How on earth does Solana crypto coin have a 70bn valuation?

[lkn]

7 hours ago, mjnaus said:

Fine. ETH held in a wallet isn’t not a productive asset. Stake ETH is. Semantic bickering IMO, but whatever.

And yet, a few posts ago, you were the one saying “Close, but no cigar. It’s the ETH that generates the yield, not the smart contract”. For God’s sake, don’t continue to state that the other party is wrong, and when it turns out you are the wrong party, call it all semantic bickering.

 

And it is actually not just semantic bickering, when we know what generates the yield, we can then analyze if that yield is sustainable, or what asset is actually the one that might be in demand, etc. We can’t evaluate things when it’s all just wishy washy hand-wavy stuff.

Edited November 9, 2021 by lkn

[lkn]

10 hours ago, mjnaus said:

No, that is obviously NOT what keeps people away. The $2.5mil/hour I referred to is the cost of sustaining a 51% percent attack per hour, however this only refers to maintaining the needed hashrate. This does NOT include the capital requirements for building the infrastructure needed to perform the attack. 

What you are saying is just that with depreciation the cost for a transaction is much higher than $55.

 

You say you are surprised I do not understand this stuff, because it is simple math: But I started by making a very simple statement about the cost of producing the blockchain being proportional to the security of the chain, and therefore also related to the value protected by the chain. You initially refused to agree with this obvious truth, but after many posts, it seems you do understand it is outrageously expensive to run the chain, and you also seem to  understand that it is this high price that keeps it secure. But I don’t know if you have yet come to the conclusion that somebody needs to pay for this? You can do it directly via transfer fees, you can do it indirectly via mining rewards (which in theory puts the cost on all holders instead of those doing the transactions), but regardless of how you do it, somebody needs to pay.

 

Of course you can also subsidize it with VC, which is effectively what is being done by all the retail investors buying crypto tokens as investments, not realizing that they are more or less just paying the electricity bill for the miners.

[lkn]

31 minutes ago, lkn said:

And it is actually not just semantic bickering, when we know what generates the yield, we can then analyze if that yield is sustainable, or what asset is actually the one that might be in demand, etc. We can’t evaluate things when it’s all just wishy washy hand-wavy stuff.

Furthermore, we can now better evaluate past statements about how value is supposedly being created by buying and holding crypto tokens: If what you meant was buying tokens and locking them up in a staking contract, then this is actually not creating value, it is just debasing the currency.

 

E.g. if I issue my own currency and give it to ten people. Then I tell five of them that they can put it in a fixed deposit account that I manage, and I give them 8% interests for this, and those interests are achieved by me simple issuing more currency, then I am not creating value. And yes, I can “destroy” some of the already issued currency to keep the supply stable (your “sound money”), but that just stops the inflation, it still doesn’t create any value.

[mjnaus]

1 hour ago, lkn said:

And yet, a few posts ago, you were the one saying “Close, but no cigar. It’s the ETH that generates the yield, not the smart contract”. For God’s sake, don’t continue to state that the other party is wrong, and when it turns out you are the wrong party, call it all semantic bickering.

 

And it is actually not just semantic bickering, when we know what generates the yield, we can then analyze if that yield is sustainable, or what asset is actually the one that might be in demand, etc. We can’t evaluate things when it’s all just wishy washy hand-wavy stuff.

Man, this is getting tiring. 

 

Let me try this again. I take 96 ETH and stake it on the Beacon chain. As a reward I receive 4.8 annually (0.4 ETH monthly). These rewards are paid directly from a portion of the transaction fees on the network. Voila; cashflow generated by ETH.

 

If you're still arguing that it's the staking contract that generates the yield, which is akin to making the non-sensical statement that it's my stock broker account that's paying me my dividends as opposed to the stocks held in the account, I don't know what to tell you other than we should all be thankful you're not working in financial services. 

[mjnaus]

1 hour ago, lkn said:

What you are saying is just that with depreciation the cost for a transaction is much higher than $55.

 

You say you are surprised I do not understand this stuff, because it is simple math: But I started by making a very simple statement about the cost of producing the blockchain being proportional to the security of the chain, and therefore also related to the value protected by the chain. You initially refused to agree with this obvious truth, but after many posts, it seems you do understand it is outrageously expensive to run the chain, and you also seem to  understand that it is this high price that keeps it secure. But I don’t know if you have yet come to the conclusion that somebody needs to pay for this? You can do it directly via transfer fees, you can do it indirectly via mining rewards (which in theory puts the cost on all holders instead of those doing the transactions), but regardless of how you do it, somebody needs to pay.

 

Of course you can also subsidize it with VC, which is effectively what is being done by all the retail investors buying crypto tokens as investments, not realizing that they are more or less just paying the electricity bill for the miners.

This is going to be my last reply on the subject. The pointless going around in circles is just not worth it.

 

I never said nobody pays for security of the chain. It's these non-sensical assumptions that makes it feel I am arguing with a 10 year old. It's painstakingly obvious that securing the chain costs money and that this security is paid for by transaction fees and new coin issuance (block rewards). I also never stated that this is cheap; it is obviously not (one L1's that is, L2's is a different story). Which is fine, as a higher security budget allows for better security. Fall out of this is a short term problem, or long term depending on the specific chain and the use case the chain is chasing.

 

I honestly have lost what it is you're trying to argue at this point. It seems you're just continuing this simply for the sake of the argument. All you're doing right now is making painstakingly obvious statements that nobody has argued against. I certainly haven't. Perhaps we agree more than we think? I don't know. Anyhow, throwing in the towel for now. Enjoy the remainder of your journey and for God's sake, try and keep an open mind (saying you do obviously isn't quite the same as actually doing so ????). 

Edited November 9, 2021 by mjnaus

[lkn]

REMOVED DOUBLE POST

Edited November 9, 2021 by lkn

[lkn]

1 hour ago, mjnaus said:

I honestly have lost what it is you're trying to argue at this point

That the cost of running the network should be higher than the value secured, making blockchain useless for bank transfers (as have been claimed in this thread, that it is being used for). Of course there are more than just one reasons.

 

I also see a clear pattern going in circles, the problem seems to be that we are pretty much in agreement on the micro-level, but vehemently disagree about the macro-level implications. For example, we agree about the dynamics of creating yield on the staked ETH (although now you just retracted your previous agreement of what is currency and what is a bond), but not how this actually creates real world value, we agree that it is outrageously expensive to run a blockchain, but not on whether or not users of the chain will end up paying for it, etc.

Edited November 9, 2021 by lkn

[GrandPapillon]

cash flow doesn't come out of thin air, yet claiming to get some kind of yield on a crypto that has a calculated value out of thin air, is exactly that, cash flow out of thin air ????

 

how can anyone with any basic understanding of finance or common sense fall for that kind of fairy tales?

 

I mean we have the Madoff precedent, but here we are on a whole new level of gullibility ????

[mjnaus]

29 minutes ago, GrandPapillon said:

cash flow doesn't come out of thin air, yet claiming to get some kind of yield on a crypto that has a calculated value out of thin air, is exactly that, cash flow out of thin air ????

 

how can anyone with any basic understanding of finance or common sense fall for that kind of fairy tales?

 

I mean we have the Madoff precedent, but here we are on a whole new level of gullibility ????

I know, right? Magical times we’re living in eh? ????

[lkn]

6 hours ago, GrandPapillon said:

cash flow doesn't come out of thin air, yet claiming to get some kind of yield on a crypto that has a calculated value out of thin air, is exactly that, cash flow out of thin air ????

Sometimes the simplest explanation is the best explanation ????

 

In previous post I called the smart contract a productive asset, but having given it some more thoughts, I think that I was wrong, it resemble a work contract more than a bond, but payment for the work happens by diluting the number of ETH.

 

So yes, if you have 51% of ETH and you stake it all, your ratio of ownership of the entire pool will grow faster than the rest of the ETH holders’. But nothing is produced, and if you only have a small fraction of the total ETH, even if you stake it all and receive new ETH as yield, your ratio of ownership in the entire pool can still shrink.

 

But they have been working on this since at least 2015, so I am sure it will be solid, when they switch to it next year, unless they postpone, like they have done four times in the past…

[GrandPapillon]

smart contracts are nothing more than a shared repository of automated rules, no matter how crazy those rules are

 

basically what we used to call a batch "scheduler" in IBM mainframes, that is some process would be triggered by some computer events and completion messages would be sent to other mainframes when done ????

 

how certain tech revolution repeat themselves ????

Edited November 9, 2021 by GrandPapillon

[GrandPapillon]

27 minutes ago, lkn said:

But they have been working on this since at least 2015, so I am sure it will be solid, when they switch to it next year, unless they postpone, like they have done four times in the past…

amazing how they can keep a straight face when they make such announcements ????

 

probably thinking "poor suckers will buy it again" ????

Edited November 9, 2021 by GrandPapillon

[The Hammer2021]

On 11/6/2021 at 10:16 AM, davidst01 said:

Amusing the way you think. 

 

You really think Eth is gong to die? It has some of the smartest brains in IT working on it. Yes there might be a software bug or 2 along the way (eg Kriptokitties) but these bugs can be fixed. Do you really think these developers are so stupid that the whole ethereum ecosystem will die and be worthless??

 

Meanwhile you are missing out on incredible gains in ethereum price. With all the people staking at the moment and limited supply the price is only going up. When Ether2.0 goes live yes the price will tank as there will be a lot of sellers. Meanwhile you LOSE on incredible capital gains just to earn 120 euro?????

50 Thousand euros a year

[kellyk11]

People scratch their heads at crypto valuations when they don't understand how fractional reserve banking works. 30% of people think that the money they deposit in a bank is the same money people take out when they get a loan. They have no idea how much banks expand the money supply.

 

Governments are pushing us towards hyperinflation with huge spending projects. Getting out of the USD, GBP, makes sense in that context. People seem to have given up on Gold and Silver. Crypto is more easily transferred.

 

I bought some SHIB INU for a laugh and it went up x10. With the proceeds I am trying out distributed exchanges. You can get burned, or you can make out like a bandit.

 

 

 

[Neeranam]

Here's some of the top earners in crypto in the last year. 

 

[advancebooking]

Time has rolled on and the SOLANA <deleted> coin is down to 8.8 billion. Glad I didnt buy any