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Comment by qeternity | Hacker News Reader

That’s because all of those things are predominantly traded due to their underlying utility. Like lotteries, which have no utility other than taxes and speculation, crypto currencies are almost entirely valuable as tools for speculation.

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What? Plenty of crypto projects have real utility. Also for a counterpoint: commodities such as gold and other precious metals are predominantly traded as speculative vehicles.

Which crypto projects are providing real utility to people outside the crypto space?

I can think of using bitcoin for remittances or drug purchases, but other than that I have trouble thinking of compelling examples.

Having only cursory knowledge of this space I'll take a stab at an answer: every consumer of a company that uses crypto internally. AWS doesn't provide any real utility for people outside of the AWS space except for consumers of companies that use AWS. Feel free to point out I'm wrong as again I don't follow this space in-depth.

What companies that I might be a customer of actually use crypto.

PayPal.

The difference is that it almost never makes sense for a company to use cryptocurrency technology "internally". If you don't want to be a Bitcoin-esque distributed anonymous organization -- if you want to be able to comply with laws or sign legally-binding contracts, for example -- traditional database technology is much cheaper and easier to use.

Some companies have announced cryptocurrency-related initiatives, but the only benefit to them is that lottery-like speculator behavior might pump up their stock. (See companies like Long Blockchain, formerly known as Long Island Iced Tea.)

Said more in another comment below but decentralized finance is pretty big. There are a lot of novel ways to deploy capital there. Check out any of the projects listed here and feel free to dig in more/ask questions: https://defipulse.com/

Filecoin, for one. Long-term data storage is essentially a byproduct of its mining algorithm, much like waste heat from Bitcoin miners.

Also, there's utility in a trustless, predictable, uncorruptible source of scarcity. Meanwhile, the supply of gold is difficult to audit, we have no idea to what extent nation states are manipulating its supply.

The value of a deflationary monetary policy cannot be understated.

Filecoin is useful, but incredibly overpriced and its model unfortunately perpetuates ponzi-like investing[0]. Also deflationary monetary policy is awful if you want people to spend money. Why buy something today if it will be cheaper tomorrow?

[0] https://www.reddit.com/r/CryptoCurrency/comments/mhpaar/file...

To be fair, the utility of crypto projects has remained primarily in theory. There is only minimal advantage to using crypto for actual payments in any legal transaction, and there are some pretty glaring disadvantages (volatility for one).

Also, I'm not sure your counterpoint is that legitimate. No one is investing in gold in the hopes that it doubles or triples in value, whereas that is clearly the hopes of many BTC or ETH buyers.

Regardless of the scale, the counterpoint is that many of the utility-first investments listed are not, in fact, based on utility. They are speculative investments based on hopeful price increases.

Ok, I’ll play along. Which projects are those?

Decentralized finance is pretty massive right now and has some really novel ways to deploy capital. It's not mainstream or outside of crypto perhaps but it is definitely based on strong utility.

Scroll down this list[0] and you'll find many projects providing a ton of utility (and some, I'm sure, that do not, but I'm definitely not claiming all crypto projects are legitimate/useful)

[0] https://defipulse.com/

Defi is just securitized lending with smart contracts. There is nothing novel about it. And all you do is borrow against your crypto so you can lever up and buy more crypto.

This is just adding margin into decentralized trading.

There are financial primitives that cannot exist in traditional finance that I'd call pretty novel. For example flash loans allow uncollateralized loans for millions of dollars[0]. Or take KeeperDAO[1] or Dai[2] or any of the other meta protocols generating returns by providing utility. Also the sheer fact that this is all decentralized/identity-less is already a novel aspect.

[0] https://aave.com/flash-loans/

[1] https://medium.com/keeperdao/a-keepers-guide-to-arbitrage-mi...

[2] https://makerdao.com/en/

Flash loans are just for trading arbitrage. Like I said, speculation is the only major use for cryptocurrencies.

You just blanket state that DAOs are providing utility. I asked you how these things are doing that.

Effective arbitrage is required for efficient markets. Again I'll repeat: the sheer fact that this is all decentralized/identity-less is already a novel aspect.

The specific DAO's I linked to build products that allow for shared arbitrage profits and an autonomous decentralized stablecoin respectively- the utility is found in the effective distributed markets they help optimize.

The very fact that you can trade coins or earn interest on a loan in a decentralized manner is the utility. Composable financial legos are pretty useful.

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