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I was excited 4 years ago when I first discovered these crypto concepts. As time has gone on and I've learned more about them, they are less interesting and come with a ton of baggage. There are interesting things like formal verification, but I expect that these types of things will be taken without the blockchain.

You shouldn't dismiss HN attitudes as jealousy or asleep, that is derogatory.

Yeah the language is a bit strong. I’m serious about the jealousy though - perhaps it’s just me. But when I see someone making a boatload on Tesla and I’m sitting there thinking it’s ridiculous, where does that really come from? All I know is I probably wouldn’t care either way if I’d owned some…and since my experiences with day trading and algorithmic trading, I’m convinced 90% of finance is emotional. It clouds the mind and corrupts usually rational people.

You are sitting there thinking it's ridiculous on Tesla. Are you thinking it's ridiculous on Google? Or Apple?

Don't give yourself a hard time :) I think the Tesla stock price is ridiculous. It's not a jealousy thing. I don't think Google or Apple share prices are ridiculous, and more people made more money out of those two.

If someone makes money in a ridiculous way, it's ok to think it's ridiculous.

True. The point I was making was one about emotion in finance - when I’m making money it’s easier to ignore rational doubts, and when I’m missing out it’s easier to focus on the negatives because a little voice in the back of my head wants it to fail.

You want it to fail or you want to be right? Nothing wrong with wanting to be right. If Tesla stays at a crazy high valuation for the long term, then several mental models I use and find valuable fall to pieces. That would be very annoying for me on several dimensions because it's likely they wouldn't be replaced with useful mental models. They'd be replaced with "ITS ALL JUST CHAOS".

Markets look to the future. The Tesla valuation makes sense if they are going to do a trillion of business at some future point.

Everyone thinking about the Tesla valuation is aware markets look to the future :)

Even then - your statement is simplistic - the future cashflows are discounted back to today. As an example, if their revenue is $1 trillion (assume no inflation for simplicity) in 50 years, and we assume 10% net income margin (probably in the ballpark of reasonable) they make $100 bill which is discounted 50 years to today at maybe 8% (?), that year's earnings is worth around $2 billion today.

You may reasonably counter that they will grow much faster than that - and this is where people (like me) question it. The total industry is ~$3 trillion or so, globally. 85 million units. Telsa will hit maybe 900k units this year. So its a tough sell that they'll get to 25-30 mill units anytime soon (from a demand or supply side).

Don't get me wrong - Tesla is brilliant, Elon is brilliant. It doesn't mean the company is worth infinity. There is some concrete number which makes sense... and to many folks, 1 trillion is an order of magnitude too high.

Yeah but re mental models you combine that with "...Mr. Market’s quotations will be anything but. For, sad to say, the poor fellow has incurable emotional problems. At times he feels euphoric and can see only the favorable factors affecting the business..."

Sure. But old Ben Graham also said that in the long-run the market is a weighing machine. Note above I said "long term". If Tesla stays long term at current prices or above, I've completely misunderstood several things in a pretty fundamental way. As an example - gold has stayed at prices which don't make much sense to me for a very long time. So my mental model for that market is "it's crazy town, stay away". That's not a very useful model. I hope I don't arrive at the same place on what is a pretty simple company - they sell cars.

The market assumes that Tesla will be much more than selling cars. The scope is more "anything electricity or climate change related" (i.e. very broad) combined with a focus on vertical integration in each business unit.

The biggest attitude problem in crypto is to respond to technical questions and challenges with personal attacks.

Such a turn off both technically and socially. I find it more toxic and tribal than politics at this point.

I read the O'Reilly book. I (superficially) grasp the crypto and the distributed database concepts.

What doesn't make sense is how the rest of the system turns into real transactions.

PREDICTION: in another decade, this shall have arrived or been proven a fad.

>go read the UniswapV2 contract. If you don’t think that’s a cool innovation, please come back and let me know, I’m interested.

I feel like the coolness of Uniswap requires putting the cart before the horse. If I'm not convinced of the real utility of these tokens, why would I be impressed with the ability to move them around in various clever ways? I need to see a valuable external use case before I can see the value in what Uniswap enables.

I guess to me it’s more about progression. From Bitcoin, to Ethereum, to Uniswap, there is a strong development of the early ideas and technology. This doesn’t seem like it will just stop to me. It indicates a very bright future in my opinion. Also, although I get disillusioned, I personally have come to appreciate more that the value being produced is financial. There is clearly massive pent up demand for financial games. On Wall Street there is a huge market for firms that proudly do not pay attention at all to the underlying assets they trade in a “fundamentals” sense, and just play games with mathematical and technological advantage. From what I can tell massive segments of finance are just money games. This is a form of that, which is a real and tremendous market. A natural progression that people who say “high frequency trading provides no value” or “banks shouldn’t be allowed to deal in derivatives” will hate.

You should hear the kind of stuff people are coming up with…what if I could sell a token, and the interest generated from staking it gets repackaged into an options contract on another chain that then gets its value automatically updated every time someone sells and…

It seems nonsensical, until you go learn what all these quants are getting paid millions per year to do for hedge funds and you think to yourself “oh, it’s a similar thing. There is demand for this.”

I mean, if someone showed by some great new innovation to let HFT shops move faster, I'd also be a bit nonplussed. If the answer is just "well, this is no more useless other frivolous* money games", then I'm not really convinced.

*frivolous in the sense of real utility. Obviously they make boatloads of money.

Sure. I guess what I’ve come to accept more is that what people on Wall Street do is real. Games are real. I don’t personally buy into the “new world currency”, “real world use case, I’m gonna own my house on a blockchain” lines of thinking. The use case is still being fleshed out but in my opinion it’s much more likely to produce lots of Citadels than lots of Amazons or Googles if that makes sense. Whereas I think that HN believes it will just go away because it’s all a scam.

> From Bitcoin, to Ethereum, to Uniswap, there is a strong development of the early ideas and technology.

To do what useful thing, that isn't crime?

> From what I can tell massive segments of finance are just money games. This is a form of that, which is a real and tremendous market.

For what, except speculation and crime? What application? It's been twelve years. Crypto is almost as old as the smartphone.

> A natural progression that people who say “high frequency trading provides no value” or “banks shouldn’t be allowed to deal in derivatives” will hate.

Derivatives have obvious economic value. I can go into a room and write an economic model for them and it will agree with everyone else's because there's an objective theory that can be applied to get answers (and I have successfully done this in the past).

Any economic model for the value of cryptocurrency gives it a zero value.

More, crypto people don't have any competing valuation model or theory or explanation or anything. The values for all these coins simply come from nowhere.

> It seems nonsensical, until you go learn what all these quants are getting paid millions per year to do for hedge funds and you think to yourself “oh, it’s a similar thing. There is demand for this.”

You are wrong. I did this for a living for years.

All you are doing is adding the present value of future cash flows together to get the value. The tricky part is dealing with volatility, for which there's an "arbitrage-free" (no magic cash) model called Black-Scholes - and then there are a zillion details.

But cryptocurrencies _have no cash flows._ No cryptocoin produces or destroys fiat currency. The _only_ way you make $1 out of your crypto is if some Greater Fool buys your cryptocoin for more than you paid for it.

Eventually, there won't be a Greater Fool, then everyone will be left with a crappy and expensive payment system with huge transaction costs and nothing else. Everyone will rush for the doors, but there's no liquidation value and no fundamental value and no market makers.

I could replace your use of “cryptocurrency” here with “Pokémon cards” and nothing would change. Yet you don’t seem concerned with the buying, selling, trading, owning of Pokémon cards with regard to their utility. You are not the arbiter of utility. Nobody is. If you have no utility for digital cash, great. That doesn’t mean others don’t. You don’t have to play Pokémon if you don’t want to.

Cryptocurrencies, unlike trading cards, have large negative externalities. They are causing component shortages, driving up GPU prices, enabling new scams and ransomware, wasting electricity, accelerating climate change.

It might be justifiable if cryptocurrencies were providing real economic value, but if we're drawing analogies to Pokemon cards, then they are net-negative value to humanity and we should hope for them to fail as soon as possible.

What are the negative externalities of central banking and dollar hegemony? I'd argue the externalities of dollar dominance are orders of magnitude greater for enabling crime (and legal antisocial behavior), wasting natural resources and accelerating climate change.

GPU prices is totally fair though.

The automated market maker design of Uniswap is useful even for non-blockchain based scripts to e.g. trade stocks digitally.

It's just a simple way of creating an orderbook and liquidity. So you don't need to be convinced of the real utilities of tokens to appreciate the brilliance of the design.

Sure, but it's being presented as a reason to be excited about crypto, so any non-crypto applications aren't really relevant here.

Sounds like you're being deliberately picky to get your point across that crypto is shit.

Being insulting shows you don't actually have an argument.

We know "trading stocks" is a valuable service. We're looking for a valuable service that requires crypto.

How am I being insulting? What's the insult? ENS?

"Sounds like you're being deliberately picky"

That's not an insult.

Hmm, I don't think I am. I'm just saying that Uniswap for non-crypto assets isn't really a demonstration of how cool crypto is.

Did you check out ENS?

While extremely interesting and even innovative, of those innovations are only useful in the hermetic world of their own blockchain, due to the oracle problem. The idea of real-world DeFi is purely hypothetical, at this point.

Yeah to be honest with you, I don’t believe much at all in this talk about “real world” integrations. If you’re interested please check out a couple other comments I made on this thread that touch on that. My opinions are developing as I go.

Read through your other comments, and I don't think that there being a market for money games is sufficient to keep the crypto train going, if it can't find its way into the underpinnings of the real economy. People play money games with things that are indispensable, like the stock market. Failing that, I'm skeptical that people will find crypto interesting after it finds its top. It may just find itself as a perpetually fringe and somewhat seedy sector, like MLM -- a place where fortunes are made off the backs of folks who are betting their meager savings on a chance at better prospects.

I get that and think it’s possible for sure.

> automated market makers

Are you claiming that this is an innovation associated with crypto? Can you elaborate or clarify, as the case may be?

The decentralized exchanges are essentially just automated market makers, but in a different sense than existing automated market makers like Citadel. The contract deals more with balancing pools than a traditional market maker who just forwards orders to an exchange or matches it themselves.

Apologies for the delayed response. What you're describing is not novel to crypto. Citadel is a wholesaler, but plenty of other participants quote firm bid/offer prices on real exchanges (where the wholesaler sends their exhaust). In the US equity space there is RegNMS that seeks to model the marketplace as a single entity, so it's a bad example; but there are plenty of other examples of non-fungible products that trade more similarly to the crypto markets. For example, there are gold markets across the world with slightly different quality standards, units of measurement, delivery standards (or cash settlement rules), expiration dates, etc.

> I think it’s mostly jealousy and a feeling that they missed the boat, so they want to see it sink.

If crypto and defi live up to their promise, no one is going to "miss the boat". People at large will start getting paid in cryptocurrencies and they will start using them in transactions. If there are only a limited number of boats for this thing, that means it's a bubble and it's going to pop.

Personally, I struggle to see any real uses for cryptocurrency that are not at odds with it being deflationary. So, paradoxically, for as long as it keeps going up, I don't trust it will hold its value. Once the curve flattens and adoption picks up, then sure, I'll consider it, but at that point it doesn't matter if you get in early or not.

I commented this further down and am interested in your thoughts. One thing I’ve come to appreciate more when we talk about the “real value” being produced is that these are essentially just money games. Lots of established Wall Street firms play money games for a (very, very good) living.

I’ve come to accept more that what people on Wall Street do is real. Games are real. I don’t personally buy into the “new world currency”, “real world use case, I’m gonna own my house on a blockchain” lines of thinking. The use case is still being fleshed out but in my opinion it’s much more likely to produce lots of Citadels than lots of Amazons or Googles if that makes sense. Whereas I think that HN believes it will just go away because it’s all a scam.

For better or worse, there is huge pent up demand for money games. The average person doesn’t know it yet, but they want to own a swap on an option to buy a percent of the interest of a bond deal that they can then stake for percent ownership in an nft. It sounds insane to you and me right now. But I think they’re going to evolve to the use case of crypto, not the other way around.

I guess I can understand the idea of blockchains as a better way to play financial games. That's a valid use for which there is demand. Another use I can understand is hedging against political instability. Neither personally appeal to me, but I get it.

Still, it seems to me that an awful lot of people are playing this game with scant knowledge of the rules or of what's involved, which is a bit like investing in Tesla without understanding what a car is. I also feel that a lot of the "value" that has been built up is predicated on the idea that Bitcoin (and/or other coins) will indeed become the new world currency. I have seen a few people saying this very thing (or close to it) in this post's comments.

That's not to say they are wrong. However, if the outcome of defi is limited to playing financial games, there is a point where people will lose confidence in this "new world currency" forecast and the price of BTC will see a severe correction.

And that's one thing that I find bothersome in this whole craze: the fact that many ideas in the crypto space have legitimate value does not imply that it is profitable to invest in any existing technology. The future CAN be defi at the same time that Bitcoin might crash to zero, if it happens to be the wrong horse. Worse yet, existing entrenched interests in cryto have a vested interest in making sure that the only technologies that succeed are those they have a stake in, so if Bitcoin succeeds, that may very well be at the expense of vastly superior technology. I think there is a very real risk that the success of Bitcoin will either prevent or significantly delay the emergence of good, efficient blockchain technology.

One of the most realistic takes in this thread, thanks for sharing. I strongly agree. I am severely disillusioned about the early promises of crypto that I espoused. I have settled more on your view, but I think we will cull out the garbage pets.com equivalents and in 10 more years we will see serious companies that are publicly listed developing large scale financial games. Whether they have any connection at all to existing tech (99% of which I think are not just bad but actively toxic scams) is tenuous at best.

There’s astroturfing on HN, like every other open social media platform. The tilted dissonance around crypto, whether it’s the counterintuitive market behavior or climate change advocacy, is one of lacking curiosity, a hallmark of innovative cultures.

Funny how crypto people thinking insulting everyone else will change our minds!

"It has to be your lack of curiosity" (because there's no otherwise explaining your bad judgement).

How exactly is it bad judgement? I’d argue that working at google or investing and making money at google signifies equally bad judgement then, seeing as how it is a company that is eroding freedoms, regularly caught breaking laws, and rife with unethical business practices all in the name of innovation and technology. And yet nobody is decrying the evils of selling their stock in google to make some $.

It's like talking to an old person about computer games. They literally see 0 value and don't get why we are all excited about it. Most feel it's a net negative on society.

And yes, that's also a market that dwarfs all of its neighbors.

"You're old and foolish" is also not an argument in favor of cryptocurrencies.

You don't get it do you? There is no point in giving arguments to people who don't understand.

All this HN discussions have proven that already, no? Do you really think at this point you or me are going to change someones opinion with arguments?

That is not a logical argument.

No crypto booster has an answer to: It is not useful

Or It is a huge waste of energy

Or All the technology involved has better counterparts

I do not think I will change your mind, but others are reading this

All your questions have been answered plenty of times. The fact that the same stuff keeps being repeated says enough about the discussion.

Cross-posted: Transferring SPL USDC is easier, faster, less wasteful, and less expensive than transferring dollars in a bank account.

I am not asleep, but I'm definitely tired.

It would be an extraordinary event in human history if jealousy didn't play at least some role here.

But I think more than that it's become an identity thing. A social signal. So it's not really worth arguing about. Share you own thoughts and move on, don't get invested in debating it here. Elsewhere, perhaps, but not here.

I do want to add that while I don't completely agree with all your comments in this thread, I do appreciate seeing someone express an opinion on the topic that isn't a copy/paste of countless others before it.

I have exactly the same observation and personal experience, and commented the same thing a while back on another crypto-hatred thread here on HN.

Below commenters are just switching the tables around, not seeing absolute radical cynicism towards crypto/blockchain on HN.

I suspect that much of HN, either directly or via their backers/employers, also comes out of the angel-investment scene and has emotional ties to the more conventional funding mechanisms that were themselves disruptive to traditional finance. "You can't make someone understand something when their income depends on not understanding it" and all that.

I do not have a dog in this fight.

I do have an extensive economics education, and deep and wide IT experience.

I do not understand how crypto is any use for anything that is not illegal and/or immoral.

My conclusion is that it is largely for illegal transactions and scams.

What’s your opinion of uniswap, flash loans, and daos? These are the strongest use cases I know of. Would you mind taking a look at some of my other comments in this thread related to money games in traditional finance and let me know your take?

What is your response to the idea that it can automate the role of a trusted third party in commerce, thereby removing much of the opportunity for abuse of this role?

Trust really matters in commerce. Doing away with trust is bad. If we do not trust each other there is no technology on Dog's Green Earth that can save us.

Can you be trusted? Ask yourself.

>Can you be trusted? Ask yourself.

Talk about a con man's answer. I get multiple calls a week by people claiming to be my credit card provider, the tax arm of my country's civil service, or the president of the company I work for. Of course some people can't be trusted. Relying on universal trust is a recipe for universal corruption, and your answer to someone pointing that out is to try and turn the problem with trust on them specifically?

At least come up with some better lies, this is just insulting everyone's intelligence.

So you think we can do without trust?

Can it be replaced by technology?

The pertinent question is still: Can you be trusted? Your answer to those first two questions answers the third

Trust in my family? of course I need that.

Trust in my civil service? Depends on incentives. I'm lucky to live in a country where they're mostly aligned with the needs of the public, but even so there's a 'drift' in incentives that requires constant correction.

Trust in central banks and elected politicians? Absolutely not, what an absurd proposition. How have groups like that ever earned my trust? Why should I give it unearned? And if the answer is 'If you don't trust them they won't trust you', I already know these groups don't trust me. Nothing I do will change that.

Universal trust might be possible in a zero-privacy, one-social-credit-score-from-cradle-to-grave kind of society where I can know strangers with the same kind of detail I know family members. If that's what you're arguing for good on ya for standing apart from the herd. Personally I'm not for that future because I believe zero-privacy leads to a cultural conservatism that would prevent a lot of the interesting innovations we'd get in a some-privacy society.

But universal trust with privacy? Just trusting strangers because we 'have to'? That reliably becomes a kleptocracy. Why should anyone who advocates for a kleptocracy be trusted?

I mean trust strangers

Without being able to rust the people around you life is untenable. Levels of trust in a society are highly correlated with all sorts of measures of well being (which way causality runs I do not know)

Getting back on topic to crypto currencies: Money builds on this. Money is a web of trust. That is the point, and that is why backed currencies (gold, silver, whatever) are pointless. The point is trust. So it is running against the grain to try to replace trust with technology. With money we are trusting each other and the system. If you are in Zimbabwe, say, or Venezuela, perhaps, where the system is devoid of trust money has little value.