Starting a crypto project
twitter.com
twitter.com
As much as they’re excited about the technology itself, very few people are actually interested in using it. Instead, their business seems to revolve around the value of the utility tokens for their project.
Few people are buying the utility tokens to pay for the service. They’re buying them to horde so they can resell to other speculators when the price goes up. They have a lot of tokens in circulation, but only a small number of them get used to pay for the service. Many of them are sitting in the wallets of exchanges where they get traded back and forth but never come near the blockchain.
Investors only care about getting more press releases out so they can pump up the price of their discounted tokens, which have a shortened lockup period relative to something like stocks. It’s almost like a pump-and-dump scheme for investors.
Maybe their underlying project will become popular in the future, but the volatility of the token price makes it increasingly unattractive for companies that want to actually use it.
It's almost like all interest in cryptocurrency is driven by greed and speculation. I've been learning more about it, and I'm pretty convinced this is the case. Go into any crypto space, and all people are talking about is yield, price action, how much their tokens have grown etc. I think the only thing I've seen that isn't purely about speculation is NFTs, oddly enough, which seem to be basically a fad.
I can hate my job but at the end of the day I still created value for my employer. Companies on the stock market still create actual value for people, even if shareholders don't particularly care how they do it.
Unless we are working with a weird and strict definition of "tangible," I'd say it's tangible good that is, rightly, valued by many millions of people.
* Governments can and have confiscated bitcoin
* they can stop transactions by blocking access to wallets and exchanges etc
* They're a terrible medium for savings, unless you want your savings account to routinely swing wildly up and down in value
* 99.9% of people interested in Bitcoin do not care about these supposed benefits (which I'm skeptical even exist.) Yes there are the handful of goldbugs and libertarians, but most just want to see the number go up.
It's a real shame.
Name one crypto project making any sort of impact.
"almost"
If even useful services are being abused for speculation, it's time to realise the entire space is fundamentally broken. We've already seen massive fraud in the space, it's only a matter of time before people who fundamentally don't understand what they are "investing in" are left holding bags. It will necessarily collapse because of how it's being used. (imo)
I suggested everyone buy it when it was under $500, I said invest with caution up to $1000. Now I can't in good faith suggest to people that they buy it. And I am fortunate, everyone who did buy it on my suggestion made plenty of money.. probably because they had me in their ear saying "don't sell it" when they hit their first bitcoin drop. I get messages often thanking me for introducing them to cryptocurrency. However I and sure that there are many who didn't buy it and now regret it. Same as there are others who bought it, sold at a loss and regret it. It has been repeated as Infinitum, only invest what you can afford to lose and that is most definitely still the case. Bitcoin can still go to zero (or close enough not to matter) but It could also go to $100,000, and right now latter is more likely, but I feel as the price goes up so does the chance it goes to zero.
Buy/hodl has converted the concept for electronic currency, if there really ever was one, into a money making endeavor based on your current wealth and ability to risk a loss. That’s the antithesis of democratization, or 1 person 1 vote, but a I was here first so that makes me king now get on your knees and grovel at my supremacy.
The only real way to look at Bitcoin is as if there is an AI operating in the background with the sole intent of taking “investors” money through constant cycles of FOMO pump and dumps. It’s a stock without any assets or profits backing its value, at any point the shareholders could just start a new company and nothing would be lost by abandoning Bitcoin, because it’s just a shell company with nothing inside.
Not a crypto hater. I even invest for fun and because you cannot deny the opportunity to make money rn. But don't expect people to ride the train blindly. I do think that crypto isn't going anywhere. But the current valuation of these coins is just absurd rn.
I was excited then, when it was new to me, but then I learnt the truth about blockchain
Cryptocurrencies: Efforts to make useful tools are driven out, speculation and fraud are rife.
Cryptography: Used to secure billions of web transactions every day on the web with very little fraud.
I took web tech to mean the technology used to serve the web - the differences with cryptocurrencies are manifold, the principal one being that billions of people use the web every day to perform important functions, compared to cryptocurrencies where most users are simply speculating on prices.
I know of a very similar company (might even be the same one) the telegram forum they have setup is just full of people speculating what will / might happen ...will it go to the moon... etc.. They have now moderated that out but still main reason people join the group to start with.
That's not a utility token. If you want to create a true utility token, make it stable and you won't have to worry about speculation.
Probably more realistic with exchanges ("authorized resellers") than individual traders.
https://www.ftc.gov/tips-advice/competition-guidance/guide-a...
In much the same way, social networks almost always seem to become hookup platforms.
There's no reason to force customers to buy a brand new token invented out of thin air just to pay for a service that could be otherwise purchased with real money or Ethereum.
I'm consistently repulsed by the lack of thoughtful discussion in crypto communities. For a space littered with intriguing technology it's endlessly frustrating that there's no HN-like forum. Instead, any community that started off that way is now filled with speculators and shillers.
Take your pick for where to source your news: 1. crypto influencers on YouTube who are paid to shill, 2. forums likw Reddit filled with speculators and conmen, 3. pump and dump groups on Telegram.
The greed and FOMO on display in the crypto gold-rush is deeply depressing, and for the majority who join the craze at the peak of the bull run, it'll surely end in tears.
There are communities like this, such as the crypto dev discord, the daily gwei discord, ethereum cat herders discord, etc. You're just in the wrong communities. That's like spending time on 4chan and saying "the internet sucks, it's filled with horrible people and no thoughtful discussions."
1. Newsletters. One basic example is Bitcoin Optech. I've always been the kind of person who looks at any newsletter just about long enough to put it in Trash. But I've come to understand there are plenty of greatly curated and/or written ones out there.
2. Podcasts. I can recommend Unconfirmed and Zero Knowledge, for example.
3. Discord (I know I miss out by not going here but the noise-to-signal ration and complete lack of privacy/anonymity/anything like that are both too much. It makes me a bit sad that this is where the action is even for infrastructure and supposedly open/freedom-asserting projects.)
Can be non-trivial to find the good ones for whatever angle/topic you are interested in, of course.
> The greed and FOMO on display in the crypto gold-rush is deeply depressing
Absolutely agree and I couldn't agree more with the comment you're replying to.
You cant discuss flaws in the current design or future design because people think you are attacking their investment!
Sure, there's cryptography in it. But you don't call a mail or http server "crypto". There's similar tech in git, we don't call it "crypto", we call it VCS.
Calling this "crypto" is just trying to add a mystic aura for stuff people don't understand, to further muddy the waters.
We have a word for this technology. It's not "crypto". It's blockchain.
Sure, it's your shorthand for "cryptocoin" or "cryptovalue". Which are again newspeak for blockchain, and we could argue that given its limits and usage of the last years they should be called crypto-investment, at best.
Which is still like ordering a pizza and forcefully referring to it only as "food". I want a pepperoni-food please.
Sorry for the rant, but it really feels like it's just a way to further embellish something with dubious values like the post points out
The "crypto" shorthand emerged from the cryptocurrency side, which by and large, uses cryptographic primitives in order to spend and receive value. One further bit worth adding is that the market demand for cryptocurrencies broadly has directed massive amounts of resources towards the development of novel cryptographic primitives.
A new one was created to convey a shared concept (aka the purpose of language) and will always be more popular than the thing you invested way too much time into to change.
It’ll sting at first but time to accept that and update your lexicon.
/thread.
This is the most frustrating thing about crypto and has been since at least 2016. Most of the projects with the highest market cap in the space either don't do anything, don't plan on doing anything and don't have any purpose.
And then you have a myriad of projects that are rewriting the traditional finance playbooks. Or blockchain infrastructure projects that are laying the foundations of what could be a fully decentralized and anonymous web. And they're worth a 100th of DOGE's market cap. Granted, they might still very well be grossly overvalued. Especially at this stage of the bull market. But the fact that there's such assymetry with projects that are at best vaporware and at worse outright scams is by far the most frustrating part of crypto.
The second most valued crypto-currency is Ethereum. And the entire ecosystem around it does plan on doing a lot of things, starting with decentralised finance.
There are also efforts to layer a network on top of Bitcoin in a bid to counter-act Ethereum. And competing networks like Diem (Facebook, Spotify, Uber...), CENTRE (Coinbase / Circle...), Stellar (Stripe...) that aim to replace the current payments infrastructure.
Then there are cross-chains like Polkadot, Cosmos, Polygon et al that try to make all of these disparate blockchains inter-programmable.
Agree that pump and dump schemes seem like the norm, but that's like saying Internet has no utility and is crap because there's porn, spam, and malware all around.
Polygon, Cosmos or other innovative L1 projects like Avalanche, Algorand or HBAR all sit at 9 digit mcap - which is certainly very high but still annoyingly low when you consider that DOGE is worth 77 billion dollars and BSC, whose sole purpose is to make scams out of ETH projects and run them on a centralized chain, sits close to 100 billion dollars.
People have completely lost the value of money, do you realize how much money is $4.5 billion?
In 2007 Apple had a market cap of 80 billion and a P/E ratio of 26, it had revolutionary products on the market that were clearly going to change an entire industry while at the same time bringing in steady revenue, can you imagine how much it would be worth today in this bubble?
I could not agree more, I've been so heated over the last year looking for any sort of rationale but this greed fueled fake currency explosion is driving me insane. I understand the tech, I don not understand the hype.
you need to adjust for inflation if you're going to use a valuation that is 14 years old.
Scams are big business, but that just illustrates how delusional and bubbly these are; is BSC, a thing I'd never heard of before, really of equivalent value to .. Square? Lockheed Martin? Target? AirBnB? AMD? NTT? Uber?
Gas costs in ETH have been at historical highs, making it uneconomical for players under 5-6 figures of capital to do basic transactions, let alone yield-farm / manage positions, so various DeFi dApps have moved over to less congested chains like BSC and Solana.
Sure, lots of scam projects due to cheaper deployment costs (again low gas fees vs Eth), but legitimate projects too: see PancakeSwap, which started out as a Uni clone, but has arguable expanded to offer more / different set of features.
Speaking more broadly, yes, we're in a crazy bubble, but that's really the case across all asset classes at the moment due to rampant central bank printing. Scams are proliferating in equities too, see SPACS.
Not to trot out the "this time is different" meme, but unlike the '17/'18 cycle, you have far fewer whitepaper copy-pasta scam ICOs and way more legitimate projects; with real teams, real users, real use-cases. Plus, institutions are actually ape-ing in, so take that for what you will.
IMO pace of development and adoption will only accelerate from here on the back of an already "mature" internet and mobile ecosystem + generational familiarity/acceptance of digital value in the youth.
As someone who grew up during the transition from analog-digital, crypto gives me mega 90s/00s internet vibes, especially the feeling of inevitability around the DeFi space.
This is the sad truth about all these people on Youtube / Twitch. I know two individuals who are sucked into their "shows" and use what they are saying as gospel. It drives me nuts because they spout off numbers like "BTC @ 100k" and theres no date given.. I just respond by saving an even more ridiculous number like "BTC @ 100bn"
It's a solution that's been searching for a problem for over 10 years.
Decentralized, distributed, blah blah, stop drinking the koolaid.
Is a network controlled primarily by 4 mining companies decentralized?
Do you need a distributed network to sell NFTS that are only useable within the world of a specific video game company? (game nfts)
Name a project that can't be accomplished traditionally with the cloud and some code?
Name a reason why you should leave your FDIC insured government backed bank for a 3rd party wallet and incur transaction fees, gas fees, fraud, hacks ect that are equivalent to wire transfer fees cbx fees ect.
The crypto community has been spewing advantages that don't exist and solutions for problems that do. not. exist.
I thought it seemed like a pretty neat idea and was encouraged by the fact that this crypto project actually did something useful. As I looked into it though I could only find people talking about how to mine the token, or details about the price, and nobody was talking about using the network. I wanted to try the network myself, or see if I could get a device on the network and what the service was like.
It's a little naive of me, but at first I was imagining something like cell service being provided by this system. I was wondering what it would take to get my laptop on it and imagining having a network connection wherever for a low price.
When I looked into it though I didn't find anyone using the network. The limitations on the network were severe, if I recall correctly their pricing calculator shows you the price of network usage in terms of cost per packet, where a packet can send something like 16 bits of information. Their envisioned use case was a collar for pets to wear that could ping the network once a day, but to my knowledge no such collars had actually been created or sold...
Disappointed to find something that looked kind of useful at first glance actually resolve to something that looks kind of useless.
Protection against a devaluing currency, privacy and access.
For so many people the answer is simply: higher interest rates.
> 90% of your telegram/discord are scammers and people asking why price is going down/accusations that you and your entire team should go to jail.
So much this. The greed of get-rich-quick crowd is the biggest hurdle in the success of crypto. Remove the incentives from crypto projects and you'll see how the interest from general public decreases. After all no one cared about BTC until people figured out how to build a ponzi scheme out of it.
Build you product on an existing reliable fast and cheap blockchain that fits your needs. Focus on the product not the price of tokens on said DLT.
You dont need a token. No, really you dont. Your tokens only use case is likely to transfer value and guess which token can do this better than yours? All of them! Simply because they already have adoption/liquidity/fiat on-ramps etc. etc. You also instantly gain a community simply by using a token that has a community already.
And you avoid lots of legal problems.
Here are some companies that did/do this:
coil.com
sologenic.org
gatehub.net
forte.io
raisedinspace.com
(Very biased (they all use XRPL.org) because I simply dont know other projects. But you get the point, every DLT that actually works in a useful way should have people building on top - if not its probably garbage tech)
Other way round: transferring value to yourself is the only use case.
If you take a second to look in the mirror and see the wreckage of previous startups in this space, you'll see that - as pointed out in the OP thread - 99% of the community is there for the pump and dump. For all the practical purposes, distributed solutions end up worse than centralised ones. Except possibly for censorship resistance, which means you have the problem of attracting people who want to use it because they've been banned from other services.
- it makes it easier to raise capital by claiming that what you are doing involves crypto, because then you get crypto-type valuations
- you can get money from people who want to speculate
The negative is a lot of the TLDs sold on Handshake were sold to early interested parties, many of which were speculators. Unfortunately, other than an ICANN run solution, I can't think of a way to solve this since you need critical mass to make it fair, but can't get critical mass without having everything running.
Maybe they should have restricted the character length of the TLDs that were available to be auctioned at any given time based on the number of mined coins so more valuable TLDs wouldn't come available until, ideally, more people were onboarded to the service. Not sure there's a great solution there.
It, uh, didn't inspire a lot of confidence.
> Other way round: transferring value to yourself is the only use case.
Everyone needs money. These tho claims are contradictory. If by creating tokens you can transfer value to yourself, it is clear use case and thats why people will keep creating tokens.
And that's because there's a huge fundamental cost to trustlessness, decentralization and permissionlessness that substantially no project actually benefits from.
Start with coil.com what they do it not possible with the financial system. They enable users to stream money to content creator in real time with fractions of cents per second. A central system would not make any sense. It must be p2p and there must be a ledger to "settle the transactions"
Its not impossible to make it central it just not lucrative in any way. But if the middlemen is removed it doesn't have to be lucrative for that middlemen anymore and it turns out to be almost free because you just need to send p2p data packages to stream money.
Its called interledger protocol (ILP) its not a blockchain its a protocol but like I said above you need to settle somehow and which bank or financial system lets you settle fractions of cents? No one because there is no money to be made from this so a system that does not generate money for the owner (a decentral system) works best.
Correct.
> Start with coil.com what they do it not possible with the financial system. They enable users to stream money to content creator in real time with fractions of cents per second. A central system would not make any sense. It must be p2p and there must be a ledger to "settle the transactions"
Any wallet could offer the same thing. PayPal could offer it. But they don't because nobody wants micropayments. Nobody's ever actually wanted micropayments, it's something they think they do, but in reality, they do not. This comes up from time to time. One of the crypto folks actually wrote a really good paper on it, I'll dig it up.
You just build up the balance until it's over $1 and ACH/RTP it. Those transaction methods cost $0.0033 in bulk.
Further, this is just revisiting whether people are willing to pay for content online. They are not. They would rather be subjected to ads and not pay anything.
source: i helped build some.
I’m sorry, what? Genuinely curious about what the use case is here, I’ve never heard of this before. I pay based on the amount of time I consume?
However, my own investment thesis is that the "crypto" market is ultimately destined to march towards that useful and unprofitable outcome, kicking and screaming the whole way, by dint of the long-term market survivors being the civically oriented perennials. But this is a long journey, maybe another decade or two in the making(a epochal shift in tech). It will continue to have ups and downs.
Ethereum is another one to look more into. Smart contracts are doing things that no classical solution has ever done. Have you done a deep dive on how the technology of Bitcoin or Ethereum actually work?
FWIW, I think plenty of the altcoin tokens are garbage, but some of the top players, like Bitcoin and Ethereum, are doing things that classical solutions simply do not allow today.
How does Bitcoin solve inequality?
How does Bitcoin solve world hunger?
How does Bitcoin solve disease?
Bitcoin — and cryptocurrencies more broadly — do none of those things, with only one notable exception. Bitcoin — being a global currency of fixed supply — stands to usher in a global deflationary economic system. Investors in a deflationary environment have little incentive to invest in the future, and consumers have little incentive to spend. These two things could grind the caustic consumerism destroying our planet’s natural ecosystems to a halt. However, there’s room for interpretation even here; many humans would likely not trade off their own survivability for that of the planet’s natural ecosystems.
All of the hullaballoo about “Defi” and Ethereum only amounts to a Wall Street reskin, i.e. better high brow gambling. This does nothing for humanity either. Very innovative (!), lots of money being made, nicely exascerbating inequality of course. But achieves nothing.
(The S&P is actually down since 1970 as measured in gold [1]. Wall St is a carnival, and defi is just that carnival, squared.)
[1]: https://www.longtermtrends.net/stocks-vs-gold-comparison/
It hurts man. Market cap is not how much money is stored.
Have a read https://coil.com/p/XRPFax/Understanding-the-Crypto-Market-Ca...
Mind helping me with my assumptions??
From what I see, the classical solutions assume the central authority will always exist and provide its services at reasonable prices, that the authority will be benevolent and just, and the central authority is usually single purpose.
Regarding survival, crypto space has a similar assumption that at least some people will run nodes - but I like it's robustness to being 'killed off' because only a few people need to participate in mining or validating.
Regarding benevolence, I think there are plenty of examples of hostility towards users in the payments space specifically.
Regarding single purpose, blockchains are fairly interesting as they allow for any purpose that's signed with the participating parties. Which is a wildly open means of coordination amongst groups -- which is also why blockchains look a lot like currency at outset, because currencies have been the tool for eons to coordinate human efforts.
But looking at it closer, a lot of the world runs on IFFT logic, which seems ripe for smart contracts - the only issue is the interoperability between traditional world and blockchain world to become like Daniel Suarez's Dameon.
The following
> trustlessness, decentralization and permissionlessness
Are better results.
But I do admit, that they come at _performance_ trade-offs.
For example PeakD.com inflates hive to give content creators tips based on likes.
Edit: I thought this was legitimate reasoning behind having your own token. I don't mean it in an inflammatory way. Please explain why you disagree.
Because you don't need to create a token at all to tip creators, inflationary or otherwise.
If you want to use crypto, just use an existing blockchain. Or don't use crypto and just create a centralized market that pays out at certain thresholds. Blockchain solutions aren't actually cheaper than centralized solutions, they just hide all of the costs elsewhere in transaction fees and mining payouts.
The only reason to create an all-new token is to have something to sell to people under the guise of enabling value. It was a bad trick when car washes sold car wash tokens instead of letting you pay for car washes directly, and it's a bad trick when crypto companies make you buy their tokens instead of just buying the service directly.
But if you don't do it through inflationary means, then consumers have to actually send tips and or have accounts. (for better or worse)
Inflation is a nice way to build incentives into the currency's structure. Further, Hive has no transaction fees as that's funded via inflation as well.
I do like the idea of a streaming value for value service wherein I have a wallet that I top up from time to time, but there are many models that are viable here.
BTW Coil.com pays content creators based on user interaction. Its however not self printed money its form actual user who want to support content creator rather than ad-companies. Ofc coil itself runs on funding money like any other startup nothing wrong with that.
Also a project can ask the team behind the DLT they want to use and possibly get some of their reserves. Its in their interest that the DLT is used for something. Actual devs who build something are worth way more than the thousands of people who just buy something because Elon Musk tweets about it.
And btw at the same time a dev can still bet on price gains or the token they use. I see no moral problem with that. If your product actually creates demand that moves the price up and you bet on that you own it.
That said I do prefer the Coil.com model as I love crowd funded ad free media content, and I _do_ pay for it. : )
^ This is a bit silly of a counterexample given that these 3 companies are all able to exist from the significant XRP investments from Ripple.
> You dont need a token. No, really you dont. Your tokens only use case is likely to transfer value
That's rather untrue. Token use cases have proliferated through the advent of DeFi (decentralized finance). This would be a more accurate take during the 2017 ICO bubble but the space has matured a great deal. There are valid use cases now such as governance, fee sharing, derivatives, etc.
> But you get the point, every DLT that actually works in a useful way should have people building on top - if not its probably garbage tech)
This communicates OP's lack of familiarity with the crypto space. A vast majority of the tokens launched today are launched on top of the Ethereum blockchain. They're not trying to create better tokens for the transfer of value, they're trying to create tokens to help manage decentralized financial services. They're not even DLTs, they're smart contract applications.
It's rather easy to mock the crypto space and have an oversimplified perspective like this, most people will nod along. However, it's a bit sad to see people on a forum like this make such charged statements oversimplifying the work of others as "garbage tech."
>"if it's all crypto then you have no KYC obligations"
Yes, its not that simple but this thread is not legal advice anyway
I think it would be a very risky bet to assume this will remain the state long term. It's not even the state now, overall.
Similarly:
> The DEX as as its name says is decentral, they can not control it.
It is possible to construct situations where a business is not technically capable of meeting its legal obligations. The usual solution to this is that the business changes, not the obligation.
No consumers want to have to deal with tokens and blockchain to interact with a company.
Consumers will always do what's easiest and cheapest. Blockchain solutions are inherently more difficult, more expensive, and more risky (for the consumer) than just breaking out your credit card and getting paid 2% cashback to spend your money.
From what I gather no one gives a shit, and their attitude seems to be we can buy off anyone who challenges us. The irony is the same people shaking me down for Bitcoin in exchange for an invitation to the marketplace/inner circle successfully have collectively called for for banning/suspending of accounts from various NFT marketplaces openly on Twitter.
Anyone here in media want to do a story?
> 10. There's actually a good chance that there's not a single person in your entire state or country that knows how to do your taxes.
And this is because your entire business model is to get around laws that were put in place ON PURPOSE.
Take anonymous money transfers for any amounts. This is why KYC/AML laws exist.
If someone could show how a cryptocurrency with anonymous features can follow KYC/AML laws, I'm all ears.
Begging for regulatory clarity makes it seems one-sided. It seems very clear to me that the dream the cryptocurrency companies are trying to sell is fundamentally incompatible with the intent of the regulation, even if not yet its text.
What can they be left with afterwards? We'll see, but it won't be the vision they've sold.
> Nobody wants to invest millions into something that may or may not end up being designated as illegal.
The bitcoin blockchain has child porn on it. And BTC is explicitly designed to break KYC/AML laws. Yet people invest.
Zcash has done a lot of work on this. https://z.cash/compliance/
There are really dumb laws that you need a powerful defense or deterrent against.
The biggest problem is that you cant talk about them, or even share the deterrents, because it makes you a target for the regulators if you do. Its actually better that the regulators simply know you have a lawyer, and that they have no idea what your legal strategy is. In finance, ignorance of the law is an excuse (“scienter”), they codified the law specifically that way for themselves, and so giving any knowledge about the law undermines the defense of your own actions, and being able to say “my lawyer made me do it” is an even better defense.
This also means that each and every project has to recreate the legal guidance, until Congress explicitly makes a safe harbor route a default regulatory regime.
Corporate Securities lawyers know it, exchanges and service providers know it, they carved out a niche for themselves to provide this legal service and it costs 6 figures easily. It is not a perfect defense.
Many crypto project issuers are victims in this regard, with everyone onboard with this racket, they cant even talk to the SEC about what’s wrong.
Taxes aren't that hard but most providers overthink the word “crypto” when they hear it and confuse themselves.
So the aim is to break the intent of the law. Laws that were put there on purpose.
So I really don't understand what you mean by "nah". It's exactly that. Company sees the law, says "that's dumb, I'm going to break that but in a complicated way" and then does breaks it using what they consider a loophole.
"Nah"? No, you exactly agree.
> In finance, ignorance of the law is an excuse
Yet you can also get convicted for tax fraud without having intent.
And the flip side of what you said is also that (depending on jurisdiction) it can be illegal to do something legal, if your motive was to get around the intent of the law. Using loopholes can be illegal, even though the act is legal.
> This also means that each and every project has to recreate the legal guidance, until Congress explicitly makes a safe harbor route a default regulatory regime.
This is just delusional. I think you forgot who has the guns.
So basically crypto projects dont mind securities laws, they do mind that the securities laws have lots of unnecessary contigencies added to them that makes it impossible to couple with utility.
If a crypto token actually was a registered security, then nobody could list it because they arent broker dealers. All the partnership projects could not be because the partner would have to be a broker dealer. There would be zero framework to potentially add utility at all, if they complied with laws that didn't consider issued assets existing peer to peer outside of any walled garden. Alternatively, it can exist as a consumer product under the consumer framework, no different than the secondary market for Nike shoes, and thats what people do. Upon asking “how does Nike do it? People can walk in the shoes but many people buy their shoes with an expectation of profit” my securities attorney told me that Nike probably has securities legal opinions too.
Congress and commissioners at the SEC are warm to helping this, you are going to have to retire your talking points to the last decade as the grownups are building and some are representatives.
> they do mind that the securities laws have lots of unnecessary contigencies added to them
Specifically what? What laws have what aspects, and more importantly why were they put in place, and why should they not apply to cryptocurrencies (but to other things?).
You're talking as if laws sprung from nature, somehow.
A requirement which did not spring from nature but has no usefulness for fungible consumer products and simply hasn’t been revisited
Without clarity from regulators it is impossible to simultaneously comply with FTC consumer regulations and SEC investor regulations as they are incompatible regulatory regimes which alter how things are marketed, promoted, traded and accounted for.
And actually complying with SEC regulations means there is no where to trade it. There is a joke amongst securities attorneys about the Howey Test which is the premier securities framework from the Supreme Court “if Howey wanted to comply and register properly as a security how would he? Well he couldn't because they’re fucking oranges”. And that reality exists for digital assets today, yet the market is there and the risk:reward is extremely favorable.
But what you might be missing from trying to nitpick specific regulations: The SEC will never ever ever fulfill its mission from Congress of protecting crypto asset investors by sanctioning crypto asset issuers, it will only hurt the investors in the current reality. Whatever it does in the equities space is not applicable here as the SEC's arbitrary adversarial actions provide the opposite of confidence in the crypto market and facilitating capital formation. It understands that part too which is a contributing factor for why its actions are limited pending modern direction from the legislative branch, and its prudent that you understand that as well.
[1] https://twitter.com/VitalikButerin/status/127395790524347596...
Besides, if you read the whole thread you'd know he's acknowledging that if we could simulate QC classically, then we'd be able to have more efficient classical search algorithms. It's an if that's likely impossible at scale but not, by definition, impossible.
If the statement made by Vitalik "There's no proof that efficient classical simulation of QC is impossible" is indeed the case, then it's the linked blogpost that has discredited itself mathematically by treating this as "breaking mathematics" or a "mathematical impossibility". More like groundbreaking surprise, but there's a big difference between "unlikely" and "proven to be impossible" mathematically speaking.
I take this tweet as Vitalik saying that a similar thing could happen for mining (or general search), and while it would be surprising, it doesn't seem like it is impossible.
"Quantum computing (QC) is a flexible model of computation and there are many physical means of implementing it. One obvious means of implementation is by classical simulation. In other words, performing QC by running ‘quantum software’ on conventional hardware."
[1] https://web.archive.org/web/20131005014920/http://noospheer....
There is just as massive of a graveyard of dead chains because the dev teams could not exchange time for food and shelter.
There is a more quantifiable trend of market tolerance in this asset class for what founders can earn.
You have an extremely antiquated view of what that can be, the impractical charity developer building a product that the communities adores and spawns into a very active network. That pretty much never happens as the dev needs to use their time to exchange for food and shelter and nobody else picks up the baton.
Following that, devs attempted small dev taxes of 1-2%, the market barely tolerated that for some years, and it also wasn't good enough to fund development
Following that the market tolerated larger preallocations of 30%.
Then it tolerated fund raises where developers kept funds raised and large preallocations, similar to equities.
Then it tolerated even more where low float assets are now commonplace, with developers keeping upwards of 99% of the asset created, keeping the funds collected, and have unlimited issuance capabilities.
But there is no hard line in the sand, and not everyone has an uncomfortable relationship with money such that arbitrary thresholds determine what a founder “deserves”. It is obvious that being able to actually pay a dev team has done much more for the speed of development in this space than harping on about some irrelevant ideology. You might find it surprising (okay now I am being facetious, but it still has to be said to highlight the inanity of your last decade view), but the entire industrial era has the same aspect based on paying workers closer to the value they provide at the time and thats the only model proven to work in an economy.
But don't you wish you bought Amazon stock right after IPO?
now, as was then, people are investing in tech they don't understand and in some cases tech that may not even be buildable. :x
Want your token to be traded on an exchange? You'll pay a fee, you'll do all the integration legwork for them pro bono, and then they'll skim money off of all the trades on your token in perpetuity.
uniswap.org
Using the network is not "skimming" transactions.
> Using the network is not "skimming" transactions.
Sure it is. Users are paying a different token to miners (not me) to use my app's token. Tell me, if users are given the choice between transacting in both ETH and the ERC-20, or transacting only in an ERC-20, would they ever willingly do the former?
EDIT: Also, sure, why not own the exchange too if you can swing it? Less middlemen taking a cut from your revenue.
Yes, but thats why you collect a ton of other people’s money in token sale revenue to begin with!
You have larger than normal overhead costs, but still larger than normal earnings
These are just collateralized loans that are automated. Nobody here would touch your businesses “in the real world” because it would take like 90 days to get any liquidity with those processes, compared to 15 seconds (1 block). There is nothing mysterious about a collateralized loan with a conservative loan to value ratio. The first thing you got wrong is that most services have a low LTV not 100%. Usually between 25-55%. Businesses in the real world do touch that.
The other thing you’re missing is who what and why. These aren't businesses these are basically self-replicating robot toll booths who are doing what lending businesses also try to do: pool liquidity and in some cases reinvest that greater liquidity.
When borrowers deposit collateral they are typically passing through a smart contract that then adds their deposit to a liquidity pool that the market can access. It requires confidence in these smart contracts that the collateral will remain available but that confidence is generally there. The market typically taps these liquidity pools for easier trading with lower spreads at larger amounts or for the repo market (flash loans). Lenders are repaid usually in the asset they lent, as well as a project’s token which amplifies yield. The risk isnt contigent on the projects token existing or going up, which I think you missed. For some platforms that is true but that is usually yield farming, but if you think a market need is unfulfilled just launch another version.
Typically earning or otherwise having enough of the project’s token allows people to vote on controlling some parameters, such as the interest rates provided or augmented by how much of the project token or the use of which liquidity pools or eligible assets in the system.
Back to the borrowers and lenders, yeah they can get and give personal loans for discretionary spending at market provided interest rates even in stablecoins.
And people do this in traditional markets - it's known as "asset backed lending" or margin trading. Both things that my investment account allow me to do.
Example 1) lend USDC for 25% interest on Venus.io. Borrow DOT at 3-4% interest. Stake DOT for 12% interest and collect the difference.
Example 2) Lend USDC for 25% at Venus.io. Borrow BUSD for 12% interest. Trade the BUSD for USDC 1:1. Lend that USDC to borrow more BUSD. Repeat until you max out you reserve ratio.
Venus is a fork of Compound and MakerDao.
Thank you for reaffirming my point! The purpose of defi is to re-distribute dollars from people buying in to people cashing out, while providing literally no other goods or services. It's not like people want these tokens for other purposes -- you buy them so you can sell them to subsequent participants.
Despite the deceptive machinations of defi, the act of selling out leaves a paper trail that exposes you to liability for income taxes, capital gains taxes, and (if you wrote the token code) securities regulations. But I have some good news: if you live in the US, you at least have until May 17 to file your quarterly estimated taxes.
Taleb got profiled in the New Yorker, his Black Swan book became popular, and he has rode that and Twitter ever since. I highly recommend people see him for what he is - a public figure that is a bullshitter like anyone else - at least until he shows proof that he is some sort of investor oracle. He has actively sued people who revealed how much money his prior fund lost, as those documents are floating around but he attacks anyone who publicly reveals them.
Mark Spitznagel, a cofounder of Empirica (Taleb's old fund), went on to start Universa which did pretty well with similar theories (tail-risk strategies and insurance via options against extreme market risk) in both the 2008-2009 period and last year, when they booked a huge return. So there's some evidence that the theories work to produce uncorrelated (or negatively correlated) returns that outperform the market[1].
[1]: Universa's flagship "Black Swan Protection Protocol" fund has produced a mean annual return on invested capital of 76% since the firm was created in 2008. https://www.forbes.com/sites/antoinegara/2020/04/13/how-a-go...
I had always understood a ponzi as being something paid out by later investors, and where you had a plausible reason to believe in increase in value.
Here the plausible reason is “bitcoin will take over the financial system and everyone will need it” or “bitcoin will be the new store of value and everyone will want it”. In either event payout necessarily comes from later investors.
Ponzi appears to be an income-producing asset, but the income is paid out from the principal.
Helium started as a traditional centralized IoT project, realized that centralization was a limiting factor, then joked about turning it into a blockchain application. Now it is over $1.5bn market cap and provides a real-world utility.
Exchanges are pay-to-play. It feels bad to interact with them to get listed.
Lots and lots of scammers.
There is still so much untapped value in some possible use-cases, but honestly too many get-rich schemes.
Launching a new layer 1 protocol is a tremendous amount of development effort and I think underestimated by most.
Security is hard.
Scammers/hackers go after all project members personally. You probably aren't prepared for any kind of success.
5 years ago crypto wasn't mainstream. Fast forward to today, and when you say you're in crypto, everyone thinks you're a billionaire.
1.) Decentralization will come for sure (DAO LLC), but no matter what, there is still a Foundation of some kind.
2.) Community depends on utility. There are some amazing strong communities, but is in direct proportoin to the utility the token really brings. Otherwise, just pump and dumpers.
3.) I don't think it is 100% possible to truly decentralize governance. But people are trying.
4.) I don't believe this is true for everything. There are pump and dumpers, but many of the decent tokens today need to focus on utility, the tokens for speculation only will always be manipulated.
5.) I think the VC landscape has changed and maybe a more piling on, but couple of years ago, VCs wouldn't touch crypto and the VCs focusing on crypto (Multicoin, Polychain, etc) are very good and extremely smart.
6.) Time makes no difference. Since it is decentralized it isn't like you have a support team fielding issues. You can't fix anything in a moment's notice. Releases take careful planning and careful testing.
7.) Again this assumes there is no utility in the token. But he is right you can't talk about token price or speculation. But underneath it all you hope the token price goes up.
8.) 100% true. You can't build it and they will just come. It requires real marketing and PR. Most importantly branding. People are looking for value and community around your token. But the early adopters are FOMO speculators.
9.) Yes, legal fees are very high. Could be 7 figures.
10.) Taxes are becoming more clear. Cost basis and capital gains. But a lot depends on how you acquired your token.
11.) Basically, people will constantly claim your are scammers. Literally day and night. And people will spam free bitcoin offers to all your telegram and discord users. Every day and every night.
12.) I think insider trading is unbounded in crypto currency, but that being said a.) its still illegal and not sure founders would be participating in this, b.) its still unclear what really motivates the market. Crypto is heavily retail and the chatter as always be trolls, scammers and naysayers. But also fomo'ers. So hard to say how much insider trading will capitalize on information versus exchanges that can manipulate the volume data. I think whales can manipulate far better than insider trading.
13.) hard to say are we talking a stock market bear market or a crypto bear market?
14.) There are several tokens that have real utility and likely you aren't questioning your lifes' decisions. But lots of sh*tcoin maybe you are. But blockchain (layer 1) developers are still incredibly hard to find--so think they can pick whatever they want to work on.
15.) Again, utility (real use case) or pure speculation play. There are tons of garbage uses of blockchain that are a super poor fit. Hopefully, you don't work for one of those (does supplychain really need to be on a blockchain?)
16.) Unsure if that is true. I think most projects get a halo effect from the success of bitcoin. Most new tokens should be real utility instead of trying to replace bitcoin.
And the exchanges really are a problem and are still a racket.
It is so great that Uniswap and their style of autonomous liquidity pool creating has taken over, the market was tired of that other bullshit.
Even the most reputable custodial exchanges are a total racket! See Coinbase’s settlement with the CFTC a few weeks back for an example.
The challenges to fixing it are very high, I agree with Gary Gensler’s (SEC chair, former CFTC chair) comments to Congress today about a new regulatory framework for custodial crypto exchanges.
For one: Projects cant talk about exchanges because one part of being considered an unregistered security is by providing an expectation of liquidity!
But communities do have an expectation of liquidity and so does everyone. Otherwise they will attack the founders personally, forever!
The exchanges know this and create extremely toxic relationships, that any complaint from a founder will cause the exchange to completely ruin and slander the project and also delist it, validating any detractors existing beliefs!
Complete racket because the regulators are already taking an adversarial stance and cant even get any insider to talk to them because they’ll go after the insider!
If you arent aware, uniswap (AMMs) and yield fixes this, as communities are providing all of the liquidity and listing of the token for exchange. So honestly the impossible regulatory environment is really being a catalyst for innovation.
That is interesting what you said about the shadiness of centralized exchanges. I wasn't aware of that. Maybe a more clear regulatory framework will help.
However, it seems like whenever more regulation is put upon traditional markets, folks just find a loophole in it and it makes the situation worse for retail investors (best price / HFT comes to mind, but maybe I just took the Flash Boys book too seriously). Anyway, I'm not sure what the answer is there. Curious if you have more thoughts on this.
People that want alpha learn that interface, the end.
If you want limit orders and big ole' chart taking 3/4ths of the screen so that you can pretend the Bollinger bands are suggesting a breakout, then you have to use third party GUIs, it is all possible and there are plenty of github projects about it. Uniswap V3 makes that even easier.
HFTs already exist here, they provide a service mostly liquidity depth. Crypto exchanges are fairly unique in that they operate many conflicting roles when in other markets they would have fiduciary duties.
Anyway those third party GUIs sound interesting.
I also figured there already was HFTs on crypto, but good to know.
We'll see what happens with potential regulation. I do hope the US understands that not stifling crypto innovation would support them in having companies and leaders in this upcoming field. I do think crypto is in it's early stages at the moment and mainstream adoption to me is having crypto adoption at the level of say the US stock market.
New people to crypto just follow their favorite youtuber
The ux will improve even more over time
The commerce applications on the other side like Uniswap are understood pretty quickly as its just market orders
But there is tons of room for innovation in making it more accessible
When I see the volume, liquidity, value on chain, and all times lows of crypto stored in exchanges, to me that means its easy enough for people to figure it out from their favorite influencer’s bite sized video
Why did you need to create a new, unique token anyway?
How much of that market cap would you estimate is used for utility versus simply being held for speculation?
I'm still wondering how no impactful hacking occured to this day at major exchanges or even the major blockchains. By now it's probably a top-level target worldwide.
I do think the fact that there hasn't been a successful attack on the Bitcoin network is an example of how resilient it is. Safely securing $1 trillion in value on a decentralized network that hasn't been hacked in over a decade of operation, when as you said, it's probably a top-level target, is pretty amazing.
[1] https://www.cnbc.com/2019/05/08/binance-bitcoin-hack-over-40...
[2] https://www.gemini.com/cryptopedia/the-dao-hack-makerdao
I think what most people don't realize is how much crypto has changed since 2017, mainly through Ethereum and the concept of smart contracts. The idea of running (immutable) functions on a decentralized network combined with transaction of value has so many interesting applications, that I believe we haven't even scratched the surface of what's possible.
Shameless plug: We're in the middle of validating/refining an idea for a tokenized e-commerce platform. The main idea is that a tokenized platform can shift the incentives for all actors to produce drastically different outcomes. So we're more about embracing the game-theoretical side of crypto than the technical side.
Curious what you guys think, any feedback is welcome.
But, it must be worse to deal with when you have profit as a motivator rather than social benefit.
Sounds like a recipe for burn-out and a risk to mental health.
Ironically this post happens near top as well lol http://paulgraham.com/newideas.html
Altcoin promoters quickly attached themselves to the term for financially motivated reasons, unsurprisingly. Notably it has little to no meme/entertainment value: its value is strictly limited to psychological warfare, and is rooted in sophistry.
That's my personal opinion but ya'll seem to like that over here on the 'ol HN (aka the new slashdot)
This has nothing to do with crypto it is yet another thread about scam energy-wasting fake money.
The idea of cryptocurrency is interesting, but the idea of having no back at all makes no sense. Wasting energy is not creating wealth.
Just pointing out that both Doge and BTC are proof of work and consume energy in similar style with the mining process.
Not sure I would count on that prediction.
I mean is gme going to surpass apple?
They’re crypto based but unfortunately (/s) no token
Plus there is the bisq project, a peer-to-peer bitcoin/fiat exchange that has decentralized their governance using a token that's colored bitcoin, rather than building on Ethereum.
Regarding the energy consumption of monetary networks, what's the real cost of the petrodollar system? Don't forget to include the US military costs fighting wars to force oil-producing nations to sell oil denominated in dollars, as well as all the banking, financial advisors, and physical security (Brinks) that prop up the central banking/fiat monetary standards.
What we want is to basically transfer work/resource tokens and make it resistant against depreciation. Lets add a simplistic example I help someone build a house and receive a fair token for that work. When I need to build a house 20 years later I pass that token, it retains the value such that someone accepts it to do the work I did 20 years prior. Because we’re mentally stuck into an outdated economic model that served ok prior to the digital age our imaginations aren’t creative enough move in the right direction. My thinking is that a direction will emerge, let’s hope it’s as far away from the possibility you talk about.
Yes, I think you have the right idea. This is a credit based system, which, I think is fairer because anyone can issue credit denominated in some numeraire and it holds its value over time as long as the issuer can be trusted to “redeem” the credit. The issue with this system is that bootstrapping it is difficult and it’s quite complicated because everyone now needs to become a credit risk/reputation expert!
> Ethereum could be extremely valuable but that its value is currently hurt by the speculation on Ether making transactions far too costly
FYI the price of ETH does not affect the transaction costs. The fee market is independent. There's solutions to this in place and more being worked on though. The 3 biggest contributors will be EIP 1559 which is meant to level out the fees and make them more predictable, L2 rollups which scale through sidechains that have the each of their blocks confirmed on Ethereum's L1 with proofs, and sharding of L1. Ethereum is currently in a growing pains phase as these L2 options gain more traction/adoption, UX for them improves, and all activity migrates there. The end goal is for a majority of interaction to occur on L2 with L1 being used mainly for a settlement layer.
It's ostensibly a BTC podcast, but it's _really_ about much more including second tier networks, altcoin tech, and individual autonomy.
Otherwise, getting involved in the code itself does seem to be the only avenue I've found for real learning.
There's an O'Reilly book that has you build a blockchain from scratch if you're interested.
I'd welcome other suggestions.
Oh, also Tezos has most of Ethereum's features, but is already Proof of Stake.
Nowadays I usually go to /r/cryptocurrency/new for the firehose. I do not aim to read everything, just check in and take some notes. What tends to happen on that subreddit is that some really great posts get made but never hit frontpage because they're crowded out by useless memetic content. But you can take individual great posts and turn those into leads by doing some additional legwork. I don't usually talk to those users(I do not want to read comment thread replies and will completely ignore my Reddit inbox, instead I will monitor the thread if it interests me) but I will sometimes browse their post history.
Lots of grand ideas that went nowhere because they are entirely unrealistic and divorced from reality.
PeakD.com
Or a digital currency with the privacy and fungibility of cash.
GetMonero.org
Or an ad free streaming platform.
Odysee.com
If you're trying to start an honest project in this space, you really need to ask yourself why you would put yourself in a situation where you are the only honest person in a room full of scammers.
This is one reason why I pulled the plug on my startup in the sphere. In the best case you're disadvantaged by all the scammers and liers: they can make promises, cut corners, rip investors where you are being careful, covering all bases, and trying to put a real case and working sofware out. In the worst case, your honesty is helping the scammers by adding credibility to their case.
Plus, you run the risk of either getting exploited yourself by the scammers, or feeling the pressure to act more dishonestly to keep up.