That is an an underestimation of the technical, financial and social value of distributed ledger technology if Cryptokitties sales is your bubble barometer.
Let's see what's going to happen to finance. The fiat-crypto infrastructure that has been and is continuing to be laid out by multiple varied parties is an indicator for the recurrence of another bull market, especially when the current market cap is compared to the the cash, stocks and commodities that are out there, each kind of which crypto assets are identical to.
The best thing we can hope for is the next bull run to be based on actual use, working products that add benefit and value to market society. And who knows, maybe it'll all even become transformative.
Please enlighten us: what are real-world applications of blockchain technology that provide a benefit to anyone in any sector?
Please remember that there are over 7 billion people in the world that want to potentially use it, so Bitcoin (or similar) are not working as a payment system.
The current real world application is a test to see how money or forms of value can be coordinated among distributed decentralized networks. Just the experimentation is a value and benefit for humanity. One should remove the idea that Bitcoin will be the winner as a payment system. It could be Bitcoin with its Lightning Network implementation, or it could be something better. As it seems scalability is your specific gripe here, there are competing distributed ledger technologies that are working towards or already have solved this to an extent better than Bitcoin. Understand that this goal of scalable, decentralized multi-nodal coordination is not an easy and simple problem, but it is a problem that market participants are working towards, and solutions are necessarily constantly evolving, because is that not what markets do?
I don't think they have to be mainstream enough for you to have actual value.
I run a CBD store and it's extremely hard for CBD companies to get banking without exorbitant fees. For example, it costs ~2.5% for normal companies to process a credit card payment through stripe. For us, it costs >7%. Many of my competitors and suppliers are turning to cryptocurrencies for the lower fees and guaranteed certainty of payment.
The impact of crypto is yet to be fully estimated but it seems as if there isn't any existing system crypto cannot replicate and there are many systems enabled by crypto that existing systems will fail to create.
Are you in the US? I think that's a particular limitation of your country's payment systems, with its over-reliance on credit cards. In most other places you can use payment systems which are less vulnerable to fraud (since they use a push-style system, not pull) and much harder to chargeback.
Cryptocurrencies might have an edge for a while, but don't count on it long-term.
Absolutely. Here in Portugal they don't even appear in the top 3, and in many other EU countries they're not the first. Many of them are developed by the local banking system (like iDEAL[1]), but SEPA transfers are used too, since they're usually free.
So your argument is since not all 7 billion people cannot use it it's not working as a payment system and therefore it does not provide any benefit to anyone in any sector?
No, you didn't comprehend what I said. I said that it doesn't work as a payment system, so they should name something else where it's good at. Can you name another application in any sector?
Payment system: The corresponding blockchain would nearly instantly overload and reach data sizes beyond good and evil for everyone to handle. The result would be middlemen (aka banks) that are able to save the whole blockchain and handle your trust requirements. Today's light wallets require trust as well and every user of those can potentially be fed fraudulent blocks without them noticing.
Gambling: why is that better than a non-blockchain, regulated solution? The results have to come from somewhere, so that is a centralized point of trust you inevitably need. Unless you mean that the odds are decided "fairly" then I question why you would bet your money at a place where you can't trust the odds, or why you don't bet elsewhere where the odds are more in your favor.
Decentralized voting: I don't know why anybody would want that. If you don't control who votes, you end up with rigged votes. Unless you mean that only the block producers (miners) vote, then you will end up in an oligarchy.
Uncensorable Twitter: If by "uncensorable" you mean immutable: nobody sane wants that. Once somebody posts child pornography to the blockchain, you will have to explain to the police why you have child pornography on your computer.
I like how you easily you dismiss any counterpoints or examples.
Even with full 100MB blocks you're only looking at ~5TB of storage for a whole year. This is easily attainable for many people, including myself, today. The point isn't to have everyone run full nodes you know, some trust is acceptable.
The fact is cryptocurrencies work very well as a payment system today.
> then I question why you would bet your money at a place where you can't trust the odds
Obviously here you wouldn't need to trust the odds as they are verifiable.
> I don't know why anybody would want that. If you don't control who votes, you end up with rigged votes.
You can have a voting scheme where you give out unique votes, centrally, which you can then yourself without trust verify that your vote is correctly counted. Why anyone would want that should be clear.
> you mean immutable: nobody sane wants that
Many people would want that. There are of course drawbacks.
You can also store hashes of content which you can store elsewhere which you can verify. Like many torrent sites work.
Because if you don't run a full node you need trust and if you need trust, you can simply use a credit card. This whole crypto currency thing is so stupid because nobody can answer me these very basic questions.
I think the biggest scam in bitcoin is using the motte-and-bailey argument that ”blockchains have real-world use”, and ”already existing bitcoins are worth tens of thousands each”.
The only things you can do with already mined blockchain blocks are selling them, or hoarding them. Their immutability is their biggest selling point, after all.
The biggest scam in Bitcoin has been people with a vested interest in it throwing around price predictions since the beginning, and that being the only media narrative propelled.
If the conversation is about how human society can evolve with this new level and kind of coordination, then we may fare better.
Are you certain you understand blockchains and cryptocurrencies?
Ex: The only things you can do with already mined blockchain blocks are selling them, or hoarding them.
You don't actually do anything with blocks. Blocks contain transaction data for the network, confirmed by miners who play hash games for block rewards. I think you mean the actual coins that come as block rewards, aka Satoshis / Bitcoin.
Are you familiar with decentralization and developing apps on things like Ethereum? Or IPFS?
Are you familiar with the fact that _still_ , after years of hype and hundreads of billions of $ in the system, there is not a single app that has reached mainstream adoption? In fact, interest is fading without any major breakthrough achieved.
I actually do run a {insert random blockchain based hyped decentral protocol here} app and I can see that absolutely nothing has happened or changed during the last year or so.
Cryptocurrencies are really not that hard to understand. Without a doubt, they are better understood on average among HN readers than among cryptocurrency owners, and yet, it is the only subject where expressing doubt over it's worth always gets you hit with "Well maybe you're just not enlightened enough??"
Without a doubt, average HN reader knows more about cryptocurrency than average cryptocurrency owner, knows more about farming than average farmer, knows more about biology than average bioscientist. Why? It's obvious, isn't it? \s
Cryptocurrencies aside, currencies are hard to understand. It's not "you trade money for stuff, duh!". It's how USA can print dollars to import stuff from China year by year without giving anything back. It's who prints money. It's how come printing dollars makes existing ones less valuable while also creating debt. How does independent currency affect debt-based currencies?
It's easy to be elitist. We know about computers more than average Joe, so we are experts on computer's money, but IMO cryptocurrencies are more currencies than crypto. And currency part is harder to understand than crypto part.
> expressing doubt over it's worth always gets you hit with "Well maybe you're just not enlightened enough??"
I also doubt that blockchains contribute anything of value for most applications that are currently being tried out, but I also felt that "selling blockchain blocks" was an odd way to phrase it.
It's a bit like someone claiming that a perpetuum mobile is impossible because "movement consumes energy and eventually it will run out". You can't tell whether they have the correct idea about conservation of energy and momentum or whether they actually believe that moving at a constant speed would constantly require energy even without friction.
I'm more wondering why would legit investors pour 12 mil into something that it obviously a short-lived gimmick. There are plenty of similar examples that perfectly illustrate how fast people get bored with something like this (e.g. flappy bird, pokemon go, fidget spinners) and yet the round got successfully closed [0]. I just don't understand what needs to be happening inside an investor's head to put their own money into something like this.
It's quite simple: the scammers who create the scams can't market a security to non-institutional investors, as they would have to go through strict regulations. They give discounts to VCs who can sell their tokens to retail investors in a week with huge returns after they ,,invested''.
You just don't understand the potential. You can buy more than just kitties. You can also buy hats for your kitties. And if you sell the kitty, the new owner can take the hat off. Infinite innovation! https://www.nickgrossman.is/2018/zombies-eating-kitties/
I had a lot of respect for AH and USV. In particular I know some of the folks at USV. But some of their decisions astound me. When they invested in Crypto Kitties and Fred posted about it, I felt they jumped the shark.
I remember how $31M was poured into a startup called Color a few years back, only for the startup to go belly up a month later. Meanwhile they don’t even take a meeting with something far more promising, sometimes. I feel I will never understand the VC mindset.
For what it’s worth, here are their perfunctory rationales:
> I'm more wondering why legit investors pour 12 mil into something that it obviously a short-lived gimmick.
I think that might because you're looking at it like this:
"How will a game that lets you breed collectible cats be something that people wanna do for a long time?"
When instead you should be looking at it like..
"Can provably scarce digital assets that are actually owned by users (not rented like the current system) be useful in the gaming world?"
CryptoKitties as a game is likely just a fad. But the investors are betting the latter idea might be a game changer when executed correctly (ie. building a fun game that has longterm user retention)
1. The team behind Crytokitties created the most used dApp to date, with excellent UI, attention to detail, and many other innovations behind it. Lots of investors believe in investing in a team first and foremost, and this is an excellent one.
2. Nobody invested in Crptokitties. They invested in a gaming/collectibles company; from TechCrunch: “While the startup is being pretty mum on what the future looks like and what they’re planning on using this funding for, it’s almost certain that the long term goal is to expand beyond CryptoKitties and use the same Ethereum ERC-721 collectible standard to create other game experiences, especially ones that can be played by regular people who are unfamiliar with cryptocurrency.”
You use flappy bird and pokemeon go as examples of fads that would be dumb to invest in, but what about the early investors in Zygna? Gaming and collectibles doesn’t appeal to me personally, but they are massive markets and growing. Early stage investing is a long shot, and odds are this company fails. But the execution to date and market opportunity are sufficiently appealing that I’d invest alongside USV in these guys if I could.
Interestingly, cryptokitties is behind the effort for standardizing the concept of asset or non-fungible tokens (where tokens, here kitties, have different prices). It's called ERC-721 (similar to RFCs) and it's quite controversial: see https://blog.citymayor.co/posts/why-the-standardization-of-e...
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[ 0.19 ms ] story [ 130 ms ] threadLet's see what's going to happen to finance. The fiat-crypto infrastructure that has been and is continuing to be laid out by multiple varied parties is an indicator for the recurrence of another bull market, especially when the current market cap is compared to the the cash, stocks and commodities that are out there, each kind of which crypto assets are identical to.
The best thing we can hope for is the next bull run to be based on actual use, working products that add benefit and value to market society. And who knows, maybe it'll all even become transformative.
Please remember that there are over 7 billion people in the world that want to potentially use it, so Bitcoin (or similar) are not working as a payment system.
Everything has existed on the plane of theory and whitepapers so far.
Nearly a decade after BTC's release and nearly half a decade after's ETH, shouldn't there be a few mainstream applications using them?
I run a CBD store and it's extremely hard for CBD companies to get banking without exorbitant fees. For example, it costs ~2.5% for normal companies to process a credit card payment through stripe. For us, it costs >7%. Many of my competitors and suppliers are turning to cryptocurrencies for the lower fees and guaranteed certainty of payment.
The impact of crypto is yet to be fully estimated but it seems as if there isn't any existing system crypto cannot replicate and there are many systems enabled by crypto that existing systems will fail to create.
Cryptocurrencies might have an edge for a while, but don't count on it long-term.
[1] https://en.wikipedia.org/wiki/IDEAL
It's not even funny. Go for ETH, BCH, Dash, or whatever, Bitcoin is proud to continually shoot themselves in the foot.
Geez.
Some other applications: provably fair gambling, decentralized voting and an uncensorable twitter (ex memo.cash).
Gambling: why is that better than a non-blockchain, regulated solution? The results have to come from somewhere, so that is a centralized point of trust you inevitably need. Unless you mean that the odds are decided "fairly" then I question why you would bet your money at a place where you can't trust the odds, or why you don't bet elsewhere where the odds are more in your favor.
Decentralized voting: I don't know why anybody would want that. If you don't control who votes, you end up with rigged votes. Unless you mean that only the block producers (miners) vote, then you will end up in an oligarchy.
Uncensorable Twitter: If by "uncensorable" you mean immutable: nobody sane wants that. Once somebody posts child pornography to the blockchain, you will have to explain to the police why you have child pornography on your computer.
Even with full 100MB blocks you're only looking at ~5TB of storage for a whole year. This is easily attainable for many people, including myself, today. The point isn't to have everyone run full nodes you know, some trust is acceptable.
The fact is cryptocurrencies work very well as a payment system today.
> then I question why you would bet your money at a place where you can't trust the odds
Obviously here you wouldn't need to trust the odds as they are verifiable.
> I don't know why anybody would want that. If you don't control who votes, you end up with rigged votes.
You can have a voting scheme where you give out unique votes, centrally, which you can then yourself without trust verify that your vote is correctly counted. Why anyone would want that should be clear.
> you mean immutable: nobody sane wants that
Many people would want that. There are of course drawbacks.
You can also store hashes of content which you can store elsewhere which you can verify. Like many torrent sites work.
You missed the point about gambling. Please re-read what I said about the odds. You need to trust the service anyways to input the correct result.
Voting requires anonymity. By giving out unique votes, you jeopardized this.
Storing content elsewhere doesn't require a blockchain because it doesn't guarantee that it will still be there. Thus it's not censorship resistant.
Decentralization is just a means to an end: permissionless p2p digital payments. You don't need to personally run a full node for that.
For example Bitcoin Cash is a great payment system.
Or that the Zimbabwean Dollar is representative of all fiat
The only things you can do with already mined blockchain blocks are selling them, or hoarding them. Their immutability is their biggest selling point, after all.
If the conversation is about how human society can evolve with this new level and kind of coordination, then we may fare better.
Ex: The only things you can do with already mined blockchain blocks are selling them, or hoarding them.
You don't actually do anything with blocks. Blocks contain transaction data for the network, confirmed by miners who play hash games for block rewards. I think you mean the actual coins that come as block rewards, aka Satoshis / Bitcoin.
Are you familiar with decentralization and developing apps on things like Ethereum? Or IPFS?
Cryptocurrencies aside, currencies are hard to understand. It's not "you trade money for stuff, duh!". It's how USA can print dollars to import stuff from China year by year without giving anything back. It's who prints money. It's how come printing dollars makes existing ones less valuable while also creating debt. How does independent currency affect debt-based currencies?
It's easy to be elitist. We know about computers more than average Joe, so we are experts on computer's money, but IMO cryptocurrencies are more currencies than crypto. And currency part is harder to understand than crypto part.
I also doubt that blockchains contribute anything of value for most applications that are currently being tried out, but I also felt that "selling blockchain blocks" was an odd way to phrase it.
It's a bit like someone claiming that a perpetuum mobile is impossible because "movement consumes energy and eventually it will run out". You can't tell whether they have the correct idea about conservation of energy and momentum or whether they actually believe that moving at a constant speed would constantly require energy even without friction.
[0] https://www.crunchbase.com/organization/cryptokitties#sectio...
Someone who bought cryptokitty early on sold it for 100x returns easily.
Everyone on the hype train was reselling kitties to next bigger fool.
Now try to get 12Mi outside of SF and Bay Area for something with a more solid business plan, see how it goes.
I had a lot of respect for AH and USV. In particular I know some of the folks at USV. But some of their decisions astound me. When they invested in Crypto Kitties and Fred posted about it, I felt they jumped the shark.
I remember how $31M was poured into a startup called Color a few years back, only for the startup to go belly up a month later. Meanwhile they don’t even take a meeting with something far more promising, sometimes. I feel I will never understand the VC mindset.
For what it’s worth, here are their perfunctory rationales:
https://versionone.vc/announcing-our-investment-in-cryptokit...
http://www.usv.com/blog/cryptokitties-1
I think that might because you're looking at it like this:
"How will a game that lets you breed collectible cats be something that people wanna do for a long time?"
When instead you should be looking at it like..
"Can provably scarce digital assets that are actually owned by users (not rented like the current system) be useful in the gaming world?"
CryptoKitties as a game is likely just a fad. But the investors are betting the latter idea might be a game changer when executed correctly (ie. building a fun game that has longterm user retention)
2. CryptoKitties went viral, slowing ETH transactions to a crawl and making top headlines - what if that can be repeated?
3. as someone said, 12M is nothing for them
2. Nobody invested in Crptokitties. They invested in a gaming/collectibles company; from TechCrunch: “While the startup is being pretty mum on what the future looks like and what they’re planning on using this funding for, it’s almost certain that the long term goal is to expand beyond CryptoKitties and use the same Ethereum ERC-721 collectible standard to create other game experiences, especially ones that can be played by regular people who are unfamiliar with cryptocurrency.”
You use flappy bird and pokemeon go as examples of fads that would be dumb to invest in, but what about the early investors in Zygna? Gaming and collectibles doesn’t appeal to me personally, but they are massive markets and growing. Early stage investing is a long shot, and odds are this company fails. But the execution to date and market opportunity are sufficiently appealing that I’d invest alongside USV in these guys if I could.
hucksters, swindlers and charlatans
-- https://youtu.be/xCHab0dNnj4?t=32m34s