Hacker News Reader

> They’re buying them to horde so they can resell to other speculators when the price goes up.

It's almost like all interest in cryptocurrency is driven by greed and speculation. I've been learning more about it, and I'm pretty convinced this is the case. Go into any crypto space, and all people are talking about is yield, price action, how much their tokens have grown etc. I think the only thing I've seen that isn't purely about speculation is NFTs, oddly enough, which seem to be basically a fad.

To be fair though that's most things. That's the very purpose of the stock market. When you buy a stock most of the time most people don't care what the company it represents does, they just want the stock to go up. Same thing can be applied to most things there are vast warehouses full of art people will never see as its just owned as a tax dodge / speculation. Heck most of us work jobs we hate for nothing but money. Greed / speculation and the need for income make the world go round.

All those things still produce tangible goods at the end though, is the difference.

I can hate my job but at the end of the day I still created value for my employer. Companies on the stock market still create actual value for people, even if shareholders don't particularly care how they do it.

Does Facebook produce tangible goods?

Yes, a social network

How do you define tangible?

Bitcoin and Ethereum are also... networks!

Bitcoin produces a money that cannot be debased by inflation on a whim and which is very hard to forcibly confiscate. It can be transferred in minutes to any place on the globe, across any number of borders and past any capital controls, with transactions that cannot be stopped or censored by even the most powerful and invasive government on Earth. It's a safe haven from fiat currencies and almost a perfect medium of savings.

Unless we are working with a weird and strict definition of "tangible," I'd say it's tangible good that is, rightly, valued by many millions of people.

This seems detached from reality.

* Governments can and have confiscated bitcoin

* they can stop transactions by blocking access to wallets and exchanges etc

* They're a terrible medium for savings, unless you want your savings account to routinely swing wildly up and down in value

* 99.9% of people interested in Bitcoin do not care about these supposed benefits (which I'm skeptical even exist.) Yes there are the handful of goldbugs and libertarians, but most just want to see the number go up.

This is all well-trodden ground.

First, if you are concerned about things like confiscation, then you take the recommended security steps such as running your own node. At that point confiscation is indeed difficult (not impossible) and blocking access is essentially impossible. A government would have to prevent you and anyone who could act on your behalf from having any access to the Internet in order to stop the transaction being propagated on the network.

As for savings: I stand by my assertion. In its early years, yes, bitcoin is going to be volatile. But as anyone who has held bitcoin for 3+ years knows, it retains and grows value over the course of years exceptionally well. Savings implies a medium- and longer-term horizon — think years, not months — and on that horizon bitcoin has always been a winner.

I think there are more people in this world who care about the harms of inflation and capital controls than you are giving credit to. I care about preserving my wealth from debasement, as do all of the people I happen to know who hold bitcoin. And I suspect I might have a better feel for the "pulse" of bitcoin users than your 99.9% estimate, which (forgive me) strikes me as being detached from reality.

They do, but is the stock an actual tangible good? Companies with identical financials are not valued the same way. Look at a company like Tesla, its stock is pure speculation. I cannot physically hold my stock other than a piece of paper maybe that says I hold it. I cannot really do anything with it except hope to sell it to someone else for more money. It does not really grant me ownership If I tried to walk into an amazon warehouse screaming I an owner, I would be locked up and committed.

Cryptocurrencies fundamentally are about transactions. So I don't think it's appropriate to claim cryptocurrencies are any more driven by greed and speculation than any other common transactional activities, such as saving money in a bank account, mortgaging a home or buying a cup of coffee.

EXACTLY.

Name one crypto project making any sort of impact.

It wasn't always this way, in the early days there was genuine excitement around the technology. bitcointalk.org was a hive of ideas and opportunities. Bitcoin was used to transact internationally to trade goods, it was a payment medium as it was supposed to be. Even the bitcoin subreddit was good, but that turned first. Then all forums became dominated by price. I shudder at the posts I read these days about newbies to bitcoin. You are right it has become all about greed, nothing about the technology. When BTC hit $20k I remember telling a friend that while I was happy with the price it was ridiculous, bitcoin hadn't changed sufficiently to be worth that, but I also knew that if it hit $20k it would hit $50k and $100k, but I alway thought it would take longer because I assumed it would come from adoption of the technology. But it is all speculation now, you only have to love at dogecoin to see that. It is a virtually limitless coin, if it hits $10 it is through sheer madness. The same things said about bitcoin are being said about dogecoin. "It will be the payment medium of the internet, you can buy a coffee with it etc. But every post in the subreddit is about Lambos and moons.

It's a real shame.

NFTs are the same thing though, yes the medium differs, but these high benchmark prices are being paid by people with hundreds of millions in cryptocurrency, with the aim pretty much of minting their own NFTs and selling them. Those big ticket items are just painting the tape. Likely bought and sold by the same people in many cases (if we take the crypto markets in general as a guide).

Exactly, they are pure price speculation and manipulation, this recent NFT being a perfect example:

https://news.ycombinator.com/item?id=27038275

That would happen if you call something a currency. Maybe we should have called it something else, and derived its value from its application. But hindsight, etc. The plan was btc would be insanely liquid and decentralized it would collapse the banking system. So we went 200% with cryptocurrency. Now we’re trying to force the planet to ignore the potential sunk cost of having invested their life savings into it, to instead look at more useful tokens.

> Investors only care about getting more press releases out so they can pump up the price of their discounted tokens, which have a shortened lockup period relative to something like stocks. It’s almost like a pump-and-dump scheme for investors.

"almost"

If even useful services are being abused for speculation, it's time to realise the entire space is fundamentally broken. We've already seen massive fraud in the space, it's only a matter of time before people who fundamentally don't understand what they are "investing in" are left holding bags. It will necessarily collapse because of how it's being used. (imo)

How is this any different from the "web tech" space at large? Where investors will push towards "data-hoarding", privacy-invasion, dark patterns and/or addictiveness or other psychological "abuse", more often than not?

That's why it's the investment space that needs disruption - which is why crypto is met with so much pushback on HN. A year ago, crypto-related stories made front page much less often, if at all.

2017 was very different. Crypto type stories frequented the front page with technical marvels. Then a few things happened... 1) we evaluated 2) this scamconomy arose 3) the bubble burst.

I was excited then, when it was new to me, but then I learnt the truth about blockchain

Because people here try to understand the technology and its usage before riding the hype train. Most people investing in Ether for example have no idea what it even means. But when you ask them they would spit answers like "it's going to revolutionize finance..". When you ask them how, they have no answer. When you ask them for specific applications that they know of outside of the stupid NFT, they send you to Google. Yesterday someone on Youtube gave an example about a fridge that will order you eggs and milk when they run out, and everything will be done on the blockchain.

Not a crypto hater. I even invest for fun and because you cannot deny the opportunity to make money rn. But don't expect people to ride the train blindly. I do think that crypto isn't going anywhere. But the current valuation of these coins is just absurd rn.

There are plenty of useful applications on Ethereum. Maker, Compound, Aave, dYdX, Synthetix, UMA, Uniswap to name very few.

Thanks. I will take a look.

IMO these things are basically driven by speculation as well. From what I can tell, they mainly provide liquidity for financial institutions. Financial institutions are interested in crypto so that they can make money trading it. IMO there is very little actual utility here.

Very actual real utility here?

What's utility to you? Is buying a in-game COD skin utility? Or how about roblox bucks? How about the trillion dollar derivatives market?

All those things easily disrupted by DeFi.

I think it's a fair question, but these are not great examples, IMO.

COD skins and Roblox bucks can only be produced and sold by one company, so I don't see why you would need a decentralized protocol for them. CS:GO doesn't use DeFi, and apparently the market was active enough to be used almost entirely for money laundering.

For other financial markets, I can definitely see more of a case to be made, but it remains to be seen whether that will actually take off. From what I've seen, the crypto markets right now are primarily dealing in crypto, as I said.

The difference with COD skins being in-game vs on a blockchain is not only can you associate a universal identity to them (your wallet address), but anyone can see and trade for them anywhere. Maybe not the best example, but if you generalize to artwork/digital content it really makes sense.

why would COD allow that to happen

Why would you need to trade your COD skin through a decentralized distributed network if that skin is only usable through a specific centralized game?

The use cases for CRYPTO and NFT are extremely small.

Its a solution that's been looking for a problem for over 10 years.

Agreed. I think the real use for NFT is tradable identities/roles, which grant access to digital or physical experiences that span organizations. Remains to be seen whether someone builds a killer app/experience around that. So far, people are only interested in mundane simulation of physical scarcity.

Did you accidentally a word?

>Is buying a in-game COD skin utility? Or how about roblox bucks? How about the trillion dollar derivatives market?

No.

I suspect financial institutions are interested in crypto because they don't want a new financial system with a more democratic organizational model to make them obsolete.

Maybe there are some forward thinking people there who want crypto to be the driving factor behind refactoring from COBOL, who knows.

It’s not that different? That’s why the dot com bust happened

It could not be more different, to pick one example from web tech with a similar name:

Cryptocurrencies: Efforts to make useful tools are driven out, speculation and fraud are rife.

Cryptography: Used to secure billions of web transactions every day on the web with very little fraud.

Cryptography is not web tech.

This website is being served to you using cryptography right now (tls).

I took web tech to mean the technology used to serve the web - the differences with cryptocurrencies are manifold, the principal one being that billions of people use the web every day to perform important functions, compared to cryptocurrencies where most users are simply speculating on prices.

I think GP's point is this:

1) You cannot have cryptocurrency without the web, so it is web tech.

2) Computational cryptography long predates the web. It would be more accurate to say "the web is cryptography tech", if anything.

1) A depending on B does not mean A is part of B (though I'd dispute cryptocurrencies requires the web to function at all, perhaps you're thinking of the internet?).

2) Cryptographic libraries (many relatively recent, e.g. go or rust libraries) are definitely an important part of the web, they're integral to web tech if you define web tech as the tech that powers the web.

Because these crypto companies are generally deliberately marketing themselves as the democratic solution to the original problem through this new decentralized technology. Then when their private discord and telegram groups get exposed for pump and dump scams, their go to defense rings of your comment “so what, it’s the way it’s always been”

I think the real issue is that in 2009-2013 it was used by people who understood the risks. Now it is used by retail investors with no clue, who will be hit hardest by it.

I suggested everyone buy it when it was under $500, I said invest with caution up to $1000. Now I can't in good faith suggest to people that they buy it. And I am fortunate, everyone who did buy it on my suggestion made plenty of money.. probably because they had me in their ear saying "don't sell it" when they hit their first bitcoin drop. I get messages often thanking me for introducing them to cryptocurrency. However I and sure that there are many who didn't buy it and now regret it. Same as there are others who bought it, sold at a loss and regret it. It has been repeated as Infinitum, only invest what you can afford to lose and that is most definitely still the case. Bitcoin can still go to zero (or close enough not to matter) but It could also go to $100,000, and right now latter is more likely, but I feel as the price goes up so does the chance it goes to zero.

The thing is your entire post is about investment and making money or losing money...what does that have to do with p2p electronic currency and the democratization of money?

Buy/hodl has converted the concept for electronic currency, if there really ever was one, into a money making endeavor based on your current wealth and ability to risk a loss. That’s the antithesis of democratization, or 1 person 1 vote, but a I was here first so that makes me king now get on your knees and grovel at my supremacy.

The only real way to look at Bitcoin is as if there is an AI operating in the background with the sole intent of taking “investors” money through constant cycles of FOMO pump and dumps. It’s a stock without any assets or profits backing its value, at any point the shareholders could just start a new company and nothing would be lost by abandoning Bitcoin, because it’s just a shell company with nothing inside.

Is price speculation considered abuse?

The tokens issued in this case (on of the few) have a purpose which is not speculation. If large amounts of speculation is undermining the business itself then yes I think that might qualify as a form of abuse? Happy to use an alternative term of your choice, ESL etc.

I'm not sure if the price speculation actually undermines the underlying businesses. For example, I participate in a blockchain wiki project. On the telegram there is a lot of people talking about the price but I don't feel like it diminishes the usefulness of the project. I asked questions about editing, the admins helped me out and I was able to use the platform.

Perhaps their initial approach was not the right one i.e. was the public token the right method to maximize the value of their actual offering? Maybe they need to rethink given what you have said.

I know of a very similar company (might even be the same one) the telegram forum they have setup is just full of people speculating what will / might happen ...will it go to the moon... etc.. They have now moderated that out but still main reason people join the group to start with.

Few people are buying the utility tokens to pay for the service. They’re buying them to hoard so they can resell to other speculators

That's not a utility token. If you want to create a true utility token, make it stable and you won't have to worry about speculation.

This is impossible. If it can be traded it can be speculated. The value of any tradable asset is determined by how much someone is willing to trade for it and by nothing else. There is no way to make it stable other than to make it impossible to trade.

What if asset issuers ("crypto manufacturers") imposed contractual price ceilings/floors?

Probably more realistic with exchanges ("authorized resellers") than individual traders.

https://www.ftc.gov/tips-advice/competition-guidance/guide-a...

i agree, but there are stable coins...

This seems like it should be labeled as some kind of social law: Any blockchain will always converge towards a speculation vehicle.

In much the same way, social networks almost always seem to become hookup platforms.

Sounds like Chainlink

or filecoin

Like the OP Twitter thread said: It's universal across every crypto project that issues their own tokens.

There's no reason to force customers to buy a brand new token invented out of thin air just to pay for a service that could be otherwise purchased with real money or Ethereum.

What are you talking about? Chainlink is used a ton, literally powers most of defi. Its used to secure 10s of billions of $.

SkyNet/SiaSky?

Why don't you be transparent and tell us the service?

In many cases it is very useful. In this case does it really matter who? It could apply to almost all cryto projects.

Yes it does because he's saying "I swear guys this was definitely a good idea no need to confirm what I say" and then continues to bash crypto because it wasn't getting any traction. So his argument is just based on his opinion that it was a great idea, meanwhile most ideas are garbage.