The anti-crypto thread

[BFG10K]

Great news, crypto's collapsing across the board: https://www.techpowerup.com/282380/...ions-in-less-than-24-hours-did-the-bubble-pop

Also China's banned crypto, though individuals can still have it: https://finance.yahoo.com/news/chinese-financial-payment-bodies-barred-122712260.html

The sooner this cancerous parasite is wiped out, the better.

 

[VirtualLarry]

ETH PoS has been happening long enough now that it ought to make you question why the transition occurring in the next X months is somehow more likely than the last time someone said it would happen in that same time frame.

True.

The other problem is that there are far too many GPUs tied up in mining to be absorbed by gamers.

You think so? If that's really true, then gamers can't really blame miners for soaking up "all the GPUs", if gamers wouldn't even absorb nearly that many.

However as the GPU prices crater eventually someone will run the numbers and realize they can just mine something else. It's less profitable than ETH was, but they'll still make more in a month or two than just dumping their card, which they can always still do later.

This is likely true too.

And the beat goes on...

 

[Fritzo]

Well, obviously in the short term it is collapsing *upward*.

Not compainin'!!!

 

[VirtualLarry]

ETH sucks, no better than Fiat.

 

[Kledgie]

Any of you dudes familiar with this guy? Calling bitcoin 10k is pretty bold!

 

[Mopetar]

You think so? If that's really true, then gamers can't really blame miners for soaking up "all the GPUs", if gamers wouldn't even absorb nearly that many.

There's a difference in that the miners bought up those cards over months or even years, but they all try to get out at the same time if a panic sets in and just like the ground can soak up all of a light rain over hours or even days, it doesn't prevent a flood when it comes pouring down at once.

 

[ozzy702]

ETH sucks, no better than Fiat.

I pretty much can't stand him. He was one of the absolute worst personalities in the discussions about EIP-1559. He's an absolute child.

 

[DrMrLordX]

ETH sucks, no better than Fiat.

ETH isn't even currency. It doesn't matter how much it's worth or how many ETH tokens there are. Inflation/deflation has no bearing on its proper function.

 

[VirtualLarry]

Inflation/deflation has no bearing on its proper function.

It seems that the devs beg to differ, hence the whole reason for EIP-1559 and "fee burning".

 

[Mopetar]

ETH isn't even currency. It doesn't matter how much it's worth or how many ETH tokens there are. Inflation/deflation has no bearing on its proper function.

If someone will accept it as payment or in exchange for some good or service it's a currency.

 

[DisarmedDespot]

ETH isn't even currency. It doesn't matter how much it's worth or how many ETH tokens there are. Inflation/deflation has no bearing on its proper function.

When I go to ethereum.org/en/eth it says "WHAT IS ETHER (ETH)? Currency for our digital future. ETH is digital, global money. It's the currency of Ethereum apps."

And then has a box that shows the current price in USD. I think it's hard to argue it isn't a currency now.

Frankly, all cryptos have messed-up identities. They're damn near all trying to be a dozen things at once. Is it a currency? Is it a speculative asset? Is it a store of value? Is it a security? Is it a new (twelve-year-old) tech? Who knows!

 

[Mopetar]

Traditional currencies can be bought and sold in a manner that treats them as a speculative asset. It's just generally not worth doing because ideally they don't move very fast or provide good returns and if they are moving fast it's not in the direction you'd want them to.

Traditional currencies are also a store of value. Sure they're all inflating slowly and thus losing value, but that's true of most physical assets outside of houses. The vehicle you have parked outside probably loses value at about the same rate as most currencies if they're both just left there doing nothing.

Cryptocurrency is merely new, but it's not magic. The same laws apply to it in the end, it's just that people have somehow overlooked this which leads to a lot of strange looking behavior as everyone figures this out.

 

[DrMrLordX]

It seems that the devs beg to differ, hence the whole reason for EIP-1559 and "fee burning".

No they don't.

Ethereum is a global supercomputer. The EF makes up its own mind about how many ETH to keep in circulation based on keeping the blockchain sufficiently "liquid" so that people can still pay fees. Now that PoS is coming, they also need to make sure that everyone who wants to stake, has a chance to stake. The validators then ratify (or don't) the plans of the EF as always.

How or why they're targeting a specific number of ETH in circulation is unknown to me, but it's intended to make the blockchain function and to keep PoS sufficiently liquid to avoid 51% attacks and other problems.

Etheruem has been reducing mining rewards for awhile. The EF's decision to start reducing the total number of tokens in circulation is consistent with that trend. It's likely they circulation number is higher than what they consider to be healthy for the blockchain's function, so they're dialing it back a bit. I can't tell you if they're right or if Ethereum would be better off with twice the number of tokens in circulation.

Regardless, ETH in and of itself need not be worth $3200 or $4000 or higher for the blockchain to be functional. High ETH prices make it easier for the EF to incentivize developers, but at the same time, Ethereum development has slowed to a crawl, so I can't really argue that the high value of ETH is healthy for the blockchain.

When I go to ethereum.org/en/eth it says "WHAT IS ETHER (ETH)? Currency for our digital future. ETH is digital, global money. It's the currency of Ethereum apps."

You said it right there. "It's the currency of Ethereum apps". You need it to run a dApp on the blockchain, period. It's not there to be a method of resolving debts, which is the role of traditional currency. They used to say it was "fuel" but I guess they're using slightly different language now.

If someone will accept it as payment or in exchange for some good or service it's a currency.

Not necessarily. That's like saying Chuck E. Cheese tickets are currency when I can turn them in for a cheap piece of junk at the prize counter or trade them to my friend for $5 because he really wants that cheap piece of junk for himself. ETH specifically is used to "pay" for time on the Ethereum blockchain. If anyone else decides to barter for it, they can, but ETH in-and-of-itself was never meant to be tender.

 

[Mopetar]

Sure I can't pay for my breakfast in Etherium any more than I could prize tickets, but I can't do it with Canadian dollars either. Are those not currency now? I don't use any Etherium apps, but U wouldn't find it surprising if USD or some traditional currencies weren't accepted by those. Doesn't stop the USD, Euro, etc. from being currency though.

There's no currency that will be universally accepted, but that doesn't stop it from being used as a currency by anyone willing to accept it.

Original intent has little to do with it. The U.S. government never intended to the USD to serve as legal tender in other countries and yet there are many that use it that way or have throughout history.

 

[DrMrLordX]

Original intent has little to do with it.

It has everything to do with it.

No matter what other purposes people graft on to ETH tokens, you still need them to run smart contracts on the Ethereum blockchain. Each ETH token has an underlying value determined by the market value of services provided by the Ethereum blockchain. It is a utility token. State-backed fiat currency has a value indexed roughly by the nation's economic output and/or military capabilities. Stateless fiat (such as BTC) has no value peg whatsoever. Utility tokens (like ETH) are pegged on the market value of their blockchain's capabilities.

In the case of state-backed and stateless fiat, inflation/deflation are concerns since they're units of barter. You need to balance supply to make sure currency circulates and that prices don't get too far out-of-control. With utility tokens, the only concern is the function of the blockchain. Tokens can have any value you want and it really doesn't matter so long as validators can continue to validate (in the case of a decentralized chain like Ethereum) and contract operators can continue to buy time on the blockchain.

If you asked me personally whether or not I felt the Ethereum blockchain provides value justifying its current market cap, I would say "no" without hesitation. Superficial demand for ETH has driven prices far outside of the realm of the rational. In order for the Ethereum blockchain in particular to function in the future (especially under PoS), it may be necessary for that price to come down. But it doesn't really have to yet, as it is still functioning. Chain fees could come down as indexed in ETH rather than ETH coming down in USD value.

 

[jpiniero]

Bitcoin just passed 50k. Not near the ATH just yet but it's getting close.

 

[ozzy702]

It has everything to do with it.

No matter what other purposes people graft on to ETH tokens, you still need them to run smart contracts on the Ethereum blockchain. Each ETH token has an underlying value determined by the market value of services provided by the Ethereum blockchain. It is a utility token. State-backed fiat currency has a value indexed roughly by the nation's economic output and/or military capabilities. Stateless fiat (such as BTC) has no value peg whatsoever. Utility tokens (like ETH) are pegged on the market value of their blockchain's capabilities.

In the case of state-backed and stateless fiat, inflation/deflation are concerns since they're units of barter. You need to balance supply to make sure currency circulates and that prices don't get too far out-of-control. With utility tokens, the only concern is the function of the blockchain. Tokens can have any value you want and it really doesn't matter so long as validators can continue to validate (in the case of a decentralized chain like Ethereum) and contract operators can continue to buy time on the blockchain.

If you asked me personally whether or not I felt the Ethereum blockchain provides value justifying its current market cap, I would say "no" without hesitation. Superficial demand for ETH has driven prices far outside of the realm of the rational. In order for the Ethereum blockchain in particular to function in the future (especially under PoS), it may be necessary for that price to come down. But it doesn't really have to yet, as it is still functioning. Chain fees could come down as indexed in ETH rather than ETH coming down in USD value.

Fees will drop as throughput increases, regardless of the price of ETH. L2s are already starting that, and as they standardize, become interoperable, and have CEX to L2 bridges, we'll see fees to drop significantly even before sharding.

 

[ozzy702]

Bitcoin just passed 50k. Not near the ATH just yet but it's getting close.

Yep ATH for BTC, ETH and many other alts inbound.

 

[Mopetar]

It has everything to do with it.

So if I were to make a new crypto that's just a clone of Etherium, it would immediately assume the same value?

The reasons for why it's valued the way it is have very little to do with it's ability to be used for smart contracts on the Etherium blockchain. Most of the people mining or exchanging it probably have no idea how that might be useful or even care that could be done.

The original intent and any value that Etherium has as a result of the utility it provides as a result of that has been completely dwarfed by its use as a currency, investment asset, or all of the other purposes it's filling.

Really all that does is set a floor for the value so that the currency can't be worth less than that other activity it facilitates, well to the extent that activity is valuable at least. If no one cared about it or valued it at all it would be worthless.

All of the major crypto currencies can't be created in set amounts at will. Some are even fixed as a function of the protocol or underlying algorithms they use so a government can't adjust them to some desired level of value. Some would even view that as desirable

But something have alternative uses (utility or not) or not behaving like traditional fiat money doesn't stop it from being a currency.

Edit: screwed up the quote tag and didn't notice.

 

[DeathReborn]

The CryptoZombie just doesn't die, it carries on no mater how many times you cut it off at the knees.

 

[aigomorla]

I pretty much can't stand him. He was one of the absolute worst personalities in the discussions about EIP-1559. He's an absolute child.

I also cringe everytime i see a redpanda video.
I bet you he also has enough videocards to supply a significant portion of his city gamers.

It seems that the devs beg to differ, hence the whole reason for EIP-1559 and "fee burning".

This is most likely because the ETH whales want a way to make there ETH more profitable in PoS.
I honestly hope ETH2 crashes and burns horribly.

 

[Mopetar]

The CryptoZombie just doesn't die, it carries on no mater how many times you cut it off at the knees.

At a certain point shouldn't that make you question some assumptions you've made and whether or not they're any good.

People who keep predicting the total collapse of cryptocurrency aren't really different than doomsday preachers that keep saying the world is going to end in X years even though it hasn't any of the previous times they made that claim.

 

[DisarmedDespot]

At a certain point shouldn't that make you question some assumptions you've made and whether or not they're any good.

People who keep predicting the total collapse of cryptocurrency aren't really different than doomsday preachers that keep saying the world is going to end in X years even though it hasn't any of the previous times they made that claim.

Nah, the zombie comparison is pretty apt. The price goes up and the hype train shambles on, but use cases are still essentially non-existent. Crypto's only real shot at adoption was around 2014 when places people actually shop at like Dell started accepting Bitcoin, only for them to slowly drop it since A) fees got too high to be viable and B) low usage.

I dunno, I think crypto's going to stick around, but I doubt it'll amount to much besides hype. It's pretty clear that Satoshi might've been good at cryptography, but was pretty dumb outside of that. Removing middlemen didn't make up for all the inefficient hoops crypto has to jump through to secure the network, and immutable transactions sound great until you get scammed and have no way to recover your money.

 

[blckgrffn]

At a certain point shouldn't that make you question some assumptions you've made and whether or not they're any good.

People who keep predicting the total collapse of cryptocurrency aren't really different than doomsday preachers that keep saying the world is going to end in X years even though it hasn't any of the previous times they made that claim.

Peak Oil, meet Peak Crypto! I think you'll get along famously!

TBH, I always thought peak oil had a like a decent chance of happening. I underestimated science, engineering and our willingness to commit crazy resources to the issue at hand. Or just supply and demand at its most fundamental level. /end off topic - its supposed to be a joke.

I think Crypto could really collapse hard too, but the longer this plays out and people start treating it like some sort of commodities market I find the the odds at least going down.

 

[Fanatical Meat]

Nah, the zombie comparison is pretty apt. The price goes up and the hype train shambles on, but use cases are still essentially non-existent. Crypto's only real shot at adoption was around 2014 when places people actually shop at like Dell started accepting Bitcoin, only for them to slowly drop it since A) fees got too high to be viable and B) low usage.

I dunno, I think crypto's going to stick around, but I doubt it'll amount to much besides hype. It's pretty clear that Satoshi might've been good at cryptography, but was pretty dumb outside of that. Removing middlemen didn't make up for all the inefficient hoops crypto has to jump through to secure the network, and immutable transactions sound great until you get scammed and have no way to recover your money.

I want to add:
C make a bot to shop dell for when the crypto market has a bubble that distort the price paid for a Dell

 

[DrMrLordX]

So if I were to make a new crypto that's just a clone of Etherium, it would immediately assume the same value?

No. You wouldn't have the validator base. Build that up and, potentially, yes.

In fact, there is a "clone" of Ethereum - Ethereum Classic. Though I'm pretty sure it is pretty well splintered off from the Ethereum mainnet by now. Back when it was created, it absolutely was a clone of Ethereum, and yet ETC never achieved the same market cap. Mostly this was due to a shortage of validators, though it also had to do with the bizarre way that token speculation has altered the price of both ETH and ETC.

I will repeat: ETH is vastly overvalued at this time. The EF has a lot of work to do to justify it's current market cap.

Fees will drop as throughput increases, regardless of the price of ETH. L2s are already starting that, and as they standardize, become interoperable, and have CEX to L2 bridges, we'll see fees to drop significantly even before sharding.

I agree, and I'm excited to see what Polygon can do (PolyDEX notwithstanding; they gotta fix that contract). Seems like they beat OMG to plasmas? Though I must admit that I haven't been tracking OmiseGo's progress.