
Ether Is the Digital Currency of the Moment - mathgenius
https://www.nytimes.com/2017/06/19/business/dealbook/ethereum-bitcoin-digital-currency.html
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opcon
Previous discussion:
[https://news.ycombinator.com/item?id=14591097](https://news.ycombinator.com/item?id=14591097)
(from 12 hours ago)

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hedgew
I'm so, so skeptical of the current cryptocurrency valuations.

$200 mil for a browser with no users.

$1.5 billion for a coin that was twice renamed to hide that it was premined.

$500 million for a Reddit with less than 1/10000 of Reddit's users.

$30 million for PotCoin.

$350 million for DogeCoin.

The list goes on and on. If BAT was a normal company, would someone buy them
for $200 million? Would someone pay $500 million for Steemit? These valuations
sound insane, but that is what people are paying.

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LMYahooTFY
I'm slightly confused.

Can you compare a currency market cap in USD to a company valuation??

Who is "buying" a cryptocurrency....?

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andruby
You could compare it with _funding_ valuations, which is different from
_buying_ a company at a certain valuation.

Eg: If a company has 200M shares, and someone pays $1/share during an
investment round, the company (and the press) will mention that the funding
was done at a $200M valuation.

The same logic is done to calculate crypto currency market cap. If there are
200M coins, and someone somewhere pays $1/coin, the market cap is reported at
$200M. This is, however, the total value of all coins of that currency. Often,
the person(s) or company that created a coin won't own most coins (unlike with
company shares).

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LMYahooTFY
I see the similarities there. However, isn't there a fundamental difference in
stock valuation and a currency?

The currency can't "go out of business", as it's entire existence is a
speculation. Anyone using a given currency speculates that it will be accepted
tomorrow.

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andruby
Good point. That is indeed a fundamental difference.

It probably also points to a large difference between a new blockchain
_Currency_ and a token _Asset_. The latter often being a proxy for company
shares in an ICO.

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LMYahooTFY
Was this the idea underlying the DAO? I haven't read much into it, but my
impression was that it was essentially mandating signatories to a contract in
order to make desired changes. Using this crypto-tech would make it impossible
to circumvent and screw another party.

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lawless123
Ethereum is interesting.

Ether as currency is a disaster waiting to happen.

[https://medium.com/startup-grind/i-was-wrong-about-
ethereum-...](https://medium.com/startup-grind/i-was-wrong-about-
ethereum-804c9a906d36)

People are speculating on it because they have confused companies using the
technology as using the currency itself.

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hrkristian
Isn't this _exactly_ what people were saying about BitCoin as well?

BitCoin has a genuine inherent worth now and while it's still not nearly large
enough to fend off crashes, it's there and it's growing. I don't see the
argument for why Ethereum is _different_ in this respect.

Perhaps I'm just not getting the real point of the linked article?

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rsynnott
> BitCoin has a genuine inherent worth now

Does it? Why? I mean, people currently want to buy it, but then in the early
to mid noughties people wanted to buy securitised junk mortgages; simply
having a potentially temporary demand does not mean it has an _inherent_
worth.

If anything, it has less of a worth than before, in that its "success" has
made it largely useless for actual transactions. Look at the current costs to
actually get anything through; it's stormed past SEPA and threatening to hit
Western Union levels of expense (it's already exceeded Western Union and
friends for small transactions). What is it _for_?

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Eerie
>simply having a potentially temporary demand does not mean it has an
_inherent_ worth.

Just to serve as devil's advocate here:

 _Nothing_ has an _inherent_ worth, unless you postulate the existence of
"worth" as an immaterial label, like "soul".

BitCoin clearly has worth to some people right now. They keep buying it.

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Tactic
There are many things that have an inherent worth. This inherent worth stems
from their utility. Land will always have a certain amount of worth because
you need to put things in locations. Metal has a worth because you can build
things with it.

That worth may fluctuate and it may not be worth something to you in
particular, but it has a value.

Cryptocurrencies only have worth because they have demand, not utility. There
is not inherent worth based on their existence. This doesn't make them less
valuable, it just means their value isn't inseparable from what they are.

But one can always invalidate arguments by taking to them to the extremes.
After all, you can't prove anything exists, so how can any of it have inherent
anything?

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davidivadavid
"This inherent worth stems from their utility." Ergo, it's not inherent.

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sanswork
As someone that has been openly critical of bitcoin in the past it's funny to
see the bitcoin communities response to other cryptocurrencies while claiming
anyone that doesn't buy into their coin is clearly just unintelligent or
unable to comprehend technology and the future.

I'm reminded of the joke about the atheist and the christian where the atheist
says to the christian "We believe in basically the same thing. I just believe
in one less god than you".

I'm still yet to see any cases where any of these coins or tokens perform
better than a centralized system(and can continue to perform better at similar
utilization) or where the value of the distributed system is worth more than
the cost of distributing it. But I've been surprised by the communities before
so maybe I will be again.

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Cakez0r
> I'm still yet to see any cases where any of these coins or tokens perform
> better than a centralized system(and can continue to perform better at
> similar utilization) or where the value of the distributed system is worth
> more than the cost of distributing it.

Silk road?

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sanswork
Yeah sorry I meant legal. If you're running an online drug market or a
cryptolocker extortion scheme it is probably the best solution.

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discombobulate
Supporting Wikileaks when the US government wanted to defund them.

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sanswork
I'd say it didn't do that great of a job of that since if my memory serves
right(I ran the numbers a few years ago on their early donations) they didn't
really receive that much from bitcoin donations. Likely because it was a pain
to get bitcoin at the time so it severely limited the number of potential
donors.

They would have made a lot if they held them all to today but back when the
donations peaked 100btc donation was $600.

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discombobulate
Fair enough. You'd agree it's a valid use case, though?

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sanswork
Yes definitely.

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DiabloD3
I don't know why anyone really talks about Ethereum. The community basically
just goes around saying "Bitcoin is dead" and tries to get you to buy Ethereum
as if it's some sort of pyramid scheme.

No thanks.

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aiyodev
Well, there's this, for example:

[http://www.coindesk.com/united-nations-sends-aid-
to-10000-sy...](http://www.coindesk.com/united-nations-sends-aid-
to-10000-syrian-refugees-using-ethereum-blockchain/)

Not a pyramid scheme.

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MichaelGG
That's not Ethereum the thing that's being traded. That's "ethereum" the tech.
Using that terminology, we should call most altcoins "Bitcoin".

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qertoip
Fundamentals are firmly behind Bitcoin. Ethereum is proven to be essentially
more centralized and essentially less immutable ledger. That being said the
experiments carried out by the Ethereum community are extremely valuable and I
am keeping my fingers crossed for them.

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sanswork
I think one problem a lot of people in the cryptocurrency world have is
overvaluing immutability/expecting most people to demand it. Most people don't
want immutable payments. If you're the consumer it is never a good deal and
most people are consumers.

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nileshtrivedi
Nothing stops people from building centralized organizations ( "banks")
providing _reversible_ transactions on top of an immutable payment platform.

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Retric
Banks can't survive on immutable currency. They get out competed by those who
take more risks, until the risk takers fail.

And FDIC style insurance does not work with a fixed currency, so you don't
want to use these banks.

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erikb
I love how Ether's PR department really pushes the limits of public opinion.
But if you look at it cleanly it seems if at all, people are moving to Bitcoin
for the time being. (Honestly I'm surprised that there is anybody willing to
try crypto currency who hasn't tried it in the last 5 years already).

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someSven
Simple question every investor should ask himself: How many Bitcoin tokens
exist and how many of Etherum?

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simias
It's sucks that it's so difficult to have a level headed discussion about the
technology behind cryptocurrencies online. There's too much money involved,
and money kills rationality it seems.

I've been looking into cryptocurrencies a bit lately and from a technological
standpoint it's exhilarating. Witnessing the internet centralize itself more
and more around big platforms this past decade, it really is a breath of fresh
air to see those highly complex and advanced distributed systems. And
technology-wise ethereum is really an amazing concept on its own.

There's also so much left to do! How will those systems scale up if they're
supposed to replace "fiat" currency and your Visa card? Currently that's a big
debate in the Bitcoin community, with the push for Segregated Witness support
while other petition for increased block sizes etc...

But because there's so much money at stake the technical discussions are
surprisingly rare. For something that's mostly "just code and maths" it's
insane to read all these discussions where so many people throw around
unsubstantiated arguments when it's not complete FUD. As far as I can tell
Bitcoin forums these days look more like a conspiracy theory subreddit (or
alternatively a political subreddit, is there a difference nowadays?) than
hacker news.

Is there a cryptocurrency out there that's more about experimenting with the
technology rather than a Get Rich Quick scheme? If I had more time I think I'd
just start writing my own coin miner from scratch just to see how it works in
details.

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pg_bot
Whenever I read about digital currencies I get a sinking feeling. Everything
about them raises red flags in my brain that this is an asset bubble that will
pop. All of these currencies have drastically appreciated in the past few
months without anything fundamentally changing. A series of companies have
ridden the wave based on black box tech that few people understand. I've had a
few friends who are looking to make a quick buck ask me for my opinion on
cryptocurrencies.

The only benefit (IMO) of using a cryptocurrency is the ability to participate
in the black market. The current financial system for all its warts does a
good job at facilitating trade.

My advice would be to treat any speculation into digital currency as gambling.
Don't spend any money you can't afford to lose, take some money off the table
if you happen to be winning.

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flowless
The thing is - there is no black box tech. Bitcoin paper is so clear you can
explain the tech behind Bitcoin to a person in few minutes/hours depending on
their math background.

Same holds for virtually any cryptocurrency although the tech gets a bit more
complicated (for example zero-knowledge proofs used by Zcash are not that easy
to comprehend and explain).

There are many benefits of cryptocurrencies, one of them is IMHO pretty
important - it is much harder to manipulate the prize of currency, or to
create new amounts of currency at will - everything is backed by math and
computational power.

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bdz
As someone who build gaming PCs: the Ethereum craze is destroying the GPU
market. The AMD RX 470/570 and 480/580 are so good for mining that when on
sale they sell out instantly everywhere and goes above $100-150 the MSRP on
eBay. And now people who sold their AMD cards buying up the Nvidia GTX 1070s
which is the best obvious upgrade... It's just crazy

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vbezhenar
After hard fork to cover their failure, Etherium lost my support. Bitcoin is
much more solid in that aspect.

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legulere
Does Ethereum solve Bitcoin's core problems? increasing usage leads to
transaction fees becoming prohibitively expensive, bitcoins get stolen
regularly without any way to get them back, bitcoins are often used for
illegal transactions and tax evasion.

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vbezhenar
Those aspects might be problems for you, but for me they are huge advantages,
for example. If there's no way to get stolen bitcoins back, it means that
there's no way to stole properly secured bitcoins. If they can be used for
illegal transactions, I can help dissidents, for example. And tax evasion is a
good thing as well.

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joosters
Isn't that just a circular definition? Bitcoins get stolen in increasingly
different ways, then people say that they weren't properly secured. 'Be your
own bank' is not actually a good feature.

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jacquesm
This has been posted 5 times in the last 24 hours, I think I got it the first
time.

