...a list of new business models zero of which have shown an iota (pardon the pun) of traction in a decade. I feel the list of crazy startup ideas circulating on r/wallstreetbets is as valuable.
The technical and scaling problems are all self imposed due to leveraging a woefully inadequate storage mechanism. It’s basically coal-powered banking.
I'm on neither side of this debate, but citing how much Bitcoin is worth seems like a really weak argument in favor of traction.
I think a more convincing argument would be citing # of transactions or use cases (store of value, cheaper way of sending large amount of money or money internationally, etc.)
How many of them were fake? 95%. [1] While I understand that applies to exchanges and not mainnet, the reality is that each mainet transaction is impacted because it's the 95% of fake volume that sets the price and therefore the terms of exchange for the "real" transactions.
None of them. There is no such thing as a 'fake' bitcoin transaction. What you are thinking of is fake trading volume on exchanges. Those are very different things.
It's baffling to me seeing the progression of anti-blockchain people. They keep insisting that it's all a joke, and yet every single day the level of adoption keeps on increasing.
I feel like I'm watching the internet be born again.
Sadly it’s the opposite of a joke. 1 bitcoin transaction is 607kWh (or 288kgCO2 and 85g of ewaste). And the more efficient technology gets the less efficient bitcoin gets. Patently absurd.
95% of volume is fraudulent, and decentralized and trustless means that’s an intentional, irrevocable part of the system. Being able to circumvent international sanctions and pay terrorists is a feature. North Korea has been accumulating a large stockpile. More than 50% of hash power is concentrated in 3 mining pools in the PRC.
The higher the price goes the more you have to pay miners for the same job. Just maintaining the price requires $14.4M in new money each day to pay the miners. If BTC goes to $80K each you’d need $144M in new money per day to pay the miners.
And it solves no actual problems people have. Sweet joke fam. I feel like I’m watching the liberty reserve all over again.
> And the more efficient technology gets the less efficient bitcoin gets.
Incorrect. The technology getting more efficient does not make Bitcoin less efficient. You probably didn't actually think through this point, because it's nonsensical.
> 95% of volume is fraudulent, and decentralized and trustless means that’s an intentional, irrevocable part of the system.
95% of volume on exchanges that nobody pays any attention to anyway. Binance, Coinbase, Kraken, Bittrex, etc all have completely legitimate volume numbers.
> The higher the price goes the more you have to pay miners for the same job.
This is only true as long as new bitcoins are still being minted. And it's also only true if the rate of increase in the price outstrips the decrease in the minting rate.
> And it solves no actual problems people have. Sweet joke fam. I feel like I’m watching the liberty reserve all over again.
Ok. Don't buy any then. Meanwhile, people living under repressive and fiscally irresponsible governments will continue to use it to protect their wealth, as they have been doing.
That reply ended up in the wrong place and now I can’t amend it my bad.
> Incorrect. The technology getting more efficient does not make Bitcoin less efficient. You probably didn't actually think through this point, because it's nonsensical.
It very much does. The more efficient your miners the more you have a temporary advantage over your peers, so there’s incentive to replace your equipment. Then everyone upgrades theirs too. Once you do the difficulty adjusts to match the new hash power. Thus bitcoin becomes less efficient. There’s a straight line up and to the right over time in terms of hash rate, and power consumption but the max tx rate remains a pitiable 7tx/sec. Therefore by definition it’s become less efficient.
I mean 10 years ago it took a couple of Wh to run a tx and now it takes 607kWh! That’s the nonsensical part. You can’t tell me that efficiency hasn’t gone down haha.
> 95% of volume on exchanges that nobody pays any attention to anyway. Binance, Coinbase, Kraken, Bittrex, etc all have completely legitimate volume numbers.
People very much pay attention to bitfinex, since they own the funbux people use to avoid AML/KYC. Even if we take the crazy claim that somehow people only pay attention to the “good 5%” of tx the fake volume sets the exchange rate dude. I can’t believe you’d sit there and say it’s okay if 95% of volume is fake and manipulative because you’ve found the good 5%. If only 5% of all USD transactions were fake, or all stock transactions were fake we’d burn the system to the ground.
> Thus is only true as long as new bitcoins are still being minted. And it's also only true if the rate of increase in the price outstrips the decrease in the minting rate.
So until 2050. And then you think miners will continue to secure the system for their health? Of course not. Transaction fees will skyrocket and if anyone is left using the system the process will repeat itself.
> Ok. Don't buy any then. Meanwhile, people living under repressive and fiscally irresponsible governments will continue to use it to protect their wealth, as they have been doing.
“Protecting their wealth” haha, good one. They lost 33% last week. 70% since all time high. 99.8% if they invested in alt coins. That’s not protection, that’s insanity. There’s so many better ways to protect wealth. It protects wealth like warm milk on a windowsill.
Trust me I’m not buying haha, I made a bunch of money in the initial bubble run, sold at 17K and got out. Today, there’s plenty of better investments in the stock market. I mean outperforming an asset class down 70% in 2 years is pretty pretty easy. Even SoftBank has a better track record. Actually it may be outperformed by the Turkish Lira at this point. (Edit) since 2017 the Turkish lira has done much better than bitcoin.
> It very much does. The more efficient your miners the more you have a temporary advantage over your peers, so there’s incentive to replace your equipment. Then everyone upgrades theirs too. Once you do the difficulty adjusts to match the new hash power. Thus bitcoin becomes less efficient. There’s a straight line up and to the right over time in terms of hash rate, and power consumption but the max tx rate remains a pitiable 7tx/sec. Therefore by definition it’s become less efficient.
So, yes, it becomes less efficient in terms of hash rate, that's true. But we don't really care about hash rate efficiency. What we do care about is power efficiency, but that scales with price not mining technology. And yes, the price has gone up, but power consumption will only continue to rise if the price does. This is basically an economic fact - miners are compensated in Bitcoin, so they should only be willing to consume as much dollar-weighted power as they receive in dollar-weighted bitcoin.
> People very much pay attention to bitfinex, since they own the funbux people use to avoid AML/KYC.
Bitfinex's volume is legitimate, though. Tether is an open question, but tether is also tradable at a market rate. The market believes tether is worth $1. If you disagree, you can short it, and if you actually believed tether was illegitimate, you'd do that. The fact that you haven't indicates to me that you don't really believe it.
> I can’t believe you’d sit there and say it’s okay if 95% of volume is fake and manipulative because you’ve found the good 5%. If only 5% of all USD transactions were fake, or all stock transactions were fake we’d burn the system to the ground.
I think the crux of the issue is that nobody cares about these exchanges. Their volume isn't real and everyone knows it, so they don't matter. If I claim to own a stock exchange that trades 100 trillion usd of volume every day, does that mean that now 95% of traded stocks are "fake"? No. It just means some random guy on the internet claimed something silly. That's what these fake exchanges more or less are.
> So until 2050. And then you think miners will continue to secure the system for their health? Of course not. Transaction fees will skyrocket and if anyone is left using the system the process will repeat itself.
> “Protecting their wealth” haha, good one. They lost 33% last week. 70% since all time high. 99.8% if they invested in alt coins. That’s not protection, that’s insanity. There’s so many better ways to protect wealth. It protects wealth like warm milk on a windowsill.
Better than Venezuelan Bolivars by a long shot.
> Trust me I’m not buying haha, I made a bunch of money in the initial bubble run, sold at 17K and got out. Today, there’s plenty of better investments in the stock market. I mean outperforming an asset class down 70% in 2 years is pretty pretty easy. Even SoftBank has a better track record. Actually it may be outperformed by the Turkish Lira at this point. (Edit) since 2017 the Turkish lira has done much better than bitcoin.
Measuring something's performance from it's all time high is a strange way to consider things. Nobody does that in any other market. There are plenty of assets down that much from their ATH. You're cherrypicking a particularly bad time period for Bitcoin. If you started in 2016, the returns outstrip any national currency on earth - which for the record, is also not a meaningful way to look at things.
Citation needed. Bitfinex is one of the shadiest entities anywhere on earth. Why would you believe them?
> Tether is an open question, but tether is also tradable at a market rate. The market believes tether is worth $1. If you disagree, you can short it, and if you actually believed tether was illegitimate, you'd do that.
I would do that if the market wasn’t manipulated. It’s a suckers game to take any position in a manipulated market. Exchanges actively move the price up to liquidate shorts then spike it down to liquidate long. To play a rigged game at all is a suckers bet; it’s like trying to play a shell game because you’re confident you can see where they put the ball. That’s not why you’ll lose.
> Better than Venezuelan Bolivars by a long shot.
A single transaction fee for BTC is a weeks wages in Venezuela. It does not solve that problem or any other problem. Trust me if a Venezuelan were given the choice between moving a sliver of currency for a weeks wages or 600kWh of productive energy they’d very much pick the latter like any sane human.
For reference, when people say "95% of exchange volume is fake" this is the report they're citing. It lists 10 exchanges with volume it deems legitimate. Bitfinex is one of those 10.
> I would do that if the market wasn’t manipulated. It’s a suckers game to take any position in a manipulated market. Exchanges actively move the price up to liquidate shorts then spike it down to liquidate long. To play a rigged game at all is a suckers bet; it’s like trying to play a shell game because you’re confident you can see where they put the ball. That’s not why you’ll lose.
I'm not sure what you mean by "manipulated". The Tether/USD market on Kraken is not manipulated in any way. And it's unclear what it'd even mean if it were. How would one go about manipulating the Tether market?
> A single transaction fee for BTC is a weeks wages in Venezuela. It does not solve that problem or any other problem. Trust me if a Venezuelan were given the choice between moving a sliver of currency for a weeks wages or 600kWh of productive energy they’d very much pick the latter like any sane human.
Yes, now it's a few weeks wages. But prior to this round of hyperinflation they could have stored their wealth in bitcoin. Now it's probably too late. But i'm not referring to someone doing it now, storing your wealth somewhere will always have some cost associated with it. Wealth preservation is a step you take in anticipation of currency risk, not after its already done.
> Yes, now it's a few weeks wages. But prior to this round of hyperinflation they could have stored their wealth in bitcoin. Now it's probably too late. But i'm not referring to someone doing it now, storing your wealth somewhere will always have some cost associated with it. Wealth preservation is a step you take in anticipation of currency risk, not after its already done.
Perfect haha thus solving the problem once and for all. Except not solving any problem, and somehow even less efficiently.
Before the last few rounds of hyperinflation they could have just as well bought USD and been 70% better off. Yes if you cherry pick entry points in retrospect you can justify any position no matter how crazy. If these poor Venezuelans had only realized how valuable bitcoin was before it mattered you know? Or literally any other asset class that’s done well lately but hey don’t let me spoil the surprise.
> Before the last few rounds of hyperinflation they could have just as well bought USD and been 70% better off. Yes if you cherry pick entry points in retrospect you can justify any position no matter how crazy. If these poor Venezuelans had only realized how valuable bitcoin was before it mattered you know? Or literally any other asset class that’s done well lately but hey don’t let me spoil the surprise.
The only reason I cherrypicked a time period was to demonstrate that you were cherrypicking a time period. If you want to talk seriously about evaluating it as an investment, there are two ways you could go about doing that. One would be to look at it's value since inception, which makes it literally one of the best investments on the planet. The other would be to pick a hold length and evaluate the sharpe ratio for holding the asset over all periods of that length during its lifecycle (e.g. take all 1-year long daily returns streams, and compute the sharpe ratio of each, thereby obtaining a performance distribution for the asset that suggests what your expected risk-adjusted return would be, on average, for buying it at any point during its lifecycle).
I do have the data to do that analysis, but not on the computer i'm currently on. However, I think we both know how good it will look for Bitcoin. If you doubt that, i'm happy to actually run it in a day or two.
This argument has been a bit winding but to recap. I started out saying BTC was getting less efficient over time, you said it wasn't, then agreed it was. You suggested it wasn't manipulated, but we agree there's tons of data that shows its brutally manipulated. Then I argued Bitfinex/Tether is shady, you said it wasn't and that I should short USDT. I said the manipulation makes that a bad call. Next we talked about investing, and you said it was doing great, but over the last 2 years it's down 70%. Then you said it was good for Venezuela, but a single transaction costs a few weeks wages, and takes enough power to run their home for a month. Then you agreed it wasn't good for them, either. So far we agree it's performance is better than the bolivar but worse than the turkish lira. Yes, if you bought for pennies and can sell for thousands you did fine. The question isn't how much money it could have made you, the question is where's it going next. It's also probably not the single best investment in history, if you ask anyone who invested in Facebook's seed round.
It's not good for anyone, anything, or the environment. It's a crap payment system, with limited capacity, consuming an entire country's worth of energy to do what could be achieved with a single AWS instances and a DynamoDB table. And the big feature? That you can circumvent sanctions. Boy if I had a nickel for every time I wanted to pay someone in North Korea, Iran or Syria using a month's household usage of electricity, I'd, well, I'd not have any nickels.
Nobody can point to a single thing Bitcoin does better than anything else already out there except making the early adopters wealthy.
Not to mention "[a study] estimate[s] that Bitcoin generates a large welfare loss that is about 500 times as large as a monetary economy with 2% inflation." [1]
> This argument has been a bit winding but to recap. I started out saying BTC was getting less efficient over time, you said it wasn't, then agreed it was.
You originally said that it gets less efficient as the technology improves. That statement is false. It does however, get less efficient as the price rises. So you should only be concerned if you expect the price to continue to rise.
> You suggested it wasn't manipulated, but we agree there's tons of data that shows its brutally manipulated.
Also false. There are a bunch of exchanges that fake volume. Those exchanges do not manipulate anything, however. All they're trying to do is scam ICOs out of listing fees. They don't even have real users.
> Next we talked about investing, and you said it was doing great, but over the last 2 years it's down 70%.
I articulated the correct criteria for evaluating it as an investment. You may feel free to propose your own, of course. But I presume you haven't already done so because you do not have a better way to run the analysis.
> So far we agree it's performance is better than the bolivar but worse than the turkish lira. Yes, if you bought for pennies and can sell for thousands you did fine.
Over the time period you cherrypicked, yes. If you choose a starting point at random from its history, however, i'd bet it has performed better than any other currency on earth, on average.
> It's also probably not the single best investment in history, if you ask anyone who invested in Facebook's seed round.
Buying Bitcoin on day one was almost certainly a better investment than investing in FB at any stage. I don't know what the terms of FB's seed round was, but let's say you paid $50k for 1% (valuing it at $5mm) of FB. Today that investment is worth an astounding $5 billion, an excellent 100,000x return. However, in March 2010 you could buy Bitcoin at $0.003 each. That's a 2,666,666x return to date.
And that's March 2010, which was the earliest time I could easily find a price for in a Google search. In 2009, when it was actually started, who knows what you could have gotten it for.
You’re not understanding. The miners have to take that much money out of circulation (exchange BTC block rewards to dollars) to pay for their electric bills, which means that much new money has to come in to make up for it for the price to remain stable. It’s negative sum. And as the price rises so does the negative coefficient.
> They keep insisting that it's all a joke, and yet every single day the level of adoption keeps on increasing.
Do you have a citation for that claim? The people hoping to get rich quick in the space are active but there's almost no usage by the general populace.
> I feel like I'm watching the internet be born again.
The early internet had huge barriers to adoption (computers were expensive, network connections were expensive and glacially slow), but each phase of expansion had immediate popular uses. As an example, the web was ~1990, NCSA Mosaic came out in 1993 (Netscape was 1994) and by 1995 it was a household term with rapidly growing personal, business, and government usage for a wide range of tasks. In the earlier era, things were more limited due to connectivity issues but there were still substantial numbers of people using email, usenet, FTP, etc.
In contrast, Bitcoin has been out for 11 years, didn't have any of the barriers to adoption like the early internet, but if it disappeared tomorrow almost nobody outside of the industry would have any interruption in their lives.
No, I’m saying that the fake trading volume sets the price which then determines the number of bitcoin sent in the real transactions. Since nothing is priced in BTC the exchange rate defines the quantities transacted.
That seems like a pretty silly argument. The transactions are not in any sense fake. The fake trading volume is also not in any sense setting the price. Roughly 5-10 billion usd volume per day is completely legitimate, and it is that volume that actually determines the price. The fake volume on low quality exchanges is just noise that follows the price, it isn't a component of price discovery.
I'm constsntly amused by the lack of technical understanding on HN when it comes to cryptocurrencies. That article says 95% of trading volume is fake. This is absolutely different from on chain transactions, 100% of which are real.
No I get it but the sum total of transactions, real and fake determine the exchange rate between real money and crypto. If the fake volume had no impact at all, why on earth do you think they’re doing it? For their health? Fun? Cmon now.
Market cap is not worth for a currency. There’s incredibly limited liquidity in the market relative to the market cap, and even the ETF trying to list recently showed 95% of all volume in the crypto space was fake.
Try and pull a few million dollars worth out and watch what happens. It did just plunge 33% on some small withdrawals, what exactly are you waiting for?
Selling a few million dollars worth of bitcoin would only slip the market a couple of dollars if at all. Go look at bitmex or bitfinex's order books - they have plenty of liquidity.
95% of that volume is fake [1] especially on bitfinex haha, they’re the scammiest. When they launched they were just importing order books from other exchanges to make it look like they had volume, and they launched Tether when they lost banking which also lost banking and had hundreds of millions seized for money laundering. Bitfinex is the biggest scam in the space and that’s saying a lot.
No one ever said the space is not interesting. It's just goes against human nature and how the world operates.
The difference between a failed idea and a successful one is very often simply timing. Things that were complete nonsense in the dot com bubble are billion dollar businesses now. The crypto space is not for this time (imo).
> It's just goes against human nature and how the world operates.
Is that actually true? Or just true for a certain subset of humans?
Human nature isn't actually fixed and immutable. Each generation redefines the world with culture, practices, and institutions that seem totally natural given the environment they grew up in. I remember my mom insisting that I wear a suit to every interviewer and send thank-you notes to every interviewer; I learned later that the former gets you dinged for culture fit at most Silicon Valley companies, and the latter seems creepy. Conversely, several practices that were decried as "entitled Millenials!" when I first entered the workforce, like expecting to change jobs every couple years or expecting your employer to provide lunch, are now fairly standard practice, and the economy has shifted to embrace that new business culture.
When I talk to people who graduated college after 2013, the vast majority of them believe that crypto & DeFi are right, natural, and will inevitably take over the global financial system.
Right now, that's 5 years of working people, in junior positions, vs. 40 years of people in senior positions who think that crypto is an affront to the natural order of things. This site is largely Gen-Xers and Xennials who are deeply embedded in the previous wave (the WWW) of remaking how the economy works; I doubt most of us have close personal friendships with people who graduated college in the last 5 years (I only hear about this through friends' younger siblings, recent alumni of my alma mater, and junior employees hired by my startup-founder friends - that and explicitly seeking it out on Reddit).
But if you look at this situation demographically, change is inevitable for the simple reason that we're going to stop working and die before they are. And even something that appeals only to 18-28 year olds still has the ability to support several billion dollar markets, given that this is the age group whose consumer preferences are still malleable with 50+ years of consumption ahead of them.
> Is that actually true? Or just true for a certain subset of humans?
The strengths of cryptocurrencies are also exactly why they are unnatural and undesired for most people in the real world.
Who do you turn to when you get scammed, hacked or robbed when it results in lost crypto funds? No one. Everything is final with no recourse. No mistakes are permitted. People are not robots, software is not foolproof and people who write it are not perfect.
Ruthless peer to peer with no central authority or possibility of appeal is not how the world operates and it is not what people are comfortable with. Anyone who is comfortable with it is a short sighted fool.
> When I talk to people who graduated college after 2013, the vast majority of them believe that crypto & DeFi are right, natural, and will inevitably take over the global financial system.
Young people are dreamers and they have a whole lot of energy to pursue dreams. They take inspiration from other successful dreamers who have made it with a lot of hard work and tenacity. They take inspiration from ideas of the past that have revolutionized the world.
What they don't think about is the 90+% of people who have also worked their ass off in pursuit of their dreams or the world changing ideas that showed promise, but went nowhere. That is because those ideas are soon forgotten and the people never made it out of obscurity.
> Who do you turn to when you get scammed, hacked or robbed when it results in lost crypto funds?
The same thing has been said about self-checkouts ("Who do you turn to when you can't find an item?"), self-serve purchasing models like AdWords or AWS ("Who do you turn to when you need customer support?"), and self-employments platforms like Uber, Lyft, DoorDash, Postmates, etc. ("Who do you turn to when you want time off or career development?")
The actual response to all of these is "Well, I'll figure it out myself." People who use self-checkouts generally know how the aisles are laid out in their favorite supermarkets, or they just walk until they find things. People who use low-volume AdWords, AWS, or SaaS vendors turn to forums & StackOverflow when things go wrong. People who drive for Uber just stop working when they want to. Similarly, people who want to avoid getting scammed, hacked or robbed with cryptocurrency do their research on vendors; they do Google image searches on headshots of ICOs and look up founders on LinkedIn to see if they're fakes; they keep their crypto on a hardware wallet in their physical possession; they use strong passwords and 2FA that they don't re-use for any other sites; and they don't talk about their Bitcoin holdings on the Internet.
All of these developments are controversial, because you actually are losing a human interaction that some people found helpful. That hasn't stopped them from growing quickly, because they take the human (and their associated salary) out of the loop. This lets firms offer a service to groups of people that it wasn't previously able to afford it. If you wanted to buy ads for a global, targeted audience before Google, you just couldn't do it. If you wanted to host software before AWS, you went to a colo or dedicated hosting provider and put in a lot more effort than their self-serve solution. If you wanted a side-hustle before the gig economy, it generally wasn't worth the search costs of trying to get an additional job.
If you have less than $10K in deposits (which is the majority of people these days), the bank is not your friend. They try to get you on little fees for everything, and pay you effectively zero interest, and occasionally go down for maintenance when it's exceptionally inconvenient for you (aside from many of their services only being available from 9:00-4:30). When the alternative is that, then the idea of a global, decentralized system that charges a flat fee per transaction and no fee to hold your wealth gets pretty attractive.
Counterfeiting is a minor issue in our daily lives because so much resources have to be devoted to keeping it that way.
"By 1865, up to one-third or even one-half of American money in circulation was fake." [0]
Governments regularly have to redesign their bills in order to prevent counterfeiting.
Extreme punishments are given for the crime of counterfeiting.
It's not just private actors to worry about. Opposing nations could destabilize an economy.
When counterfeiting is not a concern and a currency system can be created with very little effort, we can make currencies that we have more agency over.
The demand isn't for a cheaper way to combat counterfeiting but for greater agency over how the money supply is formed.
There is a massive, global call for reduced wealth inequality that existing governments have not been able to address. I'm not certain that cryptocurrency can do it either but it does seem like a possibility.
What you're talking about is infrastructure. How does infrastructure get built if people aren't actively building it? Yeah, these things take time, but people have to actually build out these ideas first before others in the future can build on top of them. Amazon sold books online because it's all the internet infrastructure could handle at the time. That's why MakerDAO made DAI because it's a low throughput d-application that doesn't require scaling through upgrades in infrastructure. Give it time. This space isn't a scam, it's just very early, and people are enthusiastic, as they should be.
No I am not. A common story of wildly successful businesses is they stumbled upon a market and the makers themselves never thought it was something that has any chance of being big. Then they are surprised when people are begging them to take their money for their half-baked product.
From all the billions that went into the space. A truly demand driven business has still not appeared. That is a pretty damning result.
Crypto space is being kept alive purely from leftover money invested during the mass hysteria of those 6 months or so and sunk cost fallacy.
I disagree with you. There were plenty of ideas during the 1990s that were technically infeasible until further infrastructure upgrades allowed them to exist. Video streaming immediately comes to mind. It was unfathomable to have a video streaming service like Netflix exist in the 1990s. People would have ridiculed you, just as people ridicule some crypto ideas today. A modern example is video game streaming. Even 5 years ago, it was unfathomable that video game streaming high quality games was possible, and yet we are starting to see these services today.
which is why (in my viewpoint) it matters a great deal, and there's just no way back. Trust is required for monetary exchange, but not only. It also matters where very strong guarantees are needed, which is everywhere, e.g., when setting up contracts or when making statements (expert or regulated) about a product, service, or a status. Trust matters because then the whole value-chain gets more efficient, rapid, and cost-effective.
>It also matters where very strong guarantees are needed, which is everywhere, e.g., when setting up contracts or when making statements (expert or regulated) about a product, service, or a status.
10+ years later and we're still having this discussion. Yes, blockchain technologies manage to achieve a trust-less consensus about "a product, service or a status" but only if all the parameters can be encoded in the blockchain itself. It breaks down as soon as real world objects and interactions are involved because then the nodes need some sort of trustworthy "oracle" to monitor the real world. Many people have been working on that problem but I don't think anybody has a solution that works at scale in practice. And of course then a single bug and everything breaks down catastrophically (see the DAO).
Then there's the problem of scaling that solution to the transaction rate needed for a world-class blockchain. That also remains an open question.
Cryptocurrencies are interesting in the same way fusion reactors are interesting, if they can really work they will change the world but it's unclear if the technology is truly viable (even more so for cryptocurrencies IMO). As such I'm wary of this "crypto startup school" in the same way I'd be wary of a "nuclear fusion startup school".
Unless of course the objective is to effectively make a "pump-and-dump startup school" in which case I predict a huge success.
You're absolutely correct that the single largest barrier to mainstream crypto apps is a trustworthy oracle and that it is an extremely difficult problem to solve.
Chainlink is a decentralized oracle framework that recently went mainnet that solves (almost) every issue regarding trustless external data. API providers can sell their data to be utilized as inputs to smart contracts. Large collections of nodes then aggregate this data to maintain decentralization. There are several mechanisms in place to prevent gaming the network (staking collateral, penalties, reputation). The one issue it does not solve is if few sources for the data actually exist. In that scenario, it does not matter if 2 or 200 nodes are reporting the data, as the API itself may provide bad data to the nodes. However, even in this scenario, it would be trivial to assign blame to the API operator, as all nodes would collectively report bad data.
I would encourage you to check out their solution. I'm shilling, but Chainlink is a product that actually works.
> Unfortunately people are not 100% trustable, devices are not 100% secure and code is not 100% perfect.
- which is actually why you use crypto.
> If someone steals my credit number, I will likely not be on the hook for the money and will not lose anything.
- because the bank guarantees the safety of the payment means you use. The fact that you don't have to pay (as a private customer) doesn't mean that stolen credit card numbers and fraud transactions don't cost money. Someone has to pay somewhere in the chain. If the principal is recovered (the stolen money), then someone still has to pay for the overhead of recovering the money (for you). There're insurance and liability-shift mechanisms in place, but the money transfer would be much safer, faster, and cost-efficient if crypto was in place.
> If I make a mistake during banking, I can turn to people at the bank about it.
- So? It's not because your infrastructure uses crypto that you give up of customer support.
I'm sorry, but this is very naive about security, and cryptography, and blockchains. Allow me to quote some experts:
[0] > "Crypto is fundamentally unsafe. People hear that
crypto is strong and confuse that with safe. Crypto
can indeed be very strong but it’s extremely unsafe" -- Nate Lawson (Root Labs)
[1] > "We don't even really know how to build secure systems out of secure parts, let alone out of parts and processes that we can't trust" - Bruce Schneier
[2] > "If you think cryptography is the answer to
your problem, then you don't know what
your problem is" - Dr. Peter G. Neumann
Thank you for TypeChain, it's great. I remember last year, I got Gitcoin to give you some free money to put up bounties.
One reason I'm not building on ethereum right now, is you have no contact with customers/users, because for 90% of the projects, there aren't any.
In my other software projects, you are talking with customers every week, it is hugely helpful.
What MakerDAO are doing is awesome; DAI is my digital cash.
> Thank you for TypeChain, it's great. I remember last year, I got Gitcoin to give you some free money to put up bounties.
Thanks!!! I really appreciate it. I am actually wrapping up a new version of TypeChain for my Devcon talk (yes, I got a speaking slot! ;) )
> One reason I'm not building on ethereum right now, is you have no contact with customers/users, because for 90% of the projects, there aren't any. In my other software projects, you are talking with customers every week, it is hugely helpful.
Yeah... this space is definately over-hyped sometimes...
Btw. are you still in crypto space? If yes, what other blockchains than ethereum do you work on?
Not in Crypto anymore, now making X-Plane addons. I may well return to Crypto in a couple of years, it should be a more exciting and mature space then.
Here's just a quick recap of different, new business models https://medium.com/abridged-io/web3-business-models-in-the-w...
IMO things like DeFi are finally a good use case for blockchain.
So yeah, I think this a good idea to create a startup school focused on new, different area witch can disrupt the finance sector.
Disclaimer: I work for MakerDAO.