mjnaus

28 minutes ago, mommysboy said:

Expensive though.  But it's a certainty.

Unfortunately, certainty does come at a cost. But assuming you're from the US or Europe/UK, at least you'll be certain you get what you need.

54 minutes ago, lkn said:

And yet that is what El Salvador picked, and (based on this thread) Brazil plus Sri Lanka are now looking at doing the same, so you say that all these people, and the posters in this thread, have no basic understanding? I wonder then, do you think that it is all driven by hype? ????

Your point being what? This thread was about DeFi, not El Salvador adopting Bitcoin. You're the one that keeps dragging Bitcoin into this. I have literally seen two other posts that mention Bitcoin and at least half a dozen from yourself (probably more if I start digging through the entire thread). I don't claim to know what El Salvador's endgame is with their Bitcoin play, and frankly I don't really care. It matters very little in the grand scheme of things. But IMO, it's pretty obvious Bitcoin isn't going to take over local currencies as the main medium of exchange for small transactions. Who knows what Brazil and Sri Lanka are planning/thinking. Again, this thread was about DeFi, not the merits of Bitcoin as money.

1 hour ago, lkn said:

Of course Ethereum is different, right now though, it is showing lots of scaling problems, but as soon as we have a fair proof of stake system, L2 solutions, and solved the oracle problem, then we are all going to be rich! ????

 

L2 solutions are already there: https://l2beat.com/. Currently $3+ billion TVL and that's without Optimism even being fully open yet. Chainlink is doing just fine handling the oracle problem on Ethereum and other L1s. The beacon PoS chain is live, and has been for quite a while.  Ethereum is scaling. It's not a binary state, it's a spectrum on which a network progresses slowly. As anyone who's got their pulse on the finger would know, its heading in the right direction. Slowly, at times, but steady. Seriously doubt any of this is going to make you rich though ????

7 hours ago, lkn said:

I am evaluating the stuff that people tell me is actually working now, not in 18 months.

 

So who told you Bitcoin is "working" as what at the moment? Seriously doubt that anyone with even basic understanding of the industry would argue that Bitcoin, as money, as actually working. Or that smart contract wallets are functional, or even exist, on the bitcoin network (rather strange that one, since bitcoin does not have smart contract functionality). And who said anything about 18 months? To achieve what?

It seems a bit odd that you're toying with a LN (which uses state channels) wallet on bitcoin, and then extrapolate those experiences to smart contract wallets on other chain's L2's (most of which involve roll-up tech). The two couldn't be further apart, both in underlying tech as in user experience.

7 minutes ago, lkn said:

From what I have seen, L2 wallets muddy the waters. If you subscribe to not your keys, not your coins, that is L2 wallets, and for some, it is really unclear who even holds the money. For example I tested one LN wallet, and you could fund your wallet by sending BTC to some address that I did not have the private keys to, I mean, <deleted>? I could just as well send the money to PayPal and pay less fees…

You're focussing way too much on Bitcoin, which isn't the platform that is going to solve this. It does not have smart contracts, and a LN wallet is not the same as a smart contract wallet.

If we're looking at Ethereum for example, smart contract wallets (whether they're on L1 or L2) maintain the same security concepts as a regular wallet, hence they're secured by a private key. There's absolutely no doubt where the funds are, as it's all transparent and on-chain: the funds reside inside the smart contract wallet. Whether the wallet resides on the L1 or any L2 does not matter for anything other than finality and transaction costs: since the wallet is a smart contract and smart contract transactions use more gas than regular wallets, they tend to be more expensive on the L1, which is why L2's make these wallets more practical.

It goes without saying that sending any value to a wallet for which you do not have the private keys isn't a smart thing to do. 

1 hour ago, lkn said:

Above graph shows average transactions per second for bitcoin over the last 3 years. Mainstream adoption? Judge for yourself ????

I can't speak for anyone else in this thread, but I certainly would never argue that Bitcoin has hit mainstream adoption as a money. SOV is a different story, it'd be pretty easy to make the argument that Bitcoin has bit mainstream adaption as an alternative SOV asset. But as money, it sucks. Totally agree there. 

I think we need to move on from talking about Bitcoin. It's old, boring and the biggest news coming out of the Bitcoin world the past two months is that you can soon tip other Twitter users in Bitcoin. 

The world of crypto and blockchain tech is so much bigger than Bitcoin, so how about discussing something else than that boring pet rock? Heck, if I want to do anything even remotely interesting with my BTC, I need to deal with the hassle of moving it over to another chain. I get more use out of my BTC on Ethereum than I do on its own network. 

50 minutes ago, lkn said:

Both of you lost all your crypto money in a boating accident? I stand corrected, blockchain do allow things I previously didn’t think were possible ????

 

But sorry guys, I do sympathize with you, but I hope you realize that if you didn’t have any backups of your private keys, what is the chance that regular people will? People lose their phones all the time.

 

I am currently trying the lightning implementation of BlueWallet, I don’t think most people would even understand what they are supposed to backup from this wallet (when creating a lightning balance).

 

Edit: Just remembered, I have a family member who is into crypto (as a speculative asset), he is using some OTP generator for his wallet, and told me, that the forum he follows about all of this, a lot of people had lost their OTP generator’s seed, when migrating to a new phone, and was therefore locked out of their wallet. For this reason, this family member has decided to simply keep his old phone as a dedicated crypto wallet, and will never update it, and it is no longer his main phone. He is not a technical guy, so what he is doing is a rational practical solution, but it’s also quite ridiculous and funny.

???? Memes are soooo much more fun when you have explain 'em. Try this on Google: "lost my crypto keys in a boating accident meme". Having said that, I really did loose my keys in a horrible boating accident. 

Using phones as anything but a hot wallet with restricted funds is a terrible, terrible idea. Phones have a limited lifespan, so you're always just kicking the can down the road. Furthermore, they're easy targets for hackers as long as the phone maintains a working internet connection. Significant funds should ALWAYS be stored on a cold wallet, preferable a hardware wallet like Trezor or Ledger. And when it comes to seed phrases, people tend to get creative. I typically do no disclose details about my strategies, but not having a single point of failure is a major theme ????

When it comes to handling wallets, keys, etc. I totally agree that the space still has a long, long way to go. The UX is still pretty horrendous, but tons of efforts from smart people are under way to make this better. Smart contract wallets with social recovery are promising and with more L2's appearing on the scene, these types of wallets are closer to becoming a reality (some already exist, however due to high gas fees on the L1 don't really work from a practical point of view).

3 hours ago, The Cipher said:

But unfortunately I lost my crypto wallet in a boating accident this past summer and now it's gone. ????‍♂️

 

That is so weird! I too lost all my bags during a horrible boating accident. All gone; let's move on.

19 hours ago, The Cipher said:

Yeah this was me! In Vancouver now, but tentatively expect to be back around the holiday period. Will be located in Bangkok. Would be happy to meet up with you individually or even as an 'AseanNow Crypto Bulls N' Bears' group more generally. The latter would probably make for a funny as hell evening.

I'm game! Let's connect early next year and see if we can organize something.

4 hours ago, lkn said:

No, because we have an exchange rate based on import/export of the European union, and we are trading a money generating asset.

There is an exchange rate between USD/EUR simply because there’s demand for it. Wether or not that demand is entirely driven by imports/exports (which of course it isn’t) is irrelevant. All that matters is that there a liquid market facilitating the trade in currency pairs, just as there is between Aave tokens and USD. And as I mentioned, Aave generates fees denominated in USD directly as well, rendering the entire point moot. 

1 hour ago, lkn said:

But they are not generating U.S. dollars, so I don’t see how you can value them in U.S. dollars.

As long as there are liquid markets where the underlying tokens are traded for fiat US or US based stables, of course those tokens can be valued in USD. 

Your statement would be akin to stating that a Dutch public company, generating revenue only in EUR and not trading on any USD based stock exchange can not be valued in USD terms. That doesn't make much sense. 

And to stick with @The Cipher's original example of AAVE, if you're an LP on the protocol in one of the USD stable coin pools, you would be generating fees denominated in USD.

Here's some interesting stats on AAVE from our pals at Token Terminal: https://www.tokenterminal.com/terminal/projects/aave

1 hour ago, The Cipher said:

Rest assured, I'm familiar with valuation methods consistent with finance theory.

 

Here are some quick thoughts re: crypto valuation.

• Most crypto protocols have valuation parallels with traditional assets. You gotta actually make an effort to understand the differentiating value propositions for different cryptoassets to understand which are applicable.
• For instance Bitcoin isn't very 'useful' but claims its value proposition as a fixed-supply source of digital gold. You may or may not agree with that demand driver, but gold has traded on a similar proposition for thousands of years. At the time of writing an ounce of gold costs $1,760/oz, a price detached from the real world 'usefulness' of gold. I could expound but it would get too long. Just think of it as something something longstanding cultural norm and established track record with known correlations allow for a pool of buyers/sellers where each feels relatively sure that said pool will remain over time.
• Some crypto protocols, like AAVE actually do generate cash flow and can be valued by traditional DCF techniques and valuation multiple techniques.
• Other 'useful' cryptos, like Ethereum need to be spent in order to perform transactions and activities on the network (gas fees), or are are often locked (removed from supply) in order to perform a function. When a network sees an explosion in use like Ethereum has this year, demand for tokens spikes as more users need to access the network and need to bid for Eth to do so. 
• Have said this elsewhere, but a lot of crypto protocols can be thought of as akin to venture capital portfolio companies that trade in real time from seed through to maturity (or death), rather than buried in the private closed-end fund structure of traditional venture capital. Hopefully someone understands the profundity of this. It's one of the cleverer things I've written lately. This explains why you see so many famous VC firms (and VC firms in general) as major operators in the space now.
• Speculation in the space, as well as leverage, pushes up a lot of assets to very high multiples when compared to more mature companies. The resulting high volatility makes the a dream for certain types of traders. This partly explains why you see so many famous Hedge Funds in the space now.
• Some investors are making intelligent bets on growth based on research, but others are just aping around and a few tokens have valuations are nonsensical (no, this doesn't mean they all are).

That concludes my thoughts on valuation methodologies for crypto and its related valuation quirks. I won't be covering the second part of your post, ie 'what problem does crypto solve and why would anyone want it?'.

 

Nothing against you, but I've done that way too many times on here and nobody ever responds to what I actually write on that topic (although collectively the responses to those posts make for an interesting case study on behavioral finance biases, but I digress).

Very well articulated! Most probably will fall on deaf ears with the fanatic anti-crypto crowd, but I appreciate this writeup nonetheless. Hope you don’t mind me recycling some of this content?

I could be mistaken, but weren’t you the one proposing a meetup in another thread a few months back? If so, and if you’re still in Thailand beginning next year, we should get together for beer/coffee. 

3 hours ago, lkn said:

I can download a photo from Instagram and then sell “ownership” on multiple blockchains. What did people actually buy?

Fortunately, the use cases for NFT’s, even with regards to art, go way beyond “basic” images. One use of NFT’s I am interested in is generative art. This is where art is generated by an algorithm, on chain. So both the algorithms and the generated artwork are both on-chain. Scarcity is built into the algo and a randomness component is included, ensuring each piece is truly unique. Since the algo itself is a smart contract, the uniqueness is verifiable. The interesting part here is that the artist programs the algorithm, and the algorithm creates the pieces. Most look like complete garbage, but there are a handful of artists out there that build algos that turn out amazing art work. 

1 minute ago, fdsa said:

I don't understand how NFT could prevent me from doing Right Click -> "Save As ..." on any picture I like. Or youtube-dl on any video or mp3 I like.

We have proof of ownership for 13 years already, in the original blockchain and every single other cryptocurrency. Why we need those thousands of automatically generated images of apes with different faces and hats called "new unique NFT collection"?

True. Nothing stops you from “right click, save”. Much in the same way nothing stops you from taking a picture of the Mona Lisa or any other famous piece of art. It’s not quite the same as having verifiable ownership of something though. I got to admit I don’t fully understand the current NFT silliness either (I do like certain pieces of generative art though, and the concept behind it).

Not quite sure what you mean by the second part of your post though? Most NFT minting and trading takes place on Ethereum which has had smart contracts templates for NFT’s for quite a while now. I am not aware of any NFT specific blockchains out there? Then again, I might be missing something… as I said, not too interested in the whole NFT spectacle.

28 minutes ago, HenryfromMalaysia said:

Totally agree with the rubbish NFT which is introducing so many new ICO based on NFT.

Got one new ICO called Rinnegan listed today. Based on Naruto etc blah blah blah.

 

Who is crazy enough to buy these sh*t.

And it is these sh*t that will drag the whole crypto market down when NFT fails

I am sure any rational person would agree that the NFT market appears to be a bit frothy at the moment. Having said that, that shouldn't automatically mean the entire NFT market should be dismissed and regarded as useless, a scam, etc. Back in 2017, ICO's were giving off the same impression: super frothy and top signal after top signal. Indeed, many of those ICO's were complete garbage. Yet, some still remain to this day and have turned into actual projects that serve a market and have value (BAT springs to mind). We can even extrapolate this to the .com bubble of the late 90's; super frothy at the time. Yet, if we look back at what the ideas, concepts and businesses that were part of the bubble, a good amount of them are still around today (Amazon anyone? Ebay? Coupons.com?). Even companies that did end up going bust, might not seem that crazy today. Take pets.com for example. This one was kinda the poster-child for the tech bubble. Yet, a company that provide e-commerce for pet food does not seem that ridiculous today. 

Just because speculation drives up prices, does not mean that the underlying concepts, assets, businesses, etc don't have any value. The same holds true for NFT's. While some prices appear ridiculous today, the concept of NFT's is one that will proof its value over the coming years, I am sure of this. Wether this will be digital art, in-game purchases, financial products, or something completely different remains to be seen. 

21 minutes ago, fdsa said:

I am too lazy to describe everything in detail (and noone would read a large post anyway), so I will sum up in short:

 

- DeFi sucks and has no value or use. No, it will not kill banks.

- NFT sucks and has no use except money laundering

- infinite supply cryptos such as Ethereum suck and have little to no value, and little to no use

- only limited supply cryptos such as Bitcoin not suck (but still have little to no use)

 

Well said ser, well said. And don't forget: "lazy" just means "efficient". 

7 hours ago, The Cipher said:

I'll explain this one. Although it could also be Googled as well.
 

What determines the real-time stock price in any public market (tradfi or crypto) is bid-ask pressure. Prices are marked based on the moving bid-ask equilibrium on exchanges during open-trading periods, which for crypto is 24/7 (hey, an innovation in action!). Essentially the market price is given by the price of the most recent transaction. So the floating value of your asset is always marked to that price.

 

But what would happen if a ton of people wanted to sell at once? Well, the massive number of orders on one side of the trade would need to find counterparties on the other side to fill them, creating a buyer's market and pushing down prices to find a willing buyer. So realized returns for market participants would (a) differ from each other; and (b) deviate from the previous equilibrium price. If there were no willing buyers at all, the asset value would drop to zero.

 

This is how all financial markets function. It is not a quirk of crypto. For instance if every shareholder of AAPL wanted to liquidate at the same time, they would encounter an identical problem. In public markets where nobody wants to sell a stock and folks want to buy (think positive earning surprise), prices quickly gap up.

 

To hammer the point home, do you own real estate? If so, did real estate in <your home city here> appreciate since the start of the pandemic? How did everyone end up with more nominal value than they put in? Now what would happen if everyone tried to realize those values at the same time by putting their houses up for sale?

 

So hopefully that clears this issue up.

---

Bonus note: The peculiarities of the crypto market result in price movements that happen a lot faster than most other asset classes. Reasons for this include coins off exchanges; illiquidity; availability and use of callable leverage; leverage rehypothecation; and herding behavior resulting in market participants that tend to cluster on one side of a trade depending on fear/greed consensus.

Excellent explanation.

Two things I’d like to add: first off, what @lkn and many others often seem to miss is that when prices go up, nobody is actually magically ending up with extra $$ in their pockets. Unrealized gains of an X amount of value does not automatically translate into realized gains. This does not happen until the underlying asset gets sold. Now, as @The Cipher pointed out, if everyone were to try to convert their unrealized gains into realized gains by selling the underlying asset, this would put tremendous pressure on the asset’s spot price which would quickly go down. In this aspect, digital assets don’t behave differently from other assets such as stock where the same principle applies. 
 

As to how value gets created; consider the following example on the Ethereum network: every epoch (arbitrary amount of time) a block gets added to the chain for which the miner or validator gets rewarded a certain amount of freshly minted ETH. This is ETH that did not exist previously and that now gets added to the marketcap of Ethereum. Voila; value created! As long as the issuance of fresh ETH is below the demand for ETH, prices will continue to experience upward pressure. This needs to happen to continue securing the network (rewarding validators for new blocks). 
 

As long as demand continue to outpace supply, prices will experience upward pressure. Now, the critics will continue to argue the demand side; “why would anyone want to buy ETH” and “it has now value” etc. It OBVIOUSLY does have value, otherwise prices would not expirerende upward pressure. Just because you don’t understand the demand side, does not mean it doesn’t exist. You can sit there all day and argue that everyone buying these assets are fools and are falling victim to a scam, etc. All of that does not take away from

the fact that there is larger demand for these assets than there is supply. And when demands slows down; there are corrections in price (as there would be on any functioning market), but the sky doesn’t fall… the market rides out the correction and continues as it would.
 

Again, crypto does not differ from day stocks for that matter. Some

might say there is absolutely no value in a certain stock, while other think it’s undervalued. This also shows that investing in an asset simply because you expect it to go up, isn’t all that bizar. It’s what investors do on traditional markets every single day. 
 

“Value” is a funny, fuzzy and totally subjective thing. But stocks have company fundamentals and dividends that underpin their value, some might say… Looking at fundamentals went out window with regards to valuing stock prices a long time ago. Current stock prices have nothing to do with fundamentals or dividends (which most stocks do not pay, and if they do it’s so low, it really isn’t a factor anymore). Furthermore, blockchains like Ethereum and Terra have protocol revenue and other fundamentals that would allow traditional fundamentals investors to value the protocol tokens based on those fundamentals (some investors are actually taking that approach).

Second, to the point of market volatility, in addition to the points made by @The Cipher with regards to the markets being most unregulated allowing for rather extreme levels of leverage, etc. Some argue that the volatility is a feature of true free markets that are allowed to function without any interference. 

20 minutes ago, lkn said:

In other words: You can’t answer the simple question of what problem they are solving.

 

You could have used the chance to enlighten us, instead you just hurl more insults and again a vague claim with no supporting evidence.

Again, a simple Google query goes a long way. But since you can't be bothered, here you go: https://africa.cardano.org/. How's that for "supporting evidence"? 

And I never said Cardano is solving anything with their Africa deals (apparently the Ethiopian government appears to think so, but let's put that aside). I replied simply to point out that you haven't got a clue, yet still feel the need to continue vent your opinion on how its all useless. 

Myself and others have tried, for 6 pages now, to "enlighten" you. Surely the one thing we can agree on is that that has proven to be a pointless endeavor? It's really not rocket science, my friend. You want to be "enlightened"? Open yourself up to the possibility that maybe, just maybe, you're not entirely correct and some of these blockchain projects have merit and potential. That'd be step one. Now, onto step 2.... instead of claiming you know what's happening in the industry, actually do some research (hint: watching the talking heads on CBN discussing how Bitcoin is used by hackers ain't actual research), join some Discord groups, join some Telegram groups, sit in on some of the dev calls for the leading projects, etc.

But as long you remain unwilling to open your mind just a tiny bit, no matter how much effort anyone puts into trying to "enlighten" you, it'll continue to be pointless exercise.  

1 hour ago, lkn said:

What problem are they working with African countries to solve?

 

You actually think that African farmers, with a low literacy rate, wants to buy a battery operated electronic device to exchange digital tokens instead of cash?

 

This is not solving any problems, this is just some spoiled kid’s misguided idea of helping the poor.

Another perfect example of how clueless you are. And of how the religious anti-crypto crowd will simply dismiss everything without having a clue what it really is they’re dismissing. 
 

if you would have bothered to just run a simple Google search query, you’d know that Cardona is doing some form of on-chain identity management for a couple of African governments. Nothing to do with crypto currencies. 
 

But hey, why let some actual research and knowledge about the space stand in the way of some nice, uninformed drivel about all of crypto/blockchain tech being useless.

You can’t be surprised people don’t take you serious after posting stuff like this?

15 minutes ago, Neeranam said:

There are better cryptos than Bitcoin, much better. 

Shhhh, don't make things too complicated.

For those who oppose and dismiss anything crypto-related, it's much easier to consider "crypto" as one, single "thing". The mental gymnastics required to oppose say ETH-maxis (who can't stand Bitcoin) or Cardano fanboys (who hate Ethereum) would be nearly impossible to perform (since it requires in-depth knowledge of these projects). Hence, in their simplistic worldview, if you think a certain blockchain/crypto project has potential, you'll now suddenly have to defend the industry as a whole including the pet-rock that is Bitcoin and outright scams like Onecoin. Let's keep things simple: Bitcoin = crypto, and crypto is bad/useless/scam/unsafe/hacker-prone/run by Ukranian mafia/etc. Let's not bring any nuance into this ????

Of course the reality is much more complex. The entire industry is very, very fragmented. But having these non-sensical, ill-informed discussions on multiple fronts with knowledgable people who only see merit in specific projects is too much to handle, even for the hardcore anti-crypto crowd. 

2 minutes ago, sucit said:

what I do know is every time there is a development, it’s always… oh, that just little El Salvador. Oh never mind that, it’s just Brazil they are nobodies. Oh, it’s outperforming everything even after a huge crash, that’s worthless. It’s gonna get banned. And on, and on 

Yep, so true. It’s all the standard rhetoric. Everything is dismissed out of the gate, without any nuance, reason or rational. Borderline religious fanatics. Best not to engage with these people, as they’re not at all interested in an actual discussion (although of course they claim that is what they want). Then again, these threads to tend to have high entertainment value ????

52 minutes ago, HenryfromMalaysia said:

Thanks mjnaus. have only one full ether which is 'hold for life' so just wondering if should stake it for 5% on ether 2.0 but will be tempted to sell 'hold for life' if every double price from now. If....

If you’re holding it long term, might as well stake it and make some more. There are several solid “liquid” staking pools (Lido, RocketPool) which give you a token in return for staking ETH. For example, Lido gives you stETH in return for locking up ETH. This token can then be used in DeFi. I have a good amount of ETH staked with Lido and have dumped all of the stETH in Curve. The Curve tokens are then deposited in a Yearn vault. All in all, this strategy earn about 11% APY (or thereabouts). Once the merge takes place, we expect staking yields to go up significantly. Not completely without risk of course; but it’s all good fun ???? 

14 minutes ago, lkn said:

And you have made it painfully obvious that you can’t argue facts or answer simple questions like how value is created in a zero sum game, so instead you try to discredit your proponent with derogatory statements.

I can live with that ????

5 minutes ago, lkn said:

Blockchain does not solve a technical problem that the financial industry have, but it is currently a new source of revenue for banks, it’s gambling camouflages as investment.

Alright bud; you’ve made it painfully obvious that you don’t get it. Let’s move on.