, at the moment, is deflationary (more ETHs are burned than created through proof-of-stake). You get, what, 5% on your USD: great. But real inflation is, say, 12%. So that's still 7% down. There's a price at which people are going to enter BTC and Ethereum with the promise that it won't be inflated to death. Many may not like it. "Inflation in the two digits, good!. Helicopter Ben: savior of the economy. Bank bail outs mutualizing losses: perfection by our beloved state!". But there are still people out there who see the value in something that cannot be printed at will. I'd say especially so when the FTX and Tether of this world, at times in bed with officials, are printing at will their worthless token and dumping them on retail with the blessing of the New York Times. > There are still inflation worries in the economy. Precisely. I'm certainly not keeping all my life savings in cryptocurrencies. I was all in cash after the war in Ukraine started and I'm certainly enjoying the firesales on many stocks right now (Stanley, Makita, ASML, Intel, 3M and a shitload of stocks I handpicked are totally on sale: it was time to sale when everybody was yelling "TINA" and the war in Ukraine started and it's time to buy now that everybody is yelling "falling knifes, it may fall another 90%"... Yeah, sure. If all the companies I handpicked are falling 90% more, I'll load up the truck and retire in a fancy yacht in a few years). But this entire USDT/FTX scam (with the blessing of the SEC and CFTC), these shitty tokens created out of SBF's farts (sorry but it's how it is) and these centralized exchanges makes me want to go bullish on BTC / ETH. I'm waiting for tether to go bust to go in bigger. Many hate it here: BTC may not be worth much but "your keys your coins" and as long as it's not totally outlawed, nobody is going to prevent me from storing BTC (mo matter their value) on a hardware wallet. And f--k fractional reserve banking, f--k bail-ins (Cyprus), f--k the vicious states stealing people's money (Spain, where banks offered crazy return rates to their customers then defaulted on the principal) and certainly f--k mutualized bank bailouts. I have zero confidence in USD / EUR. I have zero confidence in banks. I believe in stocks and, yes, in BTC and ETH on my own hardware wallet.

jimcavel888 4y ago

latchkey 4y ago

ETH validators are around 8% right now, not 5%. The 'risk' is that the developers don't successfully implement withdrawal or that the whole network goes down. Two, imho, huge risks and part of the reason I don't personally stake at this time. That said, eip-1559 and 'the merge' did happen, without much of a hitch at all, which are pretty major accomplishments. Confidence in the developers is a bit higher now as a result. source: validator rewards section of https://ultrasound.money/ https://ultrasound.money/

colineartheta 4y ago
Care to comment on the Ethereum Foundation now removing all reference to a date in which “staked” ETH can be withdrawn? Or perhaps commenting on the fact that to become a validator requires 23 ETH, or approximately $28,000 of upfront investment that cannot be withdrawn in order to achieve your stated yield?
- latchkey 4y ago
  32 ETH
- dragontamer 4y ago
  Indeed. It should be noted that the Fed Rate / Risk Free Rate / Overnight lending rate is... well... overnight lending. Its the rate you get for a 1-day loan for tomorrow. Its about as risk-free as you can get. So when the Fed Rate goes from 3% to 3.75% or whatever (for overnight loans), all other loans (ie: riskier 6-month, or 12-month, or 10-year, etc. etc.) have to go up in yields to compensate. ------- Its difficult to compare Ethereum "staking" with traditional finance, because traditional finance has much better guarantees. My SWVXX and VMFXX money at 3.6% can be withdrawn (or deposited) at 5pm every business day. Its extremely liquid, far more so than Ethereum staking. Further adding to the complications, Coinbase allows you to trade cbETH (wrapped Ethereum), which is Ethereum that has been staked at Coinbase. Its not entirely clear when cbETH can be withdrawn and turned back into ETH.
  - latchkey 4y ago

TacticalCoder 4y ago

> 3. Inflation. Instead of being a hedge on inflation, cryptocoins collapsed in the face of it. I don't disagree with the other points but... That one remains to be seen. Bitcoin was precisely created as a gigantic middle finger to the central bank's endless money printing to bail out the financial system. That's the message in the genesis block ("Chancellor on the brink of second bank bail out": it's as political as it gets). The early adopters, before the poker players (Bitcoin was used to facilitate players-to-players transfer on poker sites before Silkroad and drugs where I thing IIRC), were libertarians and anarchists fed up with the FED. This hasn't changed, so far. There are only going to ever be 21 million Bitcoin. Ethereum, at the moment, is deflationary (more ETHs are burned than created through proof-of-stake). You get, what, 5% on your USD: great. But real inflation is, say, 12%. So that's still 7% down. There's a price at which people are going to enter BTC and Ethereum with the promise that it won't be inflated to death. Many may not like it. "Inflation in the two digits, good!. Helicopter Ben: savior of the economy. Bank bail outs mutualizing losses: perfection by our beloved state!". But there are still people out there who see the value in something that cannot be printed at will. I'd say especially so when the FTX and Tether of this world, at times in bed with officials, are printing at will their worthless token and dumping them on retail with the blessing of the New York Times. > There are still inflation worries in the economy. Precisely. I'm certainly not keeping all my life savings in cryptocurrencies. I was all in cash after the war in Ukraine started and I'm certainly enjoying the firesales on many stocks right now (Stanley, Makita, ASML, Intel, 3M and a shitload of stocks I handpicked are totally on sale: it was time to sale when everybody was yelling "TINA" and the war in Ukraine started and it's time to buy now that everybody is yelling "falling knifes, it may fall another 90%"... Yeah, sure. If all the companies I handpicked are falling 90% more, I'll load up the truck and retire in a fancy yacht in a few years). But this entire USDT/FTX scam (with the blessing of the SEC and CFTC), these shitty tokens created out of SBF's farts (sorry but it's how it is) and these centralized exchanges makes me want to go bullish on BTC / ETH. I'm waiting for tether to go bust to go in bigger. Many hate it here: BTC may not be worth much but "your keys your coins" and as long as it's not totally outlawed, nobody is going to prevent me from storing BTC (mo matter their value) on a hardware wallet. And f--k fractional reserve banking, f--k bail-ins (Cyprus), f--k the vicious states stealing people's money (Spain, where banks offered crazy return rates to their customers then defaulted on the principal) and certainly f--k mutualized bank bailouts. I have zero confidence in USD / EUR. I have zero confidence in banks. I believe in stocks and, yes, in BTC and ETH on my own hardware wallet.