The fact that there is so much money, SO much money, being thrown around a technology that is dodgy at best, and a scam at worst, is terrifying. I'm certain this technology will find a place in the future after it has matured, but hoo boy are there gonna be big winners and big losers until it shakes out.
> The fact that there is so much money, SO much money, being thrown around a technology that is dodgy at best, and a scam at worst, is terrifying.
We have very little evidence to substantiate the actual quantity of real dollars in this system.
The NYAG settlement with Tether shows that it's backed by bailing wire, chewing gum and hope [1]. USDC has stopped publishing their attestations as of January (which, btw, - and I can't believe I'm going to cite Tether's Saul Goodman but - aren't audits [2]) and since then it's market cap has doubled. USDT and USDC both use similar weasel wording about the nature of what backs them.
An attempted ETF a couple of years ago admitted 95% of all trading volume in the crypto space was fake. [3]
The CFTC smacked Coinbase because literally 99% of all Litecoin trading volume in 2017 was one dude, Charlie Lee - the LTC founder, wash trading internally [4]. Lee then took advantage of the market cap he synthesized, dumped literally all his holdings at the peak and sailed off to an island.
This is just a couple of examples off the top of my head. It's all fraudulent.
We have very little evidence to substantiate the actual quantity of real dollars in this system.
This is especially true of NFTs. With each item unique, there's no meaningful market price. There are just occasional stories about sales.
This is important. With a commodity that has an active market, prices have some meaning. You can usually sell your asset at roughly the current market price. This is not true of unique items. You have to find a buyer who wants your specific thing.
This works just like collectables on eBay. Here's a current collectable.[1]
"Rare Tag Error Retired Ty Beanie Baby Claude The Crab 1996 Collector - US $1,235.00 [ 0 bids ]" Note the "0 bids". Now keep scrolling down until something shows up with a bid.[2] "Princess diana beanie baby 1st edition 1997 w/o tag US $0.99 [ 1 bid ]" That's what a willing buyer is prepared to pay. You can scroll through page after page of Beanie Baby asking prices without seeing anything with a bid.
That's what an NFT market looks like when you want to sell.
The NFT market is useful only to those with a fan base they can monetize. If you're the fan, you're the sucker.
>>> We have very little evidence to substantiate the actual quantity of real dollars in this system.
This is one question I'm really interested in: How much money did Coinbase, Kraken and Binance receive so far? That's pretty much the whole real worth of the crypto space (IMO). Everything else is just "look I have 1000000 signed pieces of papers, I sold one for 1000 to my friend, so I'm a billionaire now."
> The CFTC smacked Coinbase because literally 99% of all Litecoin trading volume in 2017 was one dude, Charlie Lee - the LTC founder, wash trading internally [4].
I don’t have any skin in this. But I found it interesting so read it and the timelines don’t seem to match your claim here about Charlie Lee.
“The order also finds that over a six-week period—August through September 2016...”
Note he sold in December 2017. Well over a year after this. So it sounds like maybe that could’ve been him when he was working there. But anything subsequent is on Coinbase. (Sadly not surprising that SV mindset would legitimize securities fraud as a means for growth hacking since they make up numbers everywhere else.)
> We have very little evidence to substantiate the actual quantity of real dollars in this system.
I assume the SEC at least has some idea of how much has been deposited through SEC regulated exchanges. That might be the most useful place to get a rough low ball number.
All of these are great things happening for regulations getting stronger over time.
But at the same time there's one thing that you can be sure of: when you own Bitcoin, you can go through the whole blockchain with a client even from many years ago, and have cryptographic proof that you own it, and that the blocks were created according to Bitcoin's rules.
This is really useful information. I have a cadre of friends who are serious crypto heads and I almost dread hanging out with them because they are so deep into it. I'd be curious to hear their perspective after I understand these links.
> This is just a couple of examples off the top of my head. It's all fraudulent.
I'm not sure how you go from a few examples to -> "it's all fraudulent". Does crypto attract gamblers, crooks and manipulators? Yes, 100%. Does the same kind of behavior also happen on the stock market? Yes, 100%[1][2]. Hedge funds on wall street are doing all kinds of manipulations as well, it doesn't make the whole stock market fraudulent.
>being thrown around a technology that is dodgy at best
I have yet to meet someone that says this who has foreseen the implications of defi. In my mind, as an early bitcoiner, that was the original promise of bitcoin.
A list of tokens by locked in value is full of systems that are revolutionizing finance: https://defipulse.com/ Defi protocols are providing useful services and are making money. I doubt I could overstate their enormity.
There's a huge difference between the two worlds. Don't confuse dogecoin's "I like the stonk" hype with Maker's muscle. The "blockchain" isn't the point. The systems made possible on top were always the point, and that's what makes "blockchain" so valuable.
There's a lot of snake oil speculative no knowledge spam from people that easily give off a bullshit vibe. So I get that a lot on HN that haven't closely looked at it would be turned off by that and just dismiss it entirely out of hand.
There's some real stuff going on here too and it's worth a deeper look - I think the knee-jerk dismissal is a mistake. At this point over ten years in, it's worth at least taking a deeper look at even if (I'd argue especially if) you're a skeptic.
I also suspect there's some pseudo-intellectual skepticism cynicism as signaling going on like there always is.
Some of the tech in the web3 space is so genuinely interesting [0]. And defi's evolution has been nothing short of rapid. It is kind of sad that crypto-currency related topics don't invite as much positive attention and technical discussion on HN.
[0] Especially, XaaS apps on top of Ethereum v2, Cosmos, and Polkadot.
I'm pro-crypto-currency but I don't understand this, explanation follows:
> A list of tokens by locked in value is full of systems that are revolutionizing finance: https://defipulse.com/ Defi protocols are providing useful services and are making money. I doubt I could overstate their enormity.
The top ones are all lending and exchanges.
Lending money to someone isn't revolutionary, it's been possible for centuries - and given how easy crypto is to steal and never return, I wouldn't WANT to lend it to anyone anyway!
And decentralized exchanges are cool for sure, but they are self-serving in terms of only needing to exist because cryptocurrencies exist. So they can't really be used as a pro-crypto argument like you're doing because then the solution you're arguing for would only need to exist to solve a problem which it has created itself.
> I have yet to meet someone that says this who has foreseen the implications of defi.
Can you give a use case that isn’t intra crypto speculation? That seems to be what Defi consists of at present.
Ultimately finance serves to help with capital allocation and production in the real economy. So: is Defi helping the real economy do things it couldn’t do before? Or, is there a plausible use case for this in formation?
Please be specific. A lot of people seem enthused by this, but no one has been able to explain it in a way that shows the use.
The top 7 on Defi Pulse (1) are currency exchanges ("liquidity pools") and overcollateralized loans, which are mostly used by speculators to get leverage. Useful, I guess. But enormous — only in monetary terms.
I believe crypto & blockchain technologies have a future. But we ain't there yet.
(1) and I suspect more than that, those are just those I'm familiar with.
FYI, but this is HN, so you might like to know that "enormity" has a specific meaning with negative connotation, it's not just a way to describe something as "really big," (enormous) but rather "really evil."
> The fact that there is so much money, SO much money, being thrown around
This is the kind of thing that happens when the wealthiest people have so much more than everyone else: there are enough people with vast amounts of money that they have no idea what to do with that they can easily fund a bubble like this, especially when they are promised by smart-sounding geeks that this is The Next Big Thing that will a) let them get in on the ground floor of a whole new currency, and b) give them a way to leverage their wealth to retain and increase their power as we gradually move more and more toward a post-scarcity society.
Similar to dot-com bubble where people were investing their life savings into companies that just had a domain name with no business plan whatsoever. Lots of them blew up, but the ones that made it through ended up becoming trillion dollar companies.
Only if you use a circular definition of made it through which means became a trillion dollar company.
Plenty of companies made it through but never recovered their dotcom market cap or prestige, a few prominent examples: Csco, hpq (only recently passed the 2000 price), yhoo, emc, vrsn, real networks. There were plenty of also-rans who limped through but didn’t justify the hype pricing years later, and the real revolution came to fruition years later with mobile computing and mass-market online stores, but there was definitely underneath it all an obvious and real information revolution which the dotcom bubble was merely irrational euphoria about - everyone knew sonething big was happening, even if they rejected the crazy prices.
I sincerely don’t think this crypto bubble is similar, because there is no there there amd because almost all assets are severely overpriced right now - crypto is full of scams and nobody is actually using it any more as a currency, this means all these joke coins worth 100s of millions are going to zero, no doubt just after joe public buys in. There’s a reason coin base insiders are frantically selling as soon as they can and more and more frauds are coming to light. Even the more legitimate companies in this space are full of fraud.
Yes, it's like that, but with the completely unregulated trading environment reminiscent of the Roaring 20s. That's why it's much, much worse. The dot-com bubble was driven by margin, enthusiasm and poor decision making. This one's got all those plus the hallmarks of the 20s: insane leverage (see: DeFi), bonkers leverage (see: BitMEX), and a fictional currency being printed at a rate of billions of dollars per week that's then used to prop up the prices of the assets themselves.
It's basically the dot-com bubble, the roaring 20s and 2008's CDO shell game rolled into one.
The last part is why so much money is in it. Everyone remembers how everyone said dot.com was over in 2002 when the biggest dot.coms were yet to come. Everyone remembers when everyone laughed at Tesla and SpaceX. Everyone remembers Bitcoin at $1.
There is a hell of a lot of FOMO around.
There are also record low interest rates not just in the USA but globally, and that is inflating every asset at once.
If there is a crash I don’t think it will just be cryptocurrency. It will be broad and deep.
I see this too. Almost every asset class is moving together. When interest rates can't be dropped further then the real problems will begin. Banks have built floors into their loans so that variable rates can't drop below zero already. At the point when interest rates drop below zero, lower interest rates will actually harm the economy rather than help it and then we'll see everything come crashing down.
Un-alterable ledgers like blockchain are incredibly useful for legal and economic applications. Unfortunately there are a lot of caveats that need to be worked out, and crypto is finding them at scale.
While you wrote this, your country's Central Bank printed a few billions (or trillions, if you are american) in your currency, so that your money now is worth a lot less than before.
It's understandable why people consider 100% of crypto to be a scam.
But several projects have an actual P/E ratio now. You can't deny a P/E ratio. Value is being created here.
In 2013 bubble everything was bitcoin clone but "better". No cash flow.
In 2017 it was unregulated securities - illegal, no cash flow.
In 2021 with Defi you don't need to struggle to explain anything.
People get paid for providing capital at a higher rates than in traditional finance because smart contracts are removing friction. Stakeholders get paid dividends for governance, just like a normal company.
> You can't deny a P/E ratio. Value is being created here.
Oh yes, yes you can. You're talking about a currency exchange, not a commodity. I guess you weren't around for the last two bubbles.
There literally is no value being created. Coinbase earnings are based on people paying to use its service, and that service is trading imaginary currency with no intrinsic value. Unlike a semiconductor, oil, or even industrial labor.
Madoff had a price to earning ratio too. I don't think that variable doesn't say what you think it does. Higher rates implies more risk which certainly applies to cryptocurrencies.
LOL defi is a neat idea but the current reality is order of magnitude slower and orders of magnitude more expensive than "legacy". It adds a lots of friction. Players "get paid" because folks can't read smart contracts and see that behind the cover story it's just flows from new players to exiting players, which looks good as long as inflows are larger than outflows, which of course will last forever.
Can you please give specific examples which are enabling things that aren’t intra crypto speculation?
The only examples I’ve seen tend to be services that make money off crypto investing, which is obviously circular: those revenues ultimately depend on there actually being value in crypto.
A lot of people that invest simply lack better alternatives. On the other hand the people that could invest reasonably like homeowners in energy efficiency do not have the money to do so, with the current monetary policy. Even if they had, they would gain more from investing in overvalued assets that have a growth in value detached from reality, driven by loose money supply for investors.
Wow, this is a painfully misinformed statement. Like, so misinformed I want to hug you.
Index funds have consistently beaten inflation by double digits and have practically nil management fees. They are vastly more secure alternative to imaginary crypto exchanges.
Yes. And I think the OP correctly suggests that this... not unique, it's increasing parts of the economy.
> It is understandable enough to want to participate in such collective delusions. It’s much more fun to be awed by not getting a movie than to realize that you do get it and it’s just boring. This same idea also helps explain speculative bubbles. It’s more fun to believe in magic than to recognize how much of financialized capitalism is just scams and pyramid schemes. Nonetheless, if the popular press is full of explainers “clarifying” what a “very complicated” investment phenomenon is all about, hide your wallet: You are being shilled into a game of Three-Card Monte.
Not sure if this is a nit or not, but NFTs rarely represent ownership of anything other than the NFT. You're not really buying the art, you're buying association with the art. At least if I buy a Jackson Pollock, but the world realizes he's a one-gimmick artist, I can still enjoy the painting. If the world stops caring about NFTs, you're left with "cool story, bro."
Buying these NFTs is more like buying your name on some dedication plaque no one will read unless directed to do so; people do this, sometimes with millions of dollars, because it is, in fact, a "cool story" vs. merely sending an anonymous envelope of cash to the owners of the building (maybe a University or local government).
It's quite a bit different, since your donation doesn't imply ownership of the plaque (or even of anything built by the donation). The non-fungibility of the plaque is irrelevant because you don't own it, and therefore can't resell it, and therefore can't expect it to appreciate in value, and therefore nothing approaching a pyramid scheme is possible.
More like you are buying a unique business card with an address of building where dedication plaque is located. (a .json file with a hyperlink)
Not only it's mostly useless since anyone can print the same address anywhere they want, but also it WILL become literally useless when that address changes.
A successful pyramid scheme has a couple of valuable attributes: "plausible deniability", i.e. the ability to disguise the pyramid scheme to convince as many people as possible that it isn't actually a pyramid scheme, and "self-sustainability", i.e. the ability to keep the scheme going for as long as possible without collapsing.
The article's headline suggests the article is about "plausible deniability". This has indeed been improving over time as the schemes have become more sophisticated. With Bitcoin for example, articipants could say "it's not a pyramid scheme because you can buy a pizza with it", although that was about the extent of it in practical terms (excluding more nebulous claims like "it is going to change the world", "it is the internet of money" etc.). However, with more sophisticated schemes like Ethereum, participants used to say things like "it's not a pyramid scheme because you can run DApps on it", now say things like "it's not a pyramid scheme because you can do DeFi with it", and may in future have something else with which to deny it is a pyramid scheme.
However, the article itself talks specifically about NFTs. These aren't so much about "plausible deniability", but about "self-sustainability". People need to buy Ethereum to buy the NFTs. It is like the ICOs - people needed to buy Ethereum to participate in the ICOs. When the ICOs dried up and the ICO companies started cashing out their Ethereum the prices collapsed, but now we have NFTs to take their place. If NFT sales dry up and NFT sellers cash out the prices may collapse again, but by then there may be something else to take their place and keep the scheme self-sustaining.
Forgive my ignorance, but NFTs use the same algos as bitcoin, correct? And are the blockchains public, so that you may know who owns the NFT for the physical item? If that is all true, then trying to launder money via an NFT means that law enforcement can access the blockchain and see the whole chain of custody too, right?
Blockchains are public, and everyone can see transactions, but they are tied to an address and not to a person. The person who controls the address can make transactions without revealing who they are. That’s how we know Satoshi owns billions of dollars worth of bitcoins but we don’t know who Satoshi is.
However, if the address is revealed to belong to a person in the real word, they are no longer anonymous and you can see all of their transactions.
NFTs compete with sketchy charities in this case. Donating to a politician's charity works just as well, except that the charity's funds are difficult to spend later. NFTs solve this problem.
I disagree, but to each its own. I thought it was full of condescending takes.
For example:
- "getting" Memento does not make it boring.
- Finding the art world being often vacuous does not mean you are an acculturated ignoramus.
- Electricity does not make blockchain valuable, it's both the social and proof-of-work, the electricity cost is incidental and unrelated. (Bitcoins and NFT works even if you are ignorant of its inner workings.)
Okay, I use NoScript. It's a hassle, but it's an eye opener, so I keep using it. Here, I needed yet again to enable JavaScript to read what ought to be a static, text heavy article.
Nothing new so far. What's interesting however is that instead of the article, I didn't get the usual blank page. Instead, I could read the following quote:
> "Appropriate technology" was a movement beginning in the late 1960s that aimed to shift the emphasis from mass technology to smaller-scale, affordable technologies, informed and targeted to local needs and customs. Many of its ideas are as relevant today. So is one of its major shortcomings: why would we rely on technology to mitigate the harm technology does?
How ironic. When trying to disable a technology that's quite useless as displaying text (and more often than not is more about tracking me than serving me), I got a lecture on appropriate technology. And a fairly good one at that, which should probably be reflected on by proponents of crypto currencies.
I have NoScript too. I, too, had nothing on the screen but instead of enabling the JS for the site I switched to reader mode and boom! the static text heavy article was before my eyes. ¯\_(ツ)_/¯
Go figure. Personally I'm able to reproduce the issue: with JavaScript on, no problem. Disable it, I'm not redirected yet, but I see the appropriate measure quote. Re-enable it, and I'm redirected to the appropriate measure article.
I still argue that JavaScript is no an appropriate technology to display static text (at least not if we care about screen readers).
People overpaying for serial numbers loosely related to jpgs is terrible in my opinion. There's truly intelligent and useful things going on in cryptocurrency. Don't like the bubbles? There's billions in stable coins tied to the dollar, like the $11 billion in US based USDC. There's scams galore, just like in all other markets, but this one actually makes technical progress day by day.
> Don't like the bubbles? There's billions in stable coins tied to the dollar, like the $11 billion in US based USDC.
Unless I'm trying to avoid high transaction fees when exchanging currency with an undeveloped banking system with dollars, what's the point? My dollars already work fine, and for large amounts, international wire transfers work well.
It is not that complex actually, you just have to learn more about it and read a lot of information on the internet. Right now cryptocurrencies might not be that popular but in the future I am sure that they will replace regular currencies, but for now people don't really trust the technology. Many years ago when credit cards came out, the majority of people didn't trust the technology and preferred using cash, I still know some people who are like that. So invest in it now before it's too late.
Readit News
We have very little evidence to substantiate the actual quantity of real dollars in this system.
The NYAG settlement with Tether shows that it's backed by bailing wire, chewing gum and hope [1]. USDC has stopped publishing their attestations as of January (which, btw, - and I can't believe I'm going to cite Tether's Saul Goodman but - aren't audits [2]) and since then it's market cap has doubled. USDT and USDC both use similar weasel wording about the nature of what backs them.
An attempted ETF a couple of years ago admitted 95% of all trading volume in the crypto space was fake. [3]
The CFTC smacked Coinbase because literally 99% of all Litecoin trading volume in 2017 was one dude, Charlie Lee - the LTC founder, wash trading internally [4]. Lee then took advantage of the market cap he synthesized, dumped literally all his holdings at the peak and sailed off to an island.
This is just a couple of examples off the top of my head. It's all fraudulent.
[1] https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen...
[2] https://twitter.com/bitcoinlawyer/status/1386146486359150597
[3] https://cointelegraph.com/news/bitwise-calls-out-to-sec-95-o...
[4] https://cftc.gov/PressRoom/PressReleases/8369-21
This is especially true of NFTs. With each item unique, there's no meaningful market price. There are just occasional stories about sales.
This is important. With a commodity that has an active market, prices have some meaning. You can usually sell your asset at roughly the current market price. This is not true of unique items. You have to find a buyer who wants your specific thing.
This works just like collectables on eBay. Here's a current collectable.[1] "Rare Tag Error Retired Ty Beanie Baby Claude The Crab 1996 Collector - US $1,235.00 [ 0 bids ]" Note the "0 bids". Now keep scrolling down until something shows up with a bid.[2] "Princess diana beanie baby 1st edition 1997 w/o tag US $0.99 [ 1 bid ]" That's what a willing buyer is prepared to pay. You can scroll through page after page of Beanie Baby asking prices without seeing anything with a bid.
That's what an NFT market looks like when you want to sell.
The NFT market is useful only to those with a fan base they can monetize. If you're the fan, you're the sucker.
[1] https://www.ebay.com/itm/194065105880
[2] https://www.ebay.com/itm/254955747357
I don’t have any skin in this. But I found it interesting so read it and the timelines don’t seem to match your claim here about Charlie Lee.
“The order also finds that over a six-week period—August through September 2016...”
Note he sold in December 2017. Well over a year after this. So it sounds like maybe that could’ve been him when he was working there. But anything subsequent is on Coinbase. (Sadly not surprising that SV mindset would legitimize securities fraud as a means for growth hacking since they make up numbers everywhere else.)
I assume the SEC at least has some idea of how much has been deposited through SEC regulated exchanges. That might be the most useful place to get a rough low ball number.
But at the same time there's one thing that you can be sure of: when you own Bitcoin, you can go through the whole blockchain with a client even from many years ago, and have cryptographic proof that you own it, and that the blocks were created according to Bitcoin's rules.
If you behave anywhere near as absurdly as the traditional financial system then everyone calls you a scam.
I'm not sure how you go from a few examples to -> "it's all fraudulent". Does crypto attract gamblers, crooks and manipulators? Yes, 100%. Does the same kind of behavior also happen on the stock market? Yes, 100%[1][2]. Hedge funds on wall street are doing all kinds of manipulations as well, it doesn't make the whole stock market fraudulent.
1: https://www.wsj.com/articles/what-is-archegos-and-how-did-it...
2: https://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80...
I have yet to meet someone that says this who has foreseen the implications of defi. In my mind, as an early bitcoiner, that was the original promise of bitcoin.
A list of coins by market cap is full of absolute junk: https://www.coingecko.com/en
A list of tokens by locked in value is full of systems that are revolutionizing finance: https://defipulse.com/ Defi protocols are providing useful services and are making money. I doubt I could overstate their enormity.
There's a huge difference between the two worlds. Don't confuse dogecoin's "I like the stonk" hype with Maker's muscle. The "blockchain" isn't the point. The systems made possible on top were always the point, and that's what makes "blockchain" so valuable.
There's a lot of snake oil speculative no knowledge spam from people that easily give off a bullshit vibe. So I get that a lot on HN that haven't closely looked at it would be turned off by that and just dismiss it entirely out of hand.
There's some real stuff going on here too and it's worth a deeper look - I think the knee-jerk dismissal is a mistake. At this point over ten years in, it's worth at least taking a deeper look at even if (I'd argue especially if) you're a skeptic.
I also suspect there's some pseudo-intellectual skepticism cynicism as signaling going on like there always is.
Specifically on BTC: https://www.matthuang.com/bitcoin_for_the_open_minded_skepti...
Some of the tech in the web3 space is so genuinely interesting [0]. And defi's evolution has been nothing short of rapid. It is kind of sad that crypto-currency related topics don't invite as much positive attention and technical discussion on HN.
[0] Especially, XaaS apps on top of Ethereum v2, Cosmos, and Polkadot.
> A list of tokens by locked in value is full of systems that are revolutionizing finance: https://defipulse.com/ Defi protocols are providing useful services and are making money. I doubt I could overstate their enormity.
The top ones are all lending and exchanges.
Lending money to someone isn't revolutionary, it's been possible for centuries - and given how easy crypto is to steal and never return, I wouldn't WANT to lend it to anyone anyway!
And decentralized exchanges are cool for sure, but they are self-serving in terms of only needing to exist because cryptocurrencies exist. So they can't really be used as a pro-crypto argument like you're doing because then the solution you're arguing for would only need to exist to solve a problem which it has created itself.
So what is so revolutionary about these?
Can you give a use case that isn’t intra crypto speculation? That seems to be what Defi consists of at present.
Ultimately finance serves to help with capital allocation and production in the real economy. So: is Defi helping the real economy do things it couldn’t do before? Or, is there a plausible use case for this in formation?
Please be specific. A lot of people seem enthused by this, but no one has been able to explain it in a way that shows the use.
The beauty of it is that it's all software, no middle, back office teams running reports and reconciliation processes.
I believe crypto & blockchain technologies have a future. But we ain't there yet.
(1) and I suspect more than that, those are just those I'm familiar with.
This is the kind of thing that happens when the wealthiest people have so much more than everyone else: there are enough people with vast amounts of money that they have no idea what to do with that they can easily fund a bubble like this, especially when they are promised by smart-sounding geeks that this is The Next Big Thing that will a) let them get in on the ground floor of a whole new currency, and b) give them a way to leverage their wealth to retain and increase their power as we gradually move more and more toward a post-scarcity society.
Plenty of companies made it through but never recovered their dotcom market cap or prestige, a few prominent examples: Csco, hpq (only recently passed the 2000 price), yhoo, emc, vrsn, real networks. There were plenty of also-rans who limped through but didn’t justify the hype pricing years later, and the real revolution came to fruition years later with mobile computing and mass-market online stores, but there was definitely underneath it all an obvious and real information revolution which the dotcom bubble was merely irrational euphoria about - everyone knew sonething big was happening, even if they rejected the crazy prices.
I sincerely don’t think this crypto bubble is similar, because there is no there there amd because almost all assets are severely overpriced right now - crypto is full of scams and nobody is actually using it any more as a currency, this means all these joke coins worth 100s of millions are going to zero, no doubt just after joe public buys in. There’s a reason coin base insiders are frantically selling as soon as they can and more and more frauds are coming to light. Even the more legitimate companies in this space are full of fraud.
It's basically the dot-com bubble, the roaring 20s and 2008's CDO shell game rolled into one.
There is a hell of a lot of FOMO around.
There are also record low interest rates not just in the USA but globally, and that is inflating every asset at once.
If there is a crash I don’t think it will just be cryptocurrency. It will be broad and deep.
Always worth reiterating: the house always wins.
Why? It doesn’t solve any real problem that anyone has ever had.
It solved the problem of ransomware payments, before winlockers used to ask for gift cards which didn't scale well.
It solved the liberty reserve problem where the US government shuts down your sketchy no-KYC money transfer platform.
At a very general level cryptocurrency has solved the "anonymous online payments"-problem.
These are all very real problems solved by cryptocurrency.
Blockchains solve the problem of having a decentralized public database, currency is just a particular use
I‘ll leave the interpretation of this statement up to you ;)
Dead Comment
But several projects have an actual P/E ratio now. You can't deny a P/E ratio. Value is being created here.
In 2013 bubble everything was bitcoin clone but "better". No cash flow. In 2017 it was unregulated securities - illegal, no cash flow. In 2021 with Defi you don't need to struggle to explain anything.
People get paid for providing capital at a higher rates than in traditional finance because smart contracts are removing friction. Stakeholders get paid dividends for governance, just like a normal company.
Oh yes, yes you can. You're talking about a currency exchange, not a commodity. I guess you weren't around for the last two bubbles.
There literally is no value being created. Coinbase earnings are based on people paying to use its service, and that service is trading imaginary currency with no intrinsic value. Unlike a semiconductor, oil, or even industrial labor.
The only examples I’ve seen tend to be services that make money off crypto investing, which is obviously circular: those revenues ultimately depend on there actually being value in crypto.
But perhaps there are cases I’ve missed.
Which ones?
Yeah, stocks haven't had a good year in over a decade /s
What?!
Wow, this is a painfully misinformed statement. Like, so misinformed I want to hug you.
Index funds have consistently beaten inflation by double digits and have practically nil management fees. They are vastly more secure alternative to imaginary crypto exchanges.
> It is understandable enough to want to participate in such collective delusions. It’s much more fun to be awed by not getting a movie than to realize that you do get it and it’s just boring. This same idea also helps explain speculative bubbles. It’s more fun to believe in magic than to recognize how much of financialized capitalism is just scams and pyramid schemes. Nonetheless, if the popular press is full of explainers “clarifying” what a “very complicated” investment phenomenon is all about, hide your wallet: You are being shilled into a game of Three-Card Monte.
Not only it's mostly useless since anyone can print the same address anywhere they want, but also it WILL become literally useless when that address changes.
The article's headline suggests the article is about "plausible deniability". This has indeed been improving over time as the schemes have become more sophisticated. With Bitcoin for example, articipants could say "it's not a pyramid scheme because you can buy a pizza with it", although that was about the extent of it in practical terms (excluding more nebulous claims like "it is going to change the world", "it is the internet of money" etc.). However, with more sophisticated schemes like Ethereum, participants used to say things like "it's not a pyramid scheme because you can run DApps on it", now say things like "it's not a pyramid scheme because you can do DeFi with it", and may in future have something else with which to deny it is a pyramid scheme.
However, the article itself talks specifically about NFTs. These aren't so much about "plausible deniability", but about "self-sustainability". People need to buy Ethereum to buy the NFTs. It is like the ICOs - people needed to buy Ethereum to participate in the ICOs. When the ICOs dried up and the ICO companies started cashing out their Ethereum the prices collapsed, but now we have NFTs to take their place. If NFT sales dry up and NFT sellers cash out the prices may collapse again, but by then there may be something else to take their place and keep the scheme self-sustaining.
They are perfect because:
1) an unlimited number of them can be created quickly and easily
2) "artwork" value is subjective and therefore the value and short term appreciation/depreciation can't be easily questioned
I feel that I am missing something key though.
However, if the address is revealed to belong to a person in the real word, they are no longer anonymous and you can see all of their transactions.
For example:
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Nothing new so far. What's interesting however is that instead of the article, I didn't get the usual blank page. Instead, I could read the following quote:
> "Appropriate technology" was a movement beginning in the late 1960s that aimed to shift the emphasis from mass technology to smaller-scale, affordable technologies, informed and targeted to local needs and customs. Many of its ideas are as relevant today. So is one of its major shortcomings: why would we rely on technology to mitigate the harm technology does?
Turns out I got redirected to https://reallifemag.com/appropriate-measures/
How ironic. When trying to disable a technology that's quite useless as displaying text (and more often than not is more about tracking me than serving me), I got a lecture on appropriate technology. And a fairly good one at that, which should probably be reflected on by proponents of crypto currencies.
I still argue that JavaScript is no an appropriate technology to display static text (at least not if we care about screen readers).
Unless I'm trying to avoid high transaction fees when exchanging currency with an undeveloped banking system with dollars, what's the point? My dollars already work fine, and for large amounts, international wire transfers work well.
Only if you don't mind the deflation.
"USDC is issued by regulated financial institutions, backed by fully reserved assets, redeemable on a 1:1 basis for US dollars"
$11 billion dollars in reserved assets? Instantly redeemable? Why does this remind me of another scam with similarly "backed by assets" USDTs