It's an interesting time in the crypto world. Bitcoin dominance has been plummeting in the past few months. In January, Bitcoin made up 87% of all crypto currency. Today it's 60%. Most of the movement has been to ETH, but all of the alt-coins have benefited from the movement. Alt-coins now have a 15b market cap!
You stated Bitcoin dominance plummeted. My observation is Bitcoin's dominance has increased, by way of it's increase in market cap compared to the fiat by which it is measured, US dollars. Bitcoin's overall value, like any startup or company, is determined by far more than it's comparative value to all other cryptocurrencies, who's numbers are increasing with Bitcoin's value. It's like saying, because new startups are being formed at an increasing rate to write mobile apps, Apple's "dominance" in the market is falling. That would be a flawed argument with Apple, and it's a flawed argument with Bitcoin.
That is especially true given Ethereum doesn't have a viable use-case anyone is using it for right now, and most of the trading is simply speculation of future value, which isn't really value, or a right to "dominance", whatever that means when applied to speculation.
And yes, people can cherry pick numbers to rationalize their arguments, and then vote down people who they "prove" to be "wrong" when the person is just asking to clarify what something means because there is CLEARLY more going on here than what meets the eye. I'm growing bored of the HN audience's dogma.
Rather than paying the high fees of bitcoin, people are making their transactions in other currencies instead. Unsurprisingly, the currencies that allow more transactions are more economically useful, so their value edges up.
For all of Ethereum's features, it has a minimal amount of moderate value use-cases in production. I'm not talking about wishful thinking of future use cases here. Ethereum has yet to find a killer use case to take it mainstream. Although the DAO was suppose to be the big use case, all that did was expose the fact the developers and leaders of the project are willing to fork the chain to protect the early investors.
Frankly, it might as well be a Silicon Valley startup, except it doesn't have to justify having good use-cases or adoption. Just keep the hype machine going and it'll do well. If hype trends off, without finding a killer use-case, well, I don't suppose it will matter much.
At the moment their use-case is "selling blockchain" to enterprise. Plus ease of creating even more altcoins to ICO so some people can make quick money without any real product.
It's even more unforunate that there are people from Ethereum Foundation training people just to make succesful ICOs (see the recent Gnosis debacle), but that's the price of having a wild west so innovation can grow, it attracts "sketchy" characters which unfortunatelly distract from real world breakthroughs. I'm just glad that we still have a lot of genuine people focusing on work that will push the cryptocurrency world forward.
I spent the weekend researching Ethereum and speculating on why people are investing in Ethereum (as opposed to other altcoins). I've come to the conclusion that there are two major reasons:
1) Momentum. Ethereum is (by many measures) the top performing alt coin. It's the most likely to be accepted on random websites, companies are investing in it and it looks like it has interesting potential.
People see that and jump on, hoping the momentum will continue.
2) Stability. Crypto-nerds like you and me look at DAO and shake our heads, "reverting transactions goes against the whole concept". But to investors it looks like stability, which is attractive to them. There is now the implication that the developers will step in and fix any major mistakes. It's not just ill-defined smart contracts, theoretically the developers could intervene in cases of stolen ETH from wallets of major exchanges, or anything really which could threaten the stability of the currency as a whole.
I doubt any sane investor would think like point (1).
I would follow ETH only because it's backed by the original developers. The reversion happened only because member(s) of Ethereum Foundation personally invested in DAO, so they easily could and did push hard at the root (devs). Even with all that, there's no certainty that another big mistake will be reverted by devs' will or even be technically possible having to deal with Turing completeness and zk-SNARKs "soon (TM)".
> I would follow ETH only because it's backed by the original developers. The reversion happened only because member(s) of Ethereum Foundation personally invested in DAO, so they easily could and did push hard at the root (devs).
The much bigger problem was that they didn't want anybody to control 14% of all ETH with the switch of PoS on the horizon. This was IMO the most pressing issue. That people got their ETH back (well, those who didn't panic sell) was a nice side-effect which convinced people to follow the ETH chain.
> Even with all that, there's no certainty that another big mistake will be reverted by devs' will or even be technically possible having to deal with Turing completeness and zk-SNARKs "soon (TM)".
Yeah, only because of some quirks on how TheDAO is implemented, it could be resolved that way. In slightly different circumstances, a fix won't be possible.
No sane investor is going to invest in Ethereum because that's not how Ethereum or its derivatives raise capital. The way they raise capital is by taking individual's existing irrational trust (fiat) and exchanging it for what appears to be rational computationally driven trust. Except nobody is using that computed trust for anything worthwhile (a use-case), but then they (the Ethereum fans) all spout that its "killer use-case" is trusted transactions.
This is, at best, a chicken and the egg problem, given trust is built over time by most cultures and people don't trust things they don't understand, even if those things are rational. Saying it's rational doesn't convince the group aggregate mentality (the thing that defines a killer use-case) so we sit here as individuals speculating about how great is is and they (the Ethereum group aggregate) sit here trying to convince us how great it is. By actual use adoption standards, used by VC firms to establish value, it has none.
It already has a killer use case: Cheap, fast transactions. Regular, boring, "dumb" transactions like in Bitcoin, but with an average of seconds instead of 10+ minutes to first confirmation, much lower fees, no congestion, and no civil war.
Given that there is little hope for a quick resolution of the block size civil war in Bitcoin, I'm not surprised that people are switching to alternatives.
That's the thing - as far as I can see, there was a disagreement, they forked, both forks peacefully coexist and hold significant value (ETC is worth more today than it was before the fork).
There is no civil war with DDoS attacks, mud-slinging, exploiting vulnerabilities in clients to crash the clients of the 'wrong' side, not even a "majority hash power kills weaker chain".
There's not much code difference for now (when/if ETH pushes the PoS Casper change that'll change).
As for civil war, see a complaint[1] of an ETH developer to SEC for an Ethereum Classic Trust. I don't follow enough for other example, but I doubt there's no hostility.
Features are not use cases, contrary to popular belief. A killer use case is where everyone uses the technology, not where the technology serves a use for all people. Speculation on the value of Ethereum is irrational, at best, even if it has a feature people think others will use in the future.
ETH is often exchanged paired with BTC, not USD. As the price of BTC has gone up, so has the USD price. By that basis, it spent much of the past month down about 20% and only recently got back to where it was in late March.
This does not make sense, you always need to quantify the price of something in some unit to compare it to itself in the past. BTC, USD, SDR, Kg of Gold, you choose.
For stock, a percentage is typically given, because it doesn't matter what dollar amount one arbitrary unit gained. What matters much more is "if I had invested $1000, how much is it now". Saying that it gained $30 is meaningless without knowing the previous value - if Bitcoin gains or loses $30, nobody cares, if Ethereum gains $30, that's over 50% gain in value.
The only people that care are those that hold cryptocurrencies. I wonder what that looks like in terms of percent of world's population. I bet it is absolutely tiny... So we have the same crappy situation in cryptocurrency land that we have in fiat land. Wealth concentration.
Meh, I am going to stick with the stuff that is backed by floating armadas, gigantic planes/bombs/missiles, and Devil Dogs.
29 comments
[ 2.1 ms ] story [ 84.8 ms ] threadhttp://coinmarketcap.com/charts/#btc-percentage
Bitcoin's price is at an all time high. Please clarify what "dominance" means from your perspective.
In the crypto world, BTC dominance refers to the percentage of market cap that is tied up in BTC versus ETH and every other alt-coin.
There's roughly a 36 billion dollar market cap of all crypto currencies right now. 60% of that is in BTC. 40% is in Ethereum, Ripple, Litecoin, etc.
That is especially true given Ethereum doesn't have a viable use-case anyone is using it for right now, and most of the trading is simply speculation of future value, which isn't really value, or a right to "dominance", whatever that means when applied to speculation.
And yes, people can cherry pick numbers to rationalize their arguments, and then vote down people who they "prove" to be "wrong" when the person is just asking to clarify what something means because there is CLEARLY more going on here than what meets the eye. I'm growing bored of the HN audience's dogma.
https://i.imgur.com/7BXFyWX.jpg
Rather than paying the high fees of bitcoin, people are making their transactions in other currencies instead. Unsurprisingly, the currencies that allow more transactions are more economically useful, so their value edges up.
Frankly, it might as well be a Silicon Valley startup, except it doesn't have to justify having good use-cases or adoption. Just keep the hype machine going and it'll do well. If hype trends off, without finding a killer use-case, well, I don't suppose it will matter much.
It's even more unforunate that there are people from Ethereum Foundation training people just to make succesful ICOs (see the recent Gnosis debacle), but that's the price of having a wild west so innovation can grow, it attracts "sketchy" characters which unfortunatelly distract from real world breakthroughs. I'm just glad that we still have a lot of genuine people focusing on work that will push the cryptocurrency world forward.
1) Momentum. Ethereum is (by many measures) the top performing alt coin. It's the most likely to be accepted on random websites, companies are investing in it and it looks like it has interesting potential. People see that and jump on, hoping the momentum will continue.
2) Stability. Crypto-nerds like you and me look at DAO and shake our heads, "reverting transactions goes against the whole concept". But to investors it looks like stability, which is attractive to them. There is now the implication that the developers will step in and fix any major mistakes. It's not just ill-defined smart contracts, theoretically the developers could intervene in cases of stolen ETH from wallets of major exchanges, or anything really which could threaten the stability of the currency as a whole.
I would follow ETH only because it's backed by the original developers. The reversion happened only because member(s) of Ethereum Foundation personally invested in DAO, so they easily could and did push hard at the root (devs). Even with all that, there's no certainty that another big mistake will be reverted by devs' will or even be technically possible having to deal with Turing completeness and zk-SNARKs "soon (TM)".
The much bigger problem was that they didn't want anybody to control 14% of all ETH with the switch of PoS on the horizon. This was IMO the most pressing issue. That people got their ETH back (well, those who didn't panic sell) was a nice side-effect which convinced people to follow the ETH chain.
> Even with all that, there's no certainty that another big mistake will be reverted by devs' will or even be technically possible having to deal with Turing completeness and zk-SNARKs "soon (TM)".
Yeah, only because of some quirks on how TheDAO is implemented, it could be resolved that way. In slightly different circumstances, a fix won't be possible.
This is, at best, a chicken and the egg problem, given trust is built over time by most cultures and people don't trust things they don't understand, even if those things are rational. Saying it's rational doesn't convince the group aggregate mentality (the thing that defines a killer use-case) so we sit here as individuals speculating about how great is is and they (the Ethereum group aggregate) sit here trying to convince us how great it is. By actual use adoption standards, used by VC firms to establish value, it has none.
Given that there is little hope for a quick resolution of the block size civil war in Bitcoin, I'm not surprised that people are switching to alternatives.
erm. ETH vs ETC anyone?
There is no civil war with DDoS attacks, mud-slinging, exploiting vulnerabilities in clients to crash the clients of the 'wrong' side, not even a "majority hash power kills weaker chain".
As for civil war, see a complaint[1] of an ETH developer to SEC for an Ethereum Classic Trust. I don't follow enough for other example, but I doubt there's no hostility.
[1]: https://www.sec.gov/comments/sr-nysearca-2017-06/nysearca201...
Would be a more meaningful title for those who haven't been following the price already.
Meh, I am going to stick with the stuff that is backed by floating armadas, gigantic planes/bombs/missiles, and Devil Dogs.