Cryptocurrency

[JustAnotherTimeline]

Sound money. Lol. What is a bitcoin? It's the answer to a digital math problem, cryptographically locked up with a password, of which their is a total set of 21,000,000. Nothing about that is money.

The analog equivalent is a 4th grade teacher assigning a set of math problems to her class and making it a race to solve each one. When the problem is solved, the teacher stamps the paper with the correct answer and the student locks it in their desk.

The teacher can make a new set of math problems the next day.

Unless you tokenize something of real value, and peg the token to represent the tangible asset, it's just a stamp from the teacher saying good job Jimmy, you got the correct answer.

There are protocols vastly more efficient, faster, and allow for tokenization, escrow, automatic execution of contracts, auditability, KYC, etc. Some of these protocol and tokens will be adopted and have value in one of two ways.

1. The token and network solve a business problem and do so in a more economical manner than current systems. (What Ethereuum claims to do but does not)
2. The token is pegged to sovereign currencies and assigned a value much like gold used to be pegged to the dollar.

Why most will go to zero? Survival of the fittest. Most aren't purpose built to solve any problem and are just a programmer in a garage throwing crap at the wall, or just scams, including scams run by financial institutions in the shadows. Many have exploitable problems in their code, structure, or security. Many aren't easy to upgrade the cipher if it becomes economical to attack it. Proof of work and even proof of stake consensus has inherent drawbacks.

Bitcoin has first mover advantage, and tremendous dark money behind it. It's not anything what the Twitter influencers and YouTube stars say it is. You're getting sold a bill of goods that has served a sinister purpose since inception, but that usefulness is running it's course.

This post will mostly fall on deaf ears.

Some great points here! I actually agree with quite a bit of it.

A few thoughts:

1. You can disagree all you want, but by some definitions bitcoin absolutely meets the criteria for sound money.

2. I recognize you are downplaying the mining process with your example. However, you fail to appreciate the genius of the self regulating system. The difficulty level to "guess" adjusts based primarily on network node participation. Nodes only participate in the network if the block reward is profitable. This ensures competition and the reason you will see a shift toward more and more renewable energy for mining companies. Much like a military, the miners protect the network from 51% attack. The point it, the mining process serves a purpose and isn't ridiculous as you suggest.

3. Your dark money assertion is rubbish and decade old narrative. Here is a supporting article. If you are concerned about nefarious activity you would support bitcoin as a global currency. It's far easier to track than dollars. Dollars have a much higher percentage of suspected illicit transactions than bitcoin.

The False Narrative Of Bitcoin’s Role In Illicit Activity

The majority of cryptocurrency is not used for criminal activity. According to an excerpt from Chainalysis’ 2021 report, in 2020, criminal activity only represented .34% of all cryptocurrency transaction volume.

www.forbes.com

Bottom line:
I am interested in holding an asset with a known supply, is fungible, can be easily transferred, is trustless, and outside central control and manipulation.

I don't really care if you call if money or an investment. It doesn't really matter. Those are the properties bitcoin investors are interested in. If you can suggest something else that meets this criteria, or even comes close, I would be happy to drop my case for BTC.

 

[JustAnotherTimeline]

Now that Luna has been killed, Binance coin might be next to fall. I don't know the order, but fall they will like a chain of dominos.

Luna failed for a specific reason. This reason doesn't apply to BNB. In fact, it doesn't apply to any of the other layer 1 protocols.

 

[JustAnotherTimeline]

Is it though? I've yet to see anything innovative come out of that space - the only thing I've seen is people recreating existing capabilities using different technology that is most often inferior to the existing capabilities but at best provides incremental improvement. Second Life in VR is still Second Life at the end of the day. Banking using the blockchain is still banking at the end of the day. Selling royalties using an NFT based smart contract on the Ethereum blockchain is still selling royalties based on a contract at the end of the day.

The invention of Bitcoin in 2009 was innovative, so was developing the concept of the distributed ledger. So far, no one has come up with a use case compelling enough to inspire widespread adoption for either of those yet. Is there something innovative - something that the average person will want to use - that is in development in the crypto/web3/metaverse space? For example - TikTok went from nothing to basically eating Twitter/Youtube/etc's lunch in a few years. We've yet to see that with Web3.



Preston Pysh is an interesting guy. I'm not going to say he isn't a successful investor or that he isn't smart, but he went off the deep end into crypto evangelist territory a few years ago. I listen to his (former) podcast We Study Billionaires which he was essentially kicked off of because he was so far into the crypto world that he couldn't even talk about regular investments and economics anymore. And that podcast is basically a bunch of tech bros that buy into every hyped up buzzword you have to grit your teeth to listen to half the time as it is, for him to be booted out of it is really saying something. His argument that inflation should be measured as the change in M2 money supply is just BS. I've always wanted to see a guy like him truly debate someone who is an expert and is not down the rabbit hole of hard money/crypto.

It depends on what you think is innovative, I suppose. I can lend/borrow funds in a permissionless environment. I receive yield instead of banks. Is that not innovative to you?

 

[JustAnotherTimeline]

I am not discounting the people that have made money trading bitcoin. To me, that doens't justify its existance.

For a decentralized currency, it was created by a guy who wrote an algorithm. Its defernders talk about how no one can control it, yet put endless blind faith into a guy and his coding. At least with fiat currency there is some transparency, whether you agree with decisions or not.

Let's pretend a bitcoin is a house. There will only ever be 21,000 houses. The population keeps growing and growing, yet we cannot build more houses. Those who own the houses will get rich as their value goes up. The rest of society will not as they need to pay more to get into a house. Inflation or deflation, the result is the same. A select few holding onto their "asset" for as long as possible. If you only ever had 21,000 houses,. why would you barter/trade/transact in real estate?

And to the question "what currency can solve the following issues..."

Why do those issues need to be solved? Why do we need untraceable, instantaneous movement of unlimited amounts of money? Go back to my house example... the question could be reframed as "Why do we need to know who owns the houses, when they're sold, and why they're sold?" Imagine the absolute corruption in the market if you couldn't build more houses and no one knew who owned/bought houses, and you couldn't do anything about it. How is this different?

Again, the fact people became millionaires investing in bitcoin early on is not proof of its inherent value to the greater society. People have made millions investing in art. Great. That doesn't help the other 7 billion people who are unable to do so.

bitcoin solves the problem of trust. No need for a third party like a bank or any other rails.

 

[JustAnotherTimeline]

Agreed. Any aggression I have around the coins are the online cult members who have bought into an idea that this is going to revolutionize the world. It might be a part of some future but it's not going to revolutionary at all IMO. We're 10 years into Bitcoin. 10 years after the internet hit the world was vastly different.

The benefits are obvious but the downsides make bitcoin zero a real possibility whether people like it or not. If there is a 9/11 type attack on America in the next week that we find out was funded by bitcoin and other cryptocurrencies, the government will absolutely smash them and that will make mass adoption extremely unlikely. If we find out some big drug cartel has been doing the same then the same thing happens. When things are allowed to expand unfettered by regulation the growth possibilities are greater. There could be something that comes along that's better than bitcoin technology wise we just don't know about. Technology, especially AI is getting better at an extremely quick rate. GPT3 and stuff like DALL-E are absolutely insane when you look at what GPT2 was even 2 years ago. It's 14 year old technology now and stuff moves quickly.

I know illegal activity is the main issue for you. Maybe check out the article I posted above. Respectfully, I really don't think reality is anything like you describe.

 

[BryceC]

I know illegal activity is the main issue for you. Maybe check out the article I posted above. Respectfully, I really don't think reality is anything like you describe.

Well yes, because it's hard to exchange currently. If it becomes ubiquitous like a lot of people want, it will become the de facto money laundering/financing arm of all kinds of illegal enterprises. Like I said, most people are still using it as an investment tool. If it actually becomes useful as money, then we will have every major criminal organization getting in on it.

 

[JustAnotherTimeline]

Well yes, because it's hard to exchange currently. If it becomes ubiquitous like a lot of people want, it will become the de facto money laundering/financing arm of all kinds of illegal enterprises. Like I said, most people are still using it as an investment tool. If it actually becomes useful as money, then we will have every major criminal organization getting in on it.

Hard to exchange? Ukraine said they were able to directly spend 90% of the crypto they received for military equipment. Meaning, 90% of the funds were accepted by the merchant in crypto.

 

[cyfanbr]

Is it though? I've yet to see anything innovative come out of that space - the only thing I've seen is people recreating existing capabilities using different technology that is most often inferior to the existing capabilities but at best provides incremental improvement. Second Life in VR is still Second Life at the end of the day. Banking using the blockchain is still banking at the end of the day. Selling royalties using an NFT based smart contract on the Ethereum blockchain is still selling royalties based on a contract at the end of the day.

The invention of Bitcoin in 2009 was innovative, so was developing the concept of the distributed ledger. So far, no one has come up with a use case compelling enough to inspire widespread adoption for either of those yet. Is there something innovative - something that the average person will want to use - that is in development in the crypto/web3/metaverse space? For example - TikTok went from nothing to basically eating Twitter/Youtube/etc's lunch in a few years. We've yet to see that with Web3.



Preston Pysh is an interesting guy. I'm not going to say he isn't a successful investor or that he isn't smart, but he went off the deep end into crypto evangelist territory a few years ago. I listen to his (former) podcast We Study Billionaires which he was essentially kicked off of because he was so far into the crypto world that he couldn't even talk about regular investments and economics anymore. And that podcast is basically a bunch of tech bros that buy into every hyped up buzzword you have to grit your teeth to listen to half the time as it is, for him to be booted out of it is really saying something. His argument that inflation should be measured as the change in M2 money supply is just BS. I've always wanted to see a guy like him truly debate someone who is an expert and is not down the rabbit hole of hard money/crypto.

I really like Preston, and originally knew him from his original podcast as well. Not sure if getting booted is quite right, but yes they decided to have two separate episodes, one dedicated to crypto and one dedicated to traditional investing.

He also has said that will go back to value inverting once money is fixed, he is conviction level is much higher than mine, but I do give him credit for being honest about his dedication to the topic.

Out of curiosity why is M2 a bad indicator of inflation? I’m not saying it is a 1:1 ratio, but I also disagree that there isn’t a correlation.

 

[cyfanbr]

I think the correction we’re seeing in the markets is evidence the system still works…thankfully. I don’t like losing money, but I’m very encouraged that regardless of how (not) intelligent the people are who are in charge, the markets will eventually correct themselves.

I certainly don’t begrudge anyone who has made money investing in crypto I have a friend who was able to let his wife stop working because of money they made, but now that rates are going up and money is tightening (and people have spent some of the extra savings they built up on houses, cars, finally getting out for a vacation or two, etc.), I think we’re seeing money being pulled out of these speculative plays at a higher rate, so people who believe in cryptocurrency should take a hard look at the fundamentals and decide if they believe there’s a viable path to crypto being used in the future…or if they just think it’s a good idea in theory (but perhaps nothing being offered is going to work).

I invested a small amount of money several years back in debit cards that essentially had a rolling digital pin system built into them. It was a good idea for security purposes, but the cost of the cards ended up being too high to get the buy-in needed…so it failed. From my vantage point, crypto has similarly failed. It is only worth something because of its limited supply…and the speculation of “what if this works?” As people cash in on their “winnings” from an investment perspective, and that drives people to look at the fundamentals…and they largely say this doesn’t work…it all goes to zero. It’s not going to be any different than beanie babies…or confederacy money.

Of course I could be wrong, but in my opinion the fundamentals have to change/improve. You should believe that will happen if you remain invested.

Thanks for engaging in a polite and helpful discussion. After reading your replies I think we actually agree on quite a bit, but not on everything of course, and that’s ok.

Speculative money has definitely gone into crypto and other asseara as you pointed it out. Now with financial conditions tightening, some of that money is getting pulled out, which overall I think it is a positive thing.

Regarding the on going correction, it is a start, but ultimately I believe the FED and the government will step in if things get uglier. I get it, that’s their incentive, but the can will just continue to get kicked down the road until the no longer can. Ray Dalio had a great video back in 2013, explaining how the economy works (I will link below if you are interested), but that’s not how things have worked since 2008.

I think it is still early and am hopeful that bitcoin specifically might still do good things for society. Lightning network thus far seems to be a successful link atino built on top of bitcoin. Believe their first international roll-out was in Salvador where a majority of people are unbanked, but almost everyone has cellphones, and lightning can facilitate those people become part of the financial system. Few weeks back they launched in Argentina, which is another country that suffered crazy levels of inflation.

Ultimately, my recommendation for most people is make a small allocation that won’t make you lose any sleep if it went to zero, then as you learn you can increase your position if your conviction changes.

 

[cyfanbr]

@agrabes if you used to like Preston, then I suggest following Lyn Alden. She transitioned into investing into bitcoin, but still does a lot of work around traditional investing as a whole. Her newsletter and articles that she puts out are great.

Lyn Alden

Get investment strategies, updates on changing market conditions, and specific investment ideas. Join now!

www.lynalden.com

 

[TrailCy]

bitcoin solves the problem of trust. No need for a third party like a bank or any other rails.

It's the complete opposite to me. I guess I don't distrust institutions.

 

[agrabes]

It depends on what you think is innovative, I suppose. I can lend/borrow funds in a permissionless environment. I receive yield instead of banks. Is that not innovative to you?

No - you and I could arrange a private loan agreement today without involving banks (well, without the bank facilitating the loan). There are even ways currently to arrange these kinds of direct loans to strangers using traditional non-blockchain technology through various websites and charities. That is not innovative to me, I'm not sure if it even qualifies as an incremental improvement at least from my perspective.

I really like Preston, and originally knew him from his original podcast as well. Not sure if getting booted is quite right, but yes they decided to have two separate episodes, one dedicated to crypto and one dedicated to traditional investing.

He also has said that will go back to value inverting once money is fixed, he is conviction level is much higher than mine, but I do give him credit for being honest about his dedication to the topic.

Out of curiosity why is M2 a bad indicator of inflation? I’m not saying it is a 1:1 ratio, but I also disagree that there isn’t a correlation.

It's true, it's a little more complicated than him being booted off the main podcast since he does have his spinoff show. And maybe he was getting burnt out on doing it in general. But he couldn't stay in the main show because he just isn't willing to engage with the normal market for the time being. It was definitely starting to turn me off. Though his replacement Trey Lockerbee is honestly maybe worse in a totally different way, I don't even listen to most episodes anymore. At least with Preston he brought in (usually) interesting guests. I have listened to Lyn Alden when she's been a guest on their show and she has seemed a lot more pragmatic - acknowledging the pros and cons with a more critical eye.

In terms of the M2 money supply, I think it's a bad metric because it's not measuring inflation. It's measuring money supply. I think on that show, they get lost as to what inflation/deflation metrics are intended to capture which is the change in cost of living for the majority of Americans. That's why the CPI is the most widely used metric - it's a basket of the types of things that most people need and want to buy. The M2 money supply can contribute to inflation but it's not a direct measure of it. There's a separate argument to be made (imo) regarding stock market evaluations and pricing, which I think has more correlation to M2 and easy money policies. But I also feel like the way Preston and others like him spin it is not right. Preston's take seems to be that these are the foolish actions of an incompetent Fed who never suspected there would be a downside. And that the Fed is selectively manipulating the CPI to hide the truth of real inflation from us so they and all their buddies can stay fat dumb and happy. My take is that these are calculated actions taken by the Fed knowing the consequences of what they did. That the Fed is not manipulating CPI or trying to hide real inflation and are genuinely doing their best to manage monetary policy for the better of the country and the world.

 

[JustAnotherTimeline]

No - you and I could arrange a private loan agreement today without involving banks (well, without the bank facilitating the loan). There are even ways currently to arrange these kinds of direct loans to strangers using traditional non-blockchain technology through various websites and charities. That is not innovative to me, I'm not sure if it even qualifies as an incremental improvement at least from my perspective.



It's true, it's a little more complicated than him being booted off the main podcast since he does have his spinoff show. And maybe he was getting burnt out on doing it in general. But he couldn't stay in the main show because he just isn't willing to engage with the normal market for the time being. It was definitely starting to turn me off. Though his replacement Trey Lockerbee is honestly maybe worse in a totally different way, I don't even listen to most episodes anymore. At least with Preston he brought in (usually) interesting guests. I have listened to Lyn Alden when she's been a guest on their show and she has seemed a lot more pragmatic - acknowledging the pros and cons with a more critical eye.

In terms of the M2 money supply, I think it's a bad metric because it's not measuring inflation. It's measuring money supply. I think on that show, they get lost as to what inflation/deflation metrics are intended to capture which is the change in cost of living for the majority of Americans. That's why the CPI is the most widely used metric - it's a basket of the types of things that most people need and want to buy. The M2 money supply can contribute to inflation but it's not a direct measure of it. There's a separate argument to be made (imo) regarding stock market evaluations and pricing, which I think has more correlation to M2 and easy money policies. But I also feel like the way Preston and others like him spin it is not right. Preston's take seems to be that these are the foolish actions of an incompetent Fed who never suspected there would be a downside. And that the Fed is selectively manipulating the CPI to hide the truth of real inflation from us so they and all their buddies can stay fat dumb and happy. My take is that these are calculated actions taken by the Fed knowing the consequences of what they did. That the Fed is not manipulating CPI or trying to hide real inflation and are genuinely doing their best to manage monetary policy for the better of the country and the world.

The examples you gave are not permissionless nor can they they pay yield to both the lender and the borrower.

 

[JustAnotherTimeline]

No - you and I could arrange a private loan agreement today without involving banks (well, without the bank facilitating the loan). There are even ways currently to arrange these kinds of direct loans to strangers using traditional non-blockchain technology through various websites and charities. That is not innovative to me, I'm not sure if it even qualifies as an incremental improvement at least from my perspective.



It's true, it's a little more complicated than him being booted off the main podcast since he does have his spinoff show. And maybe he was getting burnt out on doing it in general. But he couldn't stay in the main show because he just isn't willing to engage with the normal market for the time being. It was definitely starting to turn me off. Though his replacement Trey Lockerbee is honestly maybe worse in a totally different way, I don't even listen to most episodes anymore. At least with Preston he brought in (usually) interesting guests. I have listened to Lyn Alden when she's been a guest on their show and she has seemed a lot more pragmatic - acknowledging the pros and cons with a more critical eye.

In terms of the M2 money supply, I think it's a bad metric because it's not measuring inflation. It's measuring money supply. I think on that show, they get lost as to what inflation/deflation metrics are intended to capture which is the change in cost of living for the majority of Americans. That's why the CPI is the most widely used metric - it's a basket of the types of things that most people need and want to buy. The M2 money supply can contribute to inflation but it's not a direct measure of it. There's a separate argument to be made (imo) regarding stock market evaluations and pricing, which I think has more correlation to M2 and easy money policies. But I also feel like the way Preston and others like him spin it is not right. Preston's take seems to be that these are the foolish actions of an incompetent Fed who never suspected there would be a downside. And that the Fed is selectively manipulating the CPI to hide the truth of real inflation from us so they and all their buddies can stay fat dumb and happy. My take is that these are calculated actions taken by the Fed knowing the consequences of what they did. That the Fed is not manipulating CPI or trying to hide real inflation and are genuinely doing their best to manage monetary policy for the better of the country and the world.

In addition, third party websites and p2p services typically charge predatory interest rates and they are often based on credit. Your examples are not at all analogous to sites like curve Fi.

 

[nocsious3]

Some great points here! I actually agree with quite a bit of it.

A few thoughts:

1. You can disagree all you want, but by some definitions bitcoin absolutely meets the criteria for sound money.

2. I recognize you are downplaying the mining process with your example. However, you fail to appreciate the genius of the self regulating system. The difficulty level to "guess" adjusts based primarily on network node participation. Nodes only participate in the network if the block reward is profitable. This ensures competition and the reason you will see a shift toward more and more renewable energy for mining companies. Much like a military, the miners protect the network from 51% attack. The point it, the mining process serves a purpose and isn't ridiculous as you suggest.

3. Your dark money assertion is rubbish and decade old narrative. Here is a supporting article. If you are concerned about nefarious activity you would support bitcoin as a global currency. It's far easier to track than dollars. Dollars have a much higher percentage of suspected illicit transactions than bitcoin.

The False Narrative Of Bitcoin’s Role In Illicit Activity

The majority of cryptocurrency is not used for criminal activity. According to an excerpt from Chainalysis’ 2021 report, in 2020, criminal activity only represented .34% of all cryptocurrency transaction volume.

www.forbes.com

Bottom line:
I am interested in holding an asset with a known supply, is fungible, can be easily transferred, is trustless, and outside central control and manipulation.

I don't really care if you call if money or an investment. It doesn't really matter. Those are the properties bitcoin investors are interested in. If you can suggest something else that meets this criteria, or even comes close, I would be happy to drop my case for BTC.

Luna failed for a specific reason. This reason doesn't apply to BNB. In fact, it doesn't apply to any of the other layer 1 protocols.

We'll revisit this in a few months. By the way, it's almost all dark money, dollar included because it's almost all corrupt.

What makes you think I don't know the difficulty of the hashing algorithm is throttled for bitcoin? In my teacher example, she can throttle the difficulty of the problems too. It's not a magic feature.

Who controls the currency? Who really controls the currency?

Start with the Fed in 1913. Bretton Woods. Nixon "temporarily" closing the gold window in I think 1971. What happened in 2007-2009 and why might Bitcoin been created in response? Utopian money outside of government control? I'm a huge libertarian but that's a gigantic ruse. Satoshi Nakamoto is fantasy land. Treasury bonds and reserve currency status and a world forced to use dollars? Triffin dilemma?

With all do respect, you're like the poster child for the Dunning Kruger effect.

Dig into documents that your YouTube heroes won't touch. It's all there. Public info nobody reads. I'm talking docs from Financial Stability Board, Bank of International settlements, IMF, various central banks around the world, US faster payments coalition, even the dreaded World Economic forum.

If you want to know the future of money, it's decided in back rooms in mountain Swiss hotels by threat and force.

I'm not going to tell you. You wouldn't believe me anyhow. You have to figure it out for yourself.

 

[JustAnotherTimeline]

We'll revisit this in a few months. By the way, it's almost all dark money, dollar included because it's almost all corrupt.

What makes you think I don't know the difficulty of the hashing algorithm is throttled for bitcoin? In my teacher example, she can throttle the difficulty of the problems too. It's not a magic feature.

Who controls the currency? Who really controls the currency?

Start with the Fed in 1913. Bretton Woods. Nixon "temporarily" closing the gold window in I think 1971. What happened in 2007-2009 and why might Bitcoin been created in response? Utopian money outside of government control? I'm a huge libertarian but that's a gigantic ruse. Satoshi Nakamoto is fantasy land. Treasury bonds and reserve currency status and a world forced to use dollars? Triffin dilemma?

With all do respect, you're like the poster child for the Dunning Kruger effect.

Dig into documents that your YouTube heroes won't touch. It's all there. Public info nobody reads. I'm talking docs from Financial Stability Board, Bank of International settlements, IMF, various central banks around the world, US faster payments coalition, even the dreaded World Economic forum.

If you want to know the future of money, it's decided in back rooms in mountain Swiss hotels by threat and force.

I'm not going to tell you. You wouldn't believe me anyhow. You have to figure it out for yourself.

I share your general distrust of our global systems. Although I'm not sure I share the conspiracy level type stuff you are suggesting. But, heck you could be right. Wouldn't shock me.

Personally, I appreciate your perspective except perhaps the dunning kruger comparison. Could I be what you say? Am I overestimating my knowledge/certainty on the matter? Maybe. Although most posters come across as pretty certain of their opinion.

What makes you think you haven't fallen victim to what you suggest of me? Most people have trouble seeing the plank in their own eye. Are you somehow immune to bias? I will admit I don't know if my opinion will prevail. Will you? Could you be wrong and overestimating your own abilities?

 

[nocsious3]

Luna failed for a specific reason. This reason doesn't apply to BNB. In fact, it doesn't apply to any of the other layer 1 protocol

bitcoin solves the problem of trust. No need for a third party like a bank or any other rails.

bitcoin solves the problem of trust. No need for a third party like a bank or any other rails.

Indeed it does, but even the fictional Satoshi was intrigued by other trust mechanisms. All of them have pros and cons.

I share your general distrust of our global systems. Although I'm not sure I share the conspiracy level type stuff you are suggesting. But, heck you could be right. Wouldn't shock me.

Personally, I appreciate your perspective except perhaps the dunning kruger comparison. Could I be what you say? Am I overestimating my knowledge/certainty on the matter? Maybe. Although most posters come across as pretty certain of their opinion.

What makes you think you haven't fallen victim to what you suggest of me? Most people have trouble seeing the plank in their own eye. Are you somehow immune to bias? I will admit I don't know if my opinion will prevail. Will you? Could you be wrong and overestimating your own abilities?

I've put in the work. Almost everyone that talks about this stuff, shaping the opinions of the masses, is selling something.

 

[nocsious3]

I share your general distrust of our global systems. Although I'm not sure I share the conspiracy level type stuff you are suggesting. But, heck you could be right. Wouldn't shock me.

Personally, I appreciate your perspective except perhaps the dunning kruger comparison. Could I be what you say? Am I overestimating my knowledge/certainty on the matter? Maybe. Although most posters come across as pretty certain of their opinion.

What makes you think you haven't fallen victim to what you suggest of me? Most people have trouble seeing the plank in their own eye. Are you somehow immune to bias? I will admit I don't know if my opinion will prevail. Will you? Could you be wrong and overestimating your own abilities?

I share your general distrust of our global systems. Although I'm not sure I share the conspiracy level type stuff you are suggesting. But, heck you could be right. Wouldn't shock me.

Personally, I appreciate your perspective except perhaps the dunning kruger comparison. Could I be what you say? Am I overestimating my knowledge/certainty on the matter? Maybe. Although most posters come across as pretty certain of their opinion.

What makes you think you haven't fallen victim to what you suggest of me? Most people have trouble seeing the plank in their own eye. Are you somehow immune to bias? I will admit I don't know if my opinion will prevail. Will you? Could you be wrong and overestimating your own abilities?

Thank you truly for considering the opinion.

 

[agrabes]

The examples you gave are not permissionless nor can they they pay yield to both the lender and the borrower.

What does a permissionless loan look like then? If I loan money to you in a private agreement, what permissions are required that would not be required in the system you're talking about?

How can any loan pay a yield to the borrower? A loan is a fundamental concept - A agrees to give money to B, B agrees to pay the money back over time with interest. If B doesn't have to pay interest, it's not a loan, it's a gift. B could invest the money loaned by A and earn a yield on that money, but that is not part of the loan.

In terms of high fees, etc - I wouldn't doubt that those fees may be high. There is a reason for it - there is a high risk in those types of situations that one party or another will not fulfill their end of the bargain.

I spent a little time on the Curve.fi site looking into what it is. It does not appear to be a loan at all. It seems like a high risk unregulated bank, where the "bank manager" (in this case the largest contributors to the pool?) uses the funds to speculate on arbitrage between different crypto exchanges which can earn the users a return similar to the way a bank pays interest on a savings account. Seems like it's essentially a crypto credit union savings account. I guess in exchange for the very high risk relative to a credit union, you get the ability to make permissionless trades. It doesn't seem (unless I'm completely misunderstanding it) that it pays yield to the borrower - it pays yield to the lender who supplied the liquidity in a certain stable coin (aka loan) and the borrower pays that in the penalty for "overdrawing" a certain type of stable coin but makes it back in their investment.

I still wouldn't call it innovative - it's interesting that someone has done this but it's the same concept as something like a credit union where individuals come together to pool money and avoid fees, etc charged by big banks. Maybe call it unregulated cooperative banking. But at the end of the day, it's still translating a concept that already exists into the crypto world.

 

[besserheimerphat]

I think the better analogy is land, not a house. Bitcoin can be divided into fractions and a house cannot.

Which is it? Can Bitcoin be divided indefinitely, or is there a limited supply? It can't be both. Not necessarily asking you to answer, but it's something that has always bothered me.

There are a finite number of gold atoms that humans can extract - that's truly scarce. If you can always sell someone a smaller fraction of bitcoin, then it's not really limited and the "advantages" of scarcity don't apply. Someone said earlier that "there are 100M says per bitcoin," implying they can always be divided into smaller and smaller increments. If they continually increase in value, especially exponentially as the bros claim, eventually that smallest unit becomes too expensive for people to obtain. That scarcity is how they gain value. But if they can always be divides so everyone can have access, then there is no scarcity and no mechanism for value to go up indefinitely.