Blockchain update

[lakedaemonian]

Re: Blockchain update

https://www.cnbc.com/2018/01/16/why-...-holdings.html

If it is so lucrative to create your own crypto, why won't fb or google or paypal come out with their own crypto. With the user and merchant account reach that these company got, they could literally print hundreds of billions of dollars.

Paypal has 180 active users that can readily buy PPcoins using their paypal balance.

Something just doesn't add up?

I hate to say it gain, but “network effect”?

Everything you mentiined relies directly/indirectly on credit cards.

Back in 2016 a classmate of mine and CIO of a major bank took me thru the convoluted process of credit card transaction processing that is nothing short of Byzantine.

I’ll try to articulate it:

Credit card transactions for consumers are fast and pain free(win for legacy credit cards)

Credit card acceptability across vast merchant networks(win for legacy credit cards, resilient network effect sitting on top of obsolete process)

but:

Credit card fees fees can be horrendous, especially for pseudo credit card fees used by working poor(big problem for the “billions at the bottom”, hence my focus on the developing world possibly discovering the solution first)

Credit card processing back office is a Byzantine over complicated inelegant mess(big problem for those in the entire processing chain)

[lakedaemonian]

Re: Blockchain update

The Panda algorithm drastically altered the economics of web publishing in terms of SEO to where the same piece of content will rank vastly differently based on where it is published.

Many informational sites without strong user engagement metrics ended up having to be gutted and carved up.

• About.com became DotDash with a half dozen or so niche sites. Those largeish vertical sites drastically outperformed what About.com was doing.
• ArticlesBase.com went from making $500k a month to not being able to sell at auction for a few grand.
• Suite101.com went offline.
• eZineArticles.com took a big hit.
• HubPages.com, perhaps one of the best fighters, recently sold for something like $5 million after raising $7 million or $8 million about a decade ago. They also did the splitting of their site into verticals. I talked to their CEO via emails a few times a few years back and he is one smart dude, so them selling & maybe hoping for an earn out tells you just how tough things have grown.

The issue with those sites was not just size or page count, but rather brand awareness.

When links were the primary driver of rankings you really didn't need much in the way of brand to compete.

And when you could recycle many link sources quickly & easily across different sites, if you go back a decade there is no question operating 50 informational sites was usually better than operating one big site. But as the technical costs of operating sites have grown (https implementation, responsive design, increasing expenses to keep sites secure against more broad hacking efforts, etc.) operating fewer & deeper sites is typically better.

You don't want the sites to be so broad they stand for nothing, but if you create something that is high quality you will both feed into your brand and benefit your brand more if that content is on your main branded site ... at least in most cases.

Now there are some dominant web players like Zillow that buy out a Trulia or an Expedia that buys out a Travelocity & Orbitz to try to own more of the organic result set, but most the big network builders are moving toward branded names and away from generically descriptive names.

Zillow recently relaunched realestate.com (a year or so ago maybe)
https://www.semrush.com/info/realestate.com
it was an older site which used to be owned by LendingTree so it already had some ability to rank for the core term [real estate] but hasn't be able to rank very well for other terms (at least not when compared against Zillow or Trulia).

I get having different sites for different market segments (say bubble vs tinder vs grindr or such) but informational sites which do not offer interactive features keep sliding in terms of relevance and exposure.


Also the cost to develop the domain name and to try to rank the site and to try to maintain both the rankings and the site.

Another factor (& a way to turn garbage inventory into higher quality traffic sources) is ad retargeting. That is a big, big part of Facebook's ad revenues.

This is another reason many people will put content on a single site rather than across sites...it makes full funnel analysis easier & makes it easier to retarget audience sets.

I am not saying "domains have no value" or anything like that. Only that the central players have sucked a lot of the value out of them relative to what they had a decade ago.

And this declining value impact I am speaking of has more to do with generically descriptive keyword domains rather than say short brandable names.


Shill bidding is widespread in domain names. As I mentioned earlier in thread, it was systemically done by employees within the auction house, and it is frequently done by the domain owners for even just sort of ok names.

I looked back as some of the names I bought for ~ $300ish on SnapNames back in the day & the only other bidder in the auction was a last second halverez, who drove the auctions from the $59 or $69 minimum to within $20 of my max bid.

One of the $300ish name bought on SnapNames over a decade ago made that much per day for a few years. Now such names would get only a small fraction of the traffic they would have got pre-Panda. I don't think I would pay $300 for a similar name today because it would likely cost 6 figures or more to try to get it to rank & then the core terms it would rank for would have 4 ads above the organic search results. After a 6 figure investment one would need it to rank #1 organically for an extended period of time to have any hope for it to back out.

I was quite lucky to have sold some of those before things got so rough!


Are the big companies at this point so aligned with the establishment that they gain nothing but regulatory risk by launching cryptos?

Paypal has partnerships with Visa and MasterCard which could get uglier if Paypal started doing virtual coins. Plus Paypal already has the ability to monetize user balances to earn interest on it while money sits in user Paypal accounts. Paypal has pushed into merchant cash advance quite aggressively over the past 3 or 4 years, but I don't see what they would gain by having a crypto. If it is stable it is another layer of complexity to manage & probably a complex one at that with all the different laws associated with money transmission stuff post September 11. If it is unstable, it undermines the utility of their main service & erodes their perceived brand value.

Amazon has their "coins" but they are static valued
https://www.amazon.com/gp/help/custo...deId=201357530

in 2013 Facebook did away from their Credits system they launched in 2010
https://en.wikipedia.org/wiki/Facebook_Credits

I believe Paypal would possibly be very well placed to help people convert their credit card cash into various coins partnering with an exchange.

Onramp/offramp for Crypto is a very serious problem.

If it were a far simpler interface(much like making a Paypal transaction), the breadth and depth of consumer volume of crypto would be thru the roof.

Just think 20 years ago, what was the Ux/UI of getting onto the Internet?

Grandma and grandpa couldn’t possibly do it, Mom and Dad had a hard time as well.

I think that’s the strength of PayPal.....Ux/UI combined with vast user base network.

My guess with Amazon(having worked there a long time ago) is they would be most interested in stable coin only for 2 purposes:

lowest frictional cost micro transactions

convertible means of exchange for platform marketplace direct transactions between buyers/sellers using different currencies.

maybe Amazon acting as a pseudo-bank directly converting local currency to amazon coins would be beneficial, just a guess. But I assume Amazon’s actions I. The near future will indicate.

[patrikkorda]

Re: Blockchain update

I believe that after the bubble pops(decisively), NOT this upward moving “bubble staircase”, and after people hate crypto more than pets.com, Webvan.com, kozmo.com, and boo.com combined I think the narrative will be:

Some sort of silly acronym, remember ASP(active server pages) a decade before SaaS?

Affordability(low frictional costs)

Acceptability(significant penetration in retail business acceptance)

Utility(significant user base matched with

Velocity(fast transaction speed)

“3Y’s”
”4Y’s”
”5Y’s”

Something like that with a halo of crypto2 reminiscent of Internet 2.0

There are a number of scenarios out there. Here is what I am thinking:

Scenario 1: This was the last bubble
It is very likely that most bitcoin holders are staring at a loss. Looking at the volume, most people jumped in during December, once the price was above $10,000/BTC. This was also the case with all of the previous bubbles in bitcoin (and there were at least 3 prior to this one). However, what separates this one from the previous ones is the mainstream activity that took place. This was the first time regular people participated in droves. I have a stack of New York Times and WSJ newspapers that I am staring at from the past few months - bitcoin got a mention virtually everyday. Bitcoin also got lots of mentions during the run ups in 2013/2014, but most of those were one-offs and in financial related media.

Not only are most bitcoin holders staring at a loss right now, a lot of them will likely lock in that loss by selling. Moreover, I can say with absolute certainty that all of them had a terrible user experience. Every single one of them. First, there is the slow experience of getting onto an exchange. Second, there are the exorbitant fees that one has to pay in order to buy and sell bitcoin (this isn't just an exchange related issue - it is an issue with bitcoin itself). Because the 1MB blocksize limit is built into the code, you literally now have to pay $20+ for a single transaction (it used to be a fraction of a penny before the 1MB blocksize limit was hit). Want to buy a $2 cup of coffee with bitcoin because it's the hip thing to do? Congratulations, you just bought a $22+ cup of coffee. Third, there is the terrible front-end experience with bitcoin - there is none. Most people don't bother making their own wallets because there is no automatic front-end for that - their entire user experience consists of holding bitcoin on a crappy exchange and perhaps making a few transactions for exorbitant fees. For all practical purposes, exchanges are the front-end.

The worst part about all of this is that the bitcoin experience, as bad as it was, was a relatively good one compared to the other cryptocurrencies and/or crypto related ventures out there. The vast majority of ICOs will go to zero, bitconnect (a lending ponzi scheme) just shut down, and all of the other cryptocurrencies are falling even faster (since they are essentially high beta stocks).

Scenario 2: Bitcoin dies but blockchain survives
Over the past 12 months, bitcoin went from ~90% market share to ~30% market share. Although it will likely gain some market share in the short-run as prices fall (since the altcoins are like high beta stocks), I believe the damage that was inflicted by the 1MB blocksize limit is irreversible. No one in their right mind will use bitcoin with exorbitant fees, especially if there are cheaper alternatives out there. Not only do the cheaper alternatives have essentially zero fees, they have smaller market caps, making them potentially better investments. The big winners will be those that fix the issues with bitcoin and offer what it originally promised - the ability to transact with anyone anywhere in the world for free (and privately). A Swiss bank account with zero fees that can scale.

I believe Scenario 2 is the more likely one, but first, we will watch prices bleed. I won't be buying my bet until and if bitcoin falls below $5,000/BTC, which means my bet still has to fall by more than 60%. I believe the next narrative will revolve around fungibility. Yes, XRP can scale, but what good is scalability is your transactions are open for everyone to see and can be reversed by a central party? Moreover, what is the government simply decides to shut ripple down? We need a decentralized and private ripple - that will be the winner of the 1st generation.

[lakedaemonian]

Re: Blockchain update

There are a number of scenarios out there. Here is what I am thinking:

Scenario 1: This was the last bubble
It is very likely that most bitcoin holders are staring at a loss. Looking at the volume, most people jumped in during December, once the price was above $10,000/BTC. This was also the case with all of the previous bubbles in bitcoin (and there were at least 3 prior to this one). However, what separates this one from the previous ones is the mainstream activity that took place. This was the first time regular people participated in droves. I have a stack of New York Times and WSJ newspapers that I am staring at from the past few months - bitcoin got a mention virtually everyday. Bitcoin also got lots of mentions during the run ups in 2013/2014, but most of those were one-offs and in financial related media.

Not only are most bitcoin holders staring at a loss right now, a lot of them will likely lock in that loss by selling. Moreover, I can say with absolute certainty that all of them had a terrible user experience. Every single one of them. First, there is the slow experience of getting onto an exchange. Second, there are the exorbitant fees that one has to pay in order to buy and sell bitcoin (this isn't just an exchange related issue - it is an issue with bitcoin itself). Because the 1MB blocksize limit is built into the code, you literally now have to pay $20+ for a single transaction (it used to be a fraction of a penny before the 1MB blocksize limit was hit). Want to buy a $2 cup of coffee with bitcoin because it's the hip thing to do? Congratulations, you just bought a $22+ cup of coffee. Third, there is the terrible front-end experience with bitcoin - there is none. Most people don't bother making their own wallets because there is no automatic front-end for that - their entire user experience consists of holding bitcoin on a crappy exchange and perhaps making a few transactions for exorbitant fees. For all practical purposes, exchanges are the front-end.

The worst part about all of this is that the bitcoin experience, as bad as it was, was a relatively good one compared to the other cryptocurrencies and/or crypto related ventures out there. The vast majority of ICOs will go to zero, bitconnect (a lending ponzi scheme) just shut down, and all of the other cryptocurrencies are falling even faster (since they are essentially high beta stocks).

Scenario 2: Bitcoin dies but blockchain survives
Over the past 12 months, bitcoin went from ~90% market share to ~30% market share. Although it will likely gain some market share in the short-run as prices fall (since the altcoins are like high beta stocks), I believe the damage that was inflicted by the 1MB blocksize limit is irreversible. No one in their right mind will use bitcoin with exorbitant fees, especially if there are cheaper alternatives out there. Not only do the cheaper alternatives have essentially zero fees, they have smaller market caps, making them potentially better investments. The big winners will be those that fix the issues with bitcoin and offer what it originally promised - the ability to transact with anyone anywhere in the world for free (and privately). A Swiss bank account with zero fees that can scale.

I believe Scenario 2 is the more likely one, but first, we will watch prices bleed. I won't be buying my bet until and if bitcoin falls below $5,000/BTC, which means my bet still has to fall by more than 60%. I believe the next narrative will revolve around fungibility. Yes, XRP can scale, but what good is scalability is your transactions are open for everyone to see and can be reversed by a central party? Moreover, what is the government simply decides to shut ripple down? We need a decentralized and private ripple - that will be the winner of the 1st generation.

Great post.

I largely agree.

Bebo and Friendster set the stage for Facebook.

More often than not, its not the early bird that gets the worm but the 2nd rat eating the cheese.

utility/ubiquity is key for future scalability.

One risk I may have underestimated that could extend the Blockchain deadspace(much like dot coms and Silicon Valley in 2001-2004) is much like NZ equity market perceptions since the 1987 crash.

NZ equity markets never really recovered, while they did in 5-7 years in the US with the tech boom of the 90’s, but it’s worth mentioning that Microsoft was born in 1987(IPO) hiding in the bad news.

I met with a co-founder/senior leader of a regional exchange recently.

A bubble pop is expected by that team, but they are balancing that against their long term vision and plans, which are quite exciting...and have nothing at all to do with speculation.

Their vision has more to do with accessibility(ease of access), affordability(low frictional costs), flexibility(convertability across all assets), stability(end of speculative phase), and ubiquity(everyone using it).

I’ve been asked to keep some things confidential and likely to be under an NDA soon.

But I’m for the future of Blockchain with one of the bigger players possessing a real focus on changing the world for the better, not focused on just speculative profit.

So I’m in strong agreement with you on some version of “B”.

[lakedaemonian]

Re: Blockchain update

There are a number of scenarios out there. Here is what I am thinking:

Scenario 1: This was the last bubble
It is very likely that most bitcoin holders are staring at a loss. Looking at the volume, most people jumped in during December, once the price was above $10,000/BTC. This was also the case with all of the previous bubbles in bitcoin (and there were at least 3 prior to this one). However, what separates this one from the previous ones is the mainstream activity that took place. This was the first time regular people participated in droves. I have a stack of New York Times and WSJ newspapers that I am staring at from the past few months - bitcoin got a mention virtually everyday. Bitcoin also got lots of mentions during the run ups in 2013/2014, but most of those were one-offs and in financial related media.

Not only are most bitcoin holders staring at a loss right now, a lot of them will likely lock in that loss by selling. Moreover, I can say with absolute certainty that all of them had a terrible user experience. Every single one of them. First, there is the slow experience of getting onto an exchange. Second, there are the exorbitant fees that one has to pay in order to buy and sell bitcoin (this isn't just an exchange related issue - it is an issue with bitcoin itself). Because the 1MB blocksize limit is built into the code, you literally now have to pay $20+ for a single transaction (it used to be a fraction of a penny before the 1MB blocksize limit was hit). Want to buy a $2 cup of coffee with bitcoin because it's the hip thing to do? Congratulations, you just bought a $22+ cup of coffee. Third, there is the terrible front-end experience with bitcoin - there is none. Most people don't bother making their own wallets because there is no automatic front-end for that - their entire user experience consists of holding bitcoin on a crappy exchange and perhaps making a few transactions for exorbitant fees. For all practical purposes, exchanges are the front-end.

The worst part about all of this is that the bitcoin experience, as bad as it was, was a relatively good one compared to the other cryptocurrencies and/or crypto related ventures out there. The vast majority of ICOs will go to zero, bitconnect (a lending ponzi scheme) just shut down, and all of the other cryptocurrencies are falling even faster (since they are essentially high beta stocks).

Scenario 2: Bitcoin dies but blockchain survives
Over the past 12 months, bitcoin went from ~90% market share to ~30% market share. Although it will likely gain some market share in the short-run as prices fall (since the altcoins are like high beta stocks), I believe the damage that was inflicted by the 1MB blocksize limit is irreversible. No one in their right mind will use bitcoin with exorbitant fees, especially if there are cheaper alternatives out there. Not only do the cheaper alternatives have essentially zero fees, they have smaller market caps, making them potentially better investments. The big winners will be those that fix the issues with bitcoin and offer what it originally promised - the ability to transact with anyone anywhere in the world for free (and privately). A Swiss bank account with zero fees that can scale.

I believe Scenario 2 is the more likely one, but first, we will watch prices bleed. I won't be buying my bet until and if bitcoin falls below $5,000/BTC, which means my bet still has to fall by more than 60%. I believe the next narrative will revolve around fungibility. Yes, XRP can scale, but what good is scalability is your transactions are open for everyone to see and can be reversed by a central party? Moreover, what is the government simply decides to shut ripple down? We need a decentralized and private ripple - that will be the winner of the 1st generation.

Great post.

I largely agree.

Bebo and Friendster set the stage for Facebook.

More often than not, its not the early bird that gets the worm but the 2nd rat eating the cheese.

utility/ubiquity is key for future scalability.

One risk I may have underestimated that could extend the Blockchain deadspace(much like dot coms and Silicon Valley in 2001-2004) is much like NZ equity market perceptions since the 1987 crash.

NZ equity markets never really recovered, while they did in 5-7 years in the US with the tech boom of the 90’s, but it’s worth mentioning that Microsoft was born in 1987(IPO) hiding in the bad news.

I met with a co-founder/senior leader of a regional exchange recently.

A bubble pop is expected by that team, but they are balancing that against their long term vision and plans, which are quite exciting...and have nothing at all to do with speculation.

Their vision has more to do with accessibility(ease of access), affordability(low frictional costs), flexibility(convertability across all assets), stability(end of speculative phase), and ubiquity(everyone using it).

I’ve been asked to keep some things confidential and likely to be under an NDA soon.

But I’m for the future of Blockchain with one of the bigger players possessing a real focus on changing the world for the better, not focused on just speculative profit.

So I’m in strong agreement with you on some version of “B”.

[DSpencer]

Re: Blockchain update

Great post.

I largely agree.

Bebo and Friendster set the stage for Facebook.

More often than not, its not the early bird that gets the worm but the 2nd rat eating the cheese.

utility/ubiquity is key for future scalability.

One risk I may have underestimated that could extend the Blockchain deadspace(much like dot coms and Silicon Valley in 2001-2004) is much like NZ equity market perceptions since the 1987 crash.

NZ equity markets never really recovered, while they did in 5-7 years in the US with the tech boom of the 90’s, but it’s worth mentioning that Microsoft was born in 1987(IPO) hiding in the bad news.

I met with a co-founder/senior leader of a regional exchange recently.

A bubble pop is expected by that team, but they are balancing that against their long term vision and plans, which are quite exciting...and have nothing at all to do with speculation.

Their vision has more to do with accessibility(ease of access), affordability(low frictional costs), flexibility(convertability across all assets), stability(end of speculative phase), and ubiquity(everyone using it).

I’ve been asked to keep some things confidential and likely to be under an NDA soon.

But I’m for the future of Blockchain with one of the bigger players possessing a real focus on changing the world for the better, not focused on just speculative profit.

So I’m in strong agreement with you on some version of “B”.

There also seems to be an intrinsic hurdle for any coin trying to be both stable and ubiquitous. At the present time it seems hard to argue that the valuation increases are almost exclusively the result of speculation. What motivation does everyone have to start jumping on board a stablecoin if they don't see a way of making a quick profit?

Maybe that is the next evolution. Anyone serious about building real companies that use a cryptocurrency will realize that it's unworkable with something that changes in price by 50% week to week. The only way forward will be to actually use stablecoins. The opportunity to make fast fortunes on speculation will go away and then whoever is still interested will work on creating real value.

[VIT]

Re: Blockchain update

https://www.cnbc.com/2018/01/16/why-...-holdings.html

If it is so lucrative to create your own crypto, why won't fb or google or paypal come out with their own crypto. With the user and merchant account reach that these company got, they could literally print hundreds of billions of dollars.

Paypal has 180 active users that can readily buy PPcoins using their paypal balance.

Something just doesn't add up?

Well, it might be not that relevant question. It is the same question as why Kodak did not jump on digital, Nokia on smartphones and etc. Mature companies do not jump fast. And for PayPal they could not make even their core business work well, dealing with them as merchant (or developer) is a major PITA. They are saved only by network effect, if they would start today with their product they would get no traction.

Back to your original question Telegram messaging service will make their own crypto soon so companies do jump on.
https://www.bloomberg.com/news/artic...ggest-ico-ever
https://techcrunch.com/2018/01/08/te...-open-network/

[VIT]

Re: Blockchain update

There are a number of scenarios out there. Here is what I am thinking:

Yes, XRP can scale, but what good is scalability is your transactions are open for everyone to see and can be reversed by a central party? Moreover, what is the government simply decides to shut ripple down? We need a decentralized and private ripple - that will be the winner of the 1st generation.

What is the market size for those who needs privacy vs those who does not care. If we throw on this possible scenario where state regulations will ban private cryptos but allow others ? As for individual privacy of transactions that's a solvable problem by intermediates. Think of today most transactions are going though banks and for specific currencies. How many people care that's it is cleared with USD/EUR and etc and could be blocked by governments or banks. People just want to move money fast, cheap and no risk of tax/legal issues. There are people who cares and they have their networks (I saw one was mentioned in this topic) but hassle and transactions costs are too high for most people to deal with.

[patrikkorda]

Re: Blockchain update

What is the market size for those who needs privacy vs those who does not care. If we throw on this possible scenario where state regulations will ban private cryptos but allow others ? As for individual privacy of transactions that's a solvable problem by intermediates. Think of today most transactions are going though banks and for specific currencies. How many people care that's it is cleared with USD/EUR and etc and could be blocked by governments or banks. People just want to move money fast, cheap and no risk of tax/legal issues. There are people who cares and they have their networks (I saw one was mentioned in this topic) but hassle and transactions costs are too high for most people to deal with.

Fungibility is a key property of money since at least Crawfurd v The Royal Bank (1749). The world that we know today would have been a lot different if fungibility was not respected. The significance of fungibility cannot be overstated - it is up there with the advent of limited liability (which led New York to become the financial capital of the US).

Suppose you are a benevolent actor with nothing to hide. You will still appreciate privacy so that you cannot be implicated in an illicit transaction that took place before you ended up with a tainted token. This isn't just hypothetical, coinbase has been known to shut down accounts if tokens end up on a gambling website (three steps removed).

I'm not sure how any government can ban torrents, or cryptocurrencies. They can certainly make ramps (like exchanges) illegal, but you cannot shut down a decentralized network. A truly private cryptocurrency requires anonymity as the default option. Even if a fraction of a blockchain is visible, the entire blockchain can be deanonymized. There are companies dedicated to just this purpose - and network mapping will only get stronger over time. Would a corporation be comfortable with their competitors knowing how much they paid for their supplies? If everyone suddenly had to operate in a completely transparent world, commerce would come to a grinding halt. Everyone would know how much everyone makes, how much everyone spends, etc. That is the logical conclusion of a non-private blockchain.

It is true that, for now, nobody cares. Nobody cared about scalability either, until it became an issue. If this space continues to grow, which I believe it will, eventually people will use these things for transactions - and the fungibility debate will start. The future lies in a fast, scalable, cheap, and private cryptocurrency.

[VIT]

Re: Blockchain update

Fungibility is a key property of money since at least Crawfurd v The Royal Bank (1749). The world that we know today would have been a lot different if fungibility was not respected. The significance of fungibility cannot be overstated - it is up there with the advent of limited liability (which led New York to become the financial capital of the US).

I see your point and it is legitimate. Intermediates may partially help with this problem but not solve it. Today you also can trace most of the transactions even with full fungibility. As example all ACH/wires payments are going through one place. At the same time possibility to trace does not equal to ability for any given player (at least for money, blockchain may or may not make it easier). Do companies worry that banks or clearing house could see their transactions ? Hard to say how it will play out but need for intermediates is definitely a negative but might be a way it will go. We can not just ignore regulations since it is usually a big factor.

*No question states can ban cryptos like drugs or arms (not in US though). Is it possible to circumvent it, sure, but ease of use and adoption will suffer dramatically.

[lakedaemonian]

Re: Blockchain update

There also seems to be an intrinsic hurdle for any coin trying to be both stable and ubiquitous. At the present time it seems hard to argue that the valuation increases are almost exclusively the result of speculation. What motivation does everyone have to start jumping on board a stablecoin if they don't see a way of making a quick profit?

Maybe that is the next evolution. Anyone serious about building real companies that use a cryptocurrency will realize that it's unworkable with something that changes in price by 50% week to week. The only way forward will be to actually use stablecoins. The opportunity to make fast fortunes on speculation will go away and then whoever is still interested will work on creating real value.

I’m about to sign an NDA for related crypto stuff, but imagine the millions at the bottom in the west using check cashing firms and banks getting crushed with high friction fees.

I think a combination of stable coin and ubiquity(if/when possible) would potentially benefit those at the bottom of the pile.

A DAO and/or consensus crypto central bank could potentially act as a means to enhance stability, or at least act as a shock absorber.

Or possibly to enhance fungability of assets across asset classes and markets.

[DSpencer]

Re: Blockchain update

I’m about to sign an NDA for related crypto stuff, but imagine the millions at the bottom in the west using check cashing firms and banks getting crushed with high friction fees.

I think a combination of stable coin and ubiquity(if/when possible) would potentially benefit those at the bottom of the pile.

A DAO and/or consensus crypto central bank could potentially act as a means to enhance stability, or at least act as a shock absorber.

Or possibly to enhance fungability of assets across asset classes and markets.

Maybe it's irrelevant if you are in NZ, but I can't figure out how anyone in the US would be able to use a cryptocurrency as an actual currency without running afoul of the tax laws. It's been the case for years that crytocurrencies are not considered currency but are instead considered property and any gains are taxed as short term or long term capital gains. The tax bill last month also closes a potential loophole allowing for exchanges between cryptocurrencies to be considered non-taxable.

So basically anytime you buy a sandwich with bitcoin or litecoin or dogecoin or whatever, you have a taxable event that you need to record and report to the IRS and pay any taxes due.

I don't see how anything that is treated like this could ever achieve widespread use as a currency. I also don't see how the law could be easily changed without opening the door to rampant, but legal, tax avoidance.

[touchring]

Re: Blockchain update

There are a number of scenarios out there. Here is what I am thinking:


Scenario 1: This was the last bubble
It is very likely that most bitcoin holders are staring at a loss. Looking at the volume, most people jumped in during December, once the price was above $10,000/BTC.

Thanks for the great analysis. Assuming that people bought at $10,000 in Dec, they could still be making some money?

I find it hard to believe that the market price for Bitcoin has not fallen back to $5000 by now.

How do we know if the large exchanges are not rigged?

The risk to buying into bitcoin now is simply too high and cannot by commensurated by any gains that can be realized at this current market cap size. There's a risk that the exchange can be hacked. There's the risk that governments in different countries will ban trading. There's the risk of a global stock market correction which will impact on all markets including cryptos. There's a risk that if it is found out that a large global exchange is being rigged, countries will start freezing other exchanges or their bank accounts to investigate.

In short, it's hard to believe that the market is not rigged.

[patrikkorda]

Re: Blockchain update

I find it hard to believe that the market price for Bitcoin has not fallen back to $5000 by now.

The price can bleed for quite sometime. Just have a look at the last bubble:
Bitcoin hit a high of $1,129 on November 30th (2013). By December 18th (2013), it crashed ~50% to $548. Afterwards, there was a dead cat bounce to a high of $921 on January 6th (2014). The price then continued to bleed for over a year until it finally bottomed on January 14th (2015) at $182.

In short, bitcoin can bleed for quite some time.

[seobook]

Re: Blockchain update

In short, bitcoin can bleed for quite some time.

I am guessing the tipping into a (sort of) mainstream asset will limit the length of time it can spend on the floor, particularly in light of the lack of liquidity that could make it a good profit center for those who can repeatedly profit in a big way from pushing the price around.