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Comment by dvt | Hacker News Reader

> I think you’ve more or less ceded that blockchain provides value. It just needs wider adoption

This is a vacuous non-sequitur. It's like saying "my new social network provides value, it just needs wider adoption"—uh, yeah, that's how social networks (or markets) work. If no one is using it, by definition, it has no value. Markets are social games (not merely "financial" ones).

And exceedingly few people are using crypto in general, but even fewer are using it as a store of value, or as a way to transfer money, or as any kind of hedge. And even if we look at the people using it, most use it merely as a casino.

I mean think about it: not even 100 million people have a BTC wallet. It took Snapchat 4 years to reach 100 million daily active users. We're now in year 14 of Bitcoin.

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> This is a vacuous non-sequitur

In finance, liquidity _is_ adoption. They’re the same thing.

> In finance, liquidity _is_ adoption. They’re the same thing.

While this is true on the face of it, I think it's a bit more nuanced when looking at crypto where one can literally mint tokens out of nothing. Plenty of tokens have (or had) unrealistic market caps, and there was plenty of wash trading dredging up liquidity. In fact, there was a famous arbitrage bot that specialized in doing this[1] (faking liquidity via thousands of transactions to make certain assets seem more valuable than they were).

So even though you're technically correct, I think there's a big "but" when looking specifically at crypto land. To make matters more confusing, a lot of liquidity pools and trading is done in non-USD denominated terms. For example, you trade in some weird staking pair sABC/sXYZ (where both of these are some random staked token, maybe not even pegged). And there might be some down-the-road sXYZ/XYZ and XYZ/ETH transaction you can do (and ETH/USD even further down the road), but I'm not exactly sure if you can count your sABC/sXYZ trade as "volume." Even though Coingecko and other token portals will certainly list both sABC and sXYZ in USD terms[2] (market cap/volume).

[1] https://cointelegraph.com/news/arbitrage-bot-s-spam-attack-o...

[2] https://www.coingecko.com/en/coins/lido-staked-ether

What bearing does the existence of fake liquidity have on the equivalence between real liquidity and adoption?

This is a vacuous non-sequitur.

> What bearing does the existence of fake liquidity have on the equivalence between real liquidity and adoption?

I was just trying to elucidate the fact that it's hard to differentiate between real and fake liquidity (and therefore, real and fake adoption) in crypto.

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