Will DeFi Kill Banks?

[lkn]

On 10/3/2021 at 11:52 AM, Neeranam said:

Did you know that El Salvador's currency is now Bitcoin and they use volcanoes to mine it? They are also talking about using nuclear power. 

Here’s an update on how it is going for them: https://www.elsalvador.com/noticias/nacional/nayib-bukele-bitcoin-mineria-alto-costo-energia-electrica/885523/2021/

 

TL;DR; They are spending roughly 17 times as much money as they obtain, and experts are worried that rerouting energy to bitcoin mining will increase prices for regular consumers, which already pay 3 times as much for energy as the world average.

[Neeranam]

17 minutes ago, lkn said:

Here’s an update on how it is going for them: https://www.elsalvador.com/noticias/nacional/nayib-bukele-bitcoin-mineria-alto-costo-energia-electrica/885523/2021/

 

TL;DR; They are spending roughly 17 times as much money as they obtain, and experts are worried that rerouting energy to bitcoin mining will increase prices for regular consumers, which already pay 3 times as much for energy as the world average.

I'm not really interested in BTC, only got a very little. Its old and slow, kinda like gold, but it has a use a store of value. 

Also, easy to see where its going, 30% increase in value this month, 100+% by end of year, which will take altcoins up too. 

[Neeranam]

Talking about Ripple -  they partner Qatar National Bank 

 

https://www.thepeninsulaqatar.com/article/05/10/2021/QNB,-Ripple-partner-to-enhance-cross-border-payments

[lkn]

54 minutes ago, Neeranam said:

Also, easy to see where its going, 30% increase in value this month, 100+% by end of year, which will take altcoins up too. 

Why are bitcoin and altcoins destined to go up in value?

 

Do we agree that price for these coins is based on demand?

 

If so, what is causing this demand?

 

Do we agree that demand is solely because people think that if they buy today, they make a good investment, as in a year, they will be able to sell at a profit?

 

As someone who studied pure math, do you think this can go on forever?

 

Footnote: A lot indicates that demand is not organic. Price is in large part set by a lot of wash trading and unbacked stable coins. Just add up the market caps of the largest five crypto coins, and you get more than 1.5 trillion dollars. Do you really think there is even a fraction of that amount available in fiat, if people wish to cash out (when they realize that their dentist will not accept their DentaCoin)? Most exchanges don’t even let you trade fiat, instead they use things like USDT ($70 billion market cap) and pretends it’s the same as real U.S. dollars, but it is not!

[billd766]

On 10/4/2021 at 3:41 PM, HenryfromMalaysia said:

Banks will not die as there is still mortgage, lending, loans but one thing crypto can do is the money exchange. I understand Ripple tried to do something on currency exchange but failed to take off.

The global currency exchange (USD to Euro, GBP, Renmenbi etc) will likely be fee free when crypto solves this problem in the next few years

So when that happens all I need to do is to get the Pensions Department of the UK government to pay me in crypto currency. Then of course it will an easy task to convince Bangkok Bank here in Thailand to accept crypto currency and pay me my money in THB.

 

Will it be that easy do you think?

[lkn]

46 minutes ago, Neeranam said:

Talking about Ripple -  they partner Qatar National Bank 

Who needs partners when we have trustless blockchain technology? Oh… maybe because Ripple likes to pretend to be an enterprise blockchain company, but this is not what they are selling to the banks:

 

Banks are unlikely to use distributed ledgers to process cross-border payments for now because of scalability and privacy issues, according to Ripple, one of the most prominent startups developing the technology

[…]

Several banks have tested or deployed a system Ripple developed for international payments that uses a “bi-directional messaging” that can eventually plug them into distributed ledgers, but xCurrent’s technology itself “is not a distributed ledger,” Schwartz said.

[…]

While xCurrent uses cryptography, each party using the system does not have access to a shared ledger, as is the case with distributed ledgers like ethereum or Hyperledger Fabric.
 

Source: https://www.reuters.com/article/us-blockchain-ripple-idUSKBN1J92JG

[mjnaus]

1 hour ago, lkn said:

Do we agree that demand is solely because people think that if they buy today,

No, we do not agree with that statement. Looking at ETH for example, every transaction on the network requires ETH to pay for gas, hence increase transaction volume brings increase in demand and therefor puts upward pressure on the price of ETH. Furthermore, a large number of NFT's traded on Ethereum are priced in ETH (pretty much everything sold on OpenSea at the moment), ie buyers of those NFT's will need to acquire ETH before they can purchase their NFT's. 

 

You're sure you want to continue proclaiming you know this space so well and follow it all closely?

[lkn]

21 minutes ago, mjnaus said:

No, we do not agree with that statement. Looking at ETH for example, every transaction on the network requires ETH to pay for gas […]

It was specifically about BTC, but do tell me, what value can I derive (in the physical world) from doing a transaction on the Etherium blockchain or “owning” an NFT (you of course know that there are multiple chains selling ownership to the same NFTs, and that some people are selling NFTs of art they do not themselves own, i.e. it’s no different than selling you a certificate stating you own a star)?

[Phoenix Rising]

1 hour ago, billd766 said:

So when that happens all I need to do is to get the Pensions Department of the UK government to pay me in crypto currency. Then of course it will an easy task to convince Bangkok Bank here in Thailand to accept crypto currency and pay me my money in THB.

 

Will it be that easy do you think?

Of course it will. Thailand will be a DeFi hub by then and using cryptic crypto currency will be as smooth a process as dealing with Thai immigration!

[mjnaus]

8 minutes ago, lkn said:

It was specifically about BTC, but do tell me, what value can I derive (in the physical world) from doing a transaction on the Etherium blockchain or “owning” an NFT (you of course know that there are multiple chains selling ownership to the same NFTs, and that some people are selling NFTs of art they do not themselves own, i.e. it’s no different than selling you a certificate stating you own a star)?

You were SPECIFICALLY referring to Bitcoin AND altcoins, hence my reply regarding ETH.

I have no interest in telling you what value YOU can derive from transacting on the Ethereum blockchain since a person such as yourself probably wouldn't derive any value from transacting on Ethereum and/or holding NFT's. It's pretty obvious though, by just looking at Ethereum's transaction data and chain revenue, that there's a large number of people transacting on the network that DO derive value from doing so. If they wouldn't, they wouldn't be paying those high transaction fees. If you genuinely want to gain more insight into what value people derive from using the Ethereum network, DYOR (then again, we all know you won't because you obviously do not want to run into anything that doesn't jive with your chosen narrative, hence general dismissal is the more convenient choice). 

[mjnaus]

23 minutes ago, lkn said:

you of course know that there are multiple chains selling ownership to the same NFTs, and that some people are selling NFTs of art they do not themselves own, i.e. it’s no different than selling you a certificate stating you own a star)

Excellent point! And since we can also make copies of famous paintings, it's good thing that whole art thing was proven to be a scam. Oh wait... was it though?

[lkn]

8 minutes ago, mjnaus said:

You were SPECIFICALLY referring to Bitcoin AND altcoins

If you read what I replied to, it was a prediction that BTC would go up 100+% by the end of the year, and take altcoins with it, hence why I included that. But let us just discuss altcoins, so can you answer my questions?

 

9 minutes ago, mjnaus said:

[…] there's a large number of people transacting on the network that DO derive value from doing so. If they wouldn't, they wouldn't be paying those high transaction fees […]

Right, so it is valuable, because why else would people pay the prices? Ever heard about speculative bubbles?

 

12 minutes ago, mjnaus said:

If you genuinely want to gain more insight into what value people derive from using the Ethereum network, DYOR

Here we go again…  after five pages and proponents still can’t explain what problem it solves, anyone who doesn’t get it, is just a dinosaur who would also pooh-pooh the internet, if it was invented today, that never gets old.

 

But I know full well what value people get from coins, it is effectively a casino / lottery ticket / get rich quick scheme, but the only value being created is in the regulatory arbitrage field, but that is not enough to repay all the suckers who have put money into this scheme.

[lkn]

10 minutes ago, mjnaus said:

Excellent point! And since we can also make copies of famous paintings, it's good thing that whole art thing was proven to be a scam. Oh wait... was it though?

Nobody pays thousands of dollars for copies of art, but people pay hundreds of thousands of dollars to get their name associated with a jpeg that anyone can just right click and save to their computer.

[Neeranam]

2 hours ago, lkn said:

Why are bitcoin and altcoins destined to go up in value?

 

Do we agree that price for these coins is based on demand?

 

If so, what is causing this demand?

 

Do we agree that demand is solely because people think that if they buy today, they make a good investment, as in a year, they will be able to sell at a profit?

 

As someone who studied pure math, do you think this can go on forever?

I really only do technical analysis. I know little about supply and demand. But think about it, crypto is the first new asset since the 1600s. Every investor is now looking into buying BTC or other cryptos. Today, the market cap of BTC overtook that of Facebook. I predict that crypto will take the gold market in a 4 years. Even the biggest haters of BTC like Kevin O'Leary have turned around and now he has more Crypto than gold. Why are you intent on dissing crypto? Why all this nonsense about bubbles? You and others(The People's Bank of China etc) can't kill the Bitcoin. 

[mjnaus]

1 hour ago, lkn said:

Here we go again…  after five pages and proponents still can’t explain what problem it solves, anyone who doesn’t get it, is just a dinosaur who would also pooh-pooh the internet, if it was invented today, that never gets old.

Or, numerous of solid examples have been giving which are dismissed out of the gate without being judged on merit. But by all means; stick to your narrative. It’s pretty obvious that no matter what gets brought to the table, mental gymnastics are being pulled to dismiss it all. Who knows, maybe you simply just don’t get it and others do. I am perfect happy with that. The world is moving on, with or without that handful of oldtimers on TV. 
 

I am tapping out. Be well. 

[lkn]

49 minutes ago, Neeranam said:

But think about it, crypto is the first new asset since the 1600s

We have Beanie Babies, baseball cards, comic books, even retro video games are now speculative assets: 

 

 

55 minutes ago, Neeranam said:

Why are you intent on dissing crypto?

I am just asking what inefficiencies it removes from the existing financial system or what it can actually be used for, as I would like to understand why you guys are so hyped up about it.

 

And then I provide some context about the misunderstandings, like how El Salvador is banking the unbanked, or Ripple improving cross-border transactions with blockchain technology… but I can see how this can come across as very impolite to someone who just wants to hear “number goes up” and 100+% by the end of the year…

 

I mean, if it turns out that blockchain technology is actually useless, then you guys will feel rather foolish, when your paper wealth goes up in smoke.

 

But don’t worry, bitcoin is only 10+ years old. It also took more than a decade before people realized the internet could be used for communication and stuff… or maybe I remember that wrong, I think it was actually useful from day one, but I am sure there has been other technologies with a market cap of more than a trillion, which took a few decades to mature to the point of actually being useful for something…

[lkn]

8 minutes ago, mjnaus said:

Or, numerous of solid examples have been giving which are dismissed out of the gate

What examples? It is always the same BS — this isn’t even the first post that claims to have already explained what it is useful for, but not linking back to *any* comments that actually explains anything. It’s is always just “if you don’t get it by now, you will never get it”.

 

There has of course been the false claims, like how RippleNet improves cross-border transactions, where I have provided interview with Ripple CEO that refutes that, or how El Salvador is adopting bitcoin, but it actually more looks like a money grab from their “president”, etc.

[sucit]

22 minutes ago, lkn said:

We have Beanie Babies, baseball cards, comic books, even retro video games are now speculative assets: 

 

 

I am just asking what inefficiencies it removes from the existing financial system or what it can actually be used for, as I would like to understand why you guys are so hyped up about it.

 

And then I provide some context about the misunderstandings, like how El Salvador is banking the unbanked, or Ripple improving cross-border transactions with blockchain technology… but I can see how this can come across as very impolite to someone who just wants to hear “number goes up” and 100+% by the end of the year…

 

I mean, if it turns out that blockchain technology is actually useless, then you guys will feel rather foolish, when your paper wealth goes up in smoke.

 

But don’t worry, bitcoin is only 10+ years old. It also took more than a decade before people realized the internet could be used for communication and stuff… or maybe I remember that wrong, I think it was actually useful from day one, but I am sure there has been other technologies with a market cap of more than a trillion, which took a few decades to mature to the point of actually being useful for something…

You are actually asking the question “what problems does crypto solve”? Bro. 

 

1 hour ago, lkn said:

Nobody pays thousands of dollars for copies of art, but people pay hundreds of thousands of dollars to get their name associated with a jpeg that anyone can just right click and save to their computer.

You know what I love most about crypto, people pay when they are wrong. It’s not like Covid or any other topic we deal with, where if you are wrong nothing happens. Because rest assured there was a guy five years ago, saying the same things you are saying, but Bitcoin somehow managed to be the best performing asset. This isn’t too tough to figure who’s on the wrong side but to each their own. 

[mjnaus]

4 minutes ago, sucit said:

This isn’t too tough to figure who’s on the wrong side but to each their own. 

Spot on. However, thick heads are tough to crack. These same people have been peddling the idea of how the music is going to stop any time now. And they have been beating this drum for a decade now. Yet, here we are… 

[Neeranam]

2 hours ago, lkn said:

We have Beanie Babies, baseball cards, comic books, even retro video games are now speculative assets: 

No, cryptos are the first real new asset class since equities in the 1600s. You are being silly. 

[lkn]

1 hour ago, sucit said:

Bitcoin somehow managed to be the best performing asset

Yes, it’s fascinating. But are you familiar with OneCoin? That was a ponzi scheme posing as crypto, it’s estimated that people paid $4 billion until it got shut down by the authorities.

 

Wonder how much they could have gotten, had the authorities not stepped in. Before it was shut down, it was also a very well performing asset. And so was BitConnect for that matter…

 

Are you familiar with Tether? They have issued $70 billion worth of USDT tokens, which have been used to buy up coins. The idea is that you can always redeem one USDT for one USD, the problem is, Tether itself will not redeem these, so you can only redeem it for USD if someone is willing to pay you. Fortunately for Tether, for now, people are holding on to their USDT, and allowing Tether to “print money” as they like.

 

Are you familiar with HEX? This is so obviously a scam to make Richard Heart rich, but it has a market cap of $70 billion. Why are people putting money into this? Because those $70 billion are just not there, a lot of the HEX tokens were just an air drop to existing bitcoin holders.

 

Are you familiar with the thousands of coins that went through a pump and dump, and are now worthless, but made their founders rich? Why did anyone buy these coins in the first place? And why do people continue to buy coins that are created to make the found rich.

 

Take Million Token coin by TechLead. See the YouTube video where he introduces it, the coin had no purpose other than make people millionaires by buying the coin, because there will only be one million coins, so when people buy, it will increase demand, and the price will go up. That is, until people wanted to cash out, and now it’s worth only a fraction of when many bought it, and TechLead increased his fortune…

 

There are just so many scams out there, but people continue to put money into this, because of FOMO. People are still investing in SafeMoon for God’s sake…

 

Binance is an unregulated offshore exchange that is under scrutiny (and banned) by many jurisdictions (incl. the U.S.). You cannot withdraw money from Binance and into your bank account, and yet, they have a daily volume of around $30 billion.

 

All these numbers are crazy when you consider that this is just people buying and selling tokens that have no underlying value, in the hope of getting rich.

 

This is not like the stock market. When you buy stocks, you actually buy a share in an actual company that is hopefully profitable (or you expect it will be), and your share effectively entitles you to future profit from this company.

 

I am fascinated by how people are throwing money after crypto, even though no-one can actually explain what it is good for, and nobody uses it in real life. It’s all based on FOMO. You are completely right that it has been the best performing asset, but Madoff also beat the market for twenty years, until it turned out to be based on fictitious numbers.

 

Often people just need some vague explanation of why a scheme works to make them rich, and they are all in. We have seen people fall for “get rich quick” schemes all through history.

 

Crypto is new though in the sense that this was never planned as a pyramid scheme, and there are no central entity behind it, but today it very much works like a pyramid scheme, and some players (like Binance and Tether) do what they can to keep it going (i.e. wash trades and unbacked USDT to keep the price going up).

 

Crypto is also new in the way that this can basically reach the entire world, this means the pool of “greater fools” is surprisingly large, so while regulators are very slow to act, I almost think that regulation is what will eventually cause the market to crash, but I am very hesitant to make any bets on the future of crypto.

[ThailandRyan]

US Bank Launches Cryptocurrency Custody Services Amid Strong Demand From Institutional Clients – Featured Bitcoin News

 

Seems the banks think otherwise of Crypto assets @GrandPapillon and @lkn

[Neeranam]

1 hour ago, ThailandRyan said:

US Bank Launches Cryptocurrency Custody Services Amid Strong Demand From Institutional Clients – Featured Bitcoin News

 

Seems the banks think otherwise of Crypto assets @GrandPapillon and @lkn

Indeed, banks are not stupid. 

[mjnaus]

47 minutes ago, Neeranam said:

Indeed, banks are not stupid.

No, they’re not stupid. They’re just slow to catch on. As many of them were spouting the same rhetoric as the likes of @GrandPapillon and @lkn for quite a few years. However, to date the majority have come around, knowing this industry is here to stay and are now working internally on crypto projects.

 

Like those banks, people will come around eventually. Some sooner than others.

 

As I and others have mentioned before, the world is moving on. And a hand full of oldtimers having trouble coming to terms with the new reality isn’t going to make a difference.

[mjnaus]

And of course Bank of America is just as clueless as everyone else who thinks the industry is here to stay: https://decrypt.co/82573/bank-of-america-bullish-bitcoin-ethereum-defi-nfts

[Neeranam]

7 minutes ago, mjnaus said:

No, they’re not stupid. They’re just slow to catch on. As many of them were spouting the same rhetoric as the likes of @GrandPapillon and @lkn for quite a few years. However, to date the majority have come around, knowing this industry is here to stay and are now working internally on crypto projects.

 

Like those banks, people will come around eventually. Some sooner than others.

 

As I and others have mentioned before, the world is moving on. And a hand full of oldtimers having trouble coming to terms with the new reality isn’t going to make a difference.

I see Arab bank Switzerland is integrating Tezos! 

 

https://cointelegraph.com/news/arab-bank-has-chosen-tezos-to-facilitate-institutional-custody-service

[Neeranam]

Just now, mjnaus said:

And of course Bank of America is just as clueless as everyone else who thinks the industry is here to stay: https://decrypt.co/82573/bank-of-america-bullish-bitcoin-ethereum-defi-nfts

Maybe they didn't consult lkn

[ThailandRyan]

1 minute ago, Neeranam said:

I see Arab bank Switzerland is integrating Tezos! 

 

https://cointelegraph.com/news/arab-bank-has-chosen-tezos-to-facilitate-institutional-custody-service

And a few more countries as well.

[ThailandRyan]

https://www.benzinga.com/markets/cryptocurrency/21/10/23253609/amc-begins-accepting-dogecoin-for-digital-gift-cards

 

AMC Entertainment Holdings Inc CEO Adam Aron said Tuesday that the theater chain will accept Dogecoin DOGE for the sale of digital gift cards.

 

What Happened: Aron announced on Twitter that AMC will sell digital gift cards up to a value of $200 a day with DOGE and other cryptocurrencies using a BitPay Wallet.

[Neeranam]

Btw, when I posted this last Friday, bitcoin was $43,300. Now it is $51,700 ????