ETHEREUM COFOUNDER: There is 'a ticking time bomb' in cryptocurrencies | Hacker News Reader

ETHEREUM COFOUNDER: There is 'a ticking time bomb' in cryptocurrencies

businessinsider.com

17 pointsrandomerr16 comments

Altcoin promoter of overhyped altcoin complains about competition from other overhyped altcoins. World's smallest violin plays.

While your statement is true and funny, it also illustrates the conservative stewardship that a large stake engenders. Not really a bad thing.

Yes, ICOs are structurally terrible and not sustainable. Ethereum will implode at some point, and some time down the line, three or four major blockchain iterations from now, we'll get something sustainable that can actually be used to support real growth and live up to the potential that's fueling the current bubble.

>structurally terrible and not sustainable.

Heard the same arguments about bitcoin back in 2011

Yup, and it's still looking true about Bitcoin. See: next Tuesday.

caps is over the top IMO for an HN submission.

Sounds like typical Fed guidance :) Don't get carried away, focus on fundamentals, think long-term and don't get caught up in the hype/froth.

While I'm a big fan of ETC I think his statement is a beneficial consequence of very early ETH investors likely being billionaires at the current valuation.

If you tried to sell $10 million worth of ETH for dollars right now, what would happen?

Point taken, but chances are the amount you can liquidate to dollars is much higher than you might expect. There's widespread institutional participation and I'm under the impression that $50M to $100M would not be farfetched, albeit with a bit of a spread.

There was $2,923,270,000 worth of ETH changing hands in the last 24 hours.

Is there any measure of how much was exchanged out of ETH? If you wanted to pump that number up all you need to do is create lots of wallets and transfer ETH amongst them.

His figure is the volume of ETH / fiat trading, not the volume of ETH transfers.

Look @ http://coinmarketcap.com/

The question is whether you can get cash out of the exchange quickly. How many ETH exchanges could write a check for $10M?

You'd have to use one of the cryptocurrency desks (dark pools), and it would probably take place the same day or the next day.

Right. As Wall Street learned in the 2010 "flash crash" a few years ago, much of the "liquidity" created by high frequency trading is fake. When a big seller sold 9% of the trading volume and wanted real money, the entire market crashed for 36 minutes.

[1] https://en.wikipedia.org/wiki/2010_Flash_Crash

> much of the "liquidity" created by high frequency trading is fake

Are you referring to the strategy of placing and canceling limit orders that were never intended to clear?

I think it's just a matter of your definition of liquidity. If you use a trading strategy that assumes that all limit orders will remain there for 10 full minutes, you might turn out to be wrong, and if so your notion of the liquidity of the market will be wrong.

Liquidity is misleading in the same way that price is misleading. The price is the last price that a single unit was traded. Liquidity is the typically thought of as the supply or demand for additional transactions at or near the last market price, or a notion of how stable the price is to fluctuations in supply and demand.

The more volume that trades at a price, the more real that price is. An unfilled limit order contains zero price information, so anyone using it as information should be wary. It may be wishful thinking (typical) or a feint (in the case of some HFT strategies) but it is not evidence of a clearing price unless it clears.

Of course, the same applies to cryptocurrency prices. I spoke with someone who runs a big desk recently and was pretty surprised at how close he was able to come to "market price" for very large transactions.

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