> "You can believe that 99% of crypto is bullshit while also believing that the 1% that isn't will change the world"
Is this a quote from someone?
Because you can believe anything, believes are not a good method to find what is truth. But it is part of the pump and dump strategy, make people believe that something is valuable and them dump on them all your worthless assets.
It's from Preston Byrne (added this in my original comment).
The reason I think it's relevant is that posts like Palmer's attack only the "scam side" of crypto (the 99%) without acknowledging the "new paradigm" (1%) side
Yes there are scams, yes there are pumps and dumps, yes there are insiders who control too much liquidity. But you also have to do justice to the promise of the tech.
It was not previously possible for anyone with an internet connection to take out a loan via a decentralised protocol (MakerDAO), or exchange assets via a decentralised contract (Uniswap), or have a digital proof of authenticity (NFTs). And all of this without middle-men taking fees, opaque leverage throughout the system (see Archegos) and gating access to only certain participants (the richer half of the world who have a bank account).
Looking forward to the responses handwaiving your comment and saying these aren't real use cases, they don't solve anything, you don't need this stuff unless you're doing illegal activity, tradfi is better, only reason they exist is to better enable scams, [insert any other ignorant argument].
It really is hilarious how similar the naysaying here is to the internet/email says.
Change the world in some as-yet undiscovered way? I have much less than 1% confidence that any of the crypto ideas I've heard so far will change the world.
My wife and I paid off our student loan debts with a 0% interest loan and no need to go through a bank. Our position is well over-collateralized and interest generated from other DeFi lending positions will pay off the loan in full.
Not to mention, Ethereum as a settlement layer for stablecoins is gaining exponential adoption. There's a non-insignificant chance it disrupts the traditional banking rails (i.e. ACH, wire, SWIFT, etc.).
I take this comment to mean that you had crypto investments that worked out well for you, and then you took a DeFi loan against them to pay off your student loans?
If so, that doesn't seem that groundbreaking. You could have simply liquidated enough of your gains to pay your student loans off. Instead, you're now in a leveraged position. It's very possible that your collateral could drop below the LTV threshold, causing a liquidation, which would magnify the losses you'd have if you weren't levered. There's no free lunch.
It's certainly interesting that DeFi creates new schemes for creating leverage, with minimal intermediation, but I wouldn't call it groundbreaking. It's an incremental development in financial engineering.
EDIT: read some of your other comments that you made while I was writing mine. It sounds like you're using stablecoins as your collateral, which seems like a smart move, and you've effectively converted your student loan into a DeFi loan at a lower rate. But I'd still be concerned that while your more mundane risks aren't that high (like asset prices and interest rates), you may have exposure to more complex risks.
Why move the goal posts, they weren't speculating on “price go up”, they took a capital efficient loan from an automated world bank instead of dealing with a boutique lender that wastes everyones time
Your edit captures the situation pretty well. I used stablecoins as collateral and this was effectively a migration of the debt on my balance sheet to a lower (even negative) interest rate.
And yes, there are definitely risks; it's not for everyone!
...if you paid it off with an over-collateralized loan, then surely you must have already had enough money to pay it beforehand. Also may I ask what DeFi platform facilitates 0% loans? I thought they all had some low interest
I did have sufficient funds but drawing a loan is more capital efficient. I responded to another comment in this post explaining why.
Also, this was not my scenario but a common view: it can make sense to draw a loan so that you're not liquidating long-term holdings. Imagine I hold $100k in bitcoin and need to pay off $15k in student debt. If I sell my BTC, I'll incur capital gains tax and also have a smaller long-term holding. Alternatively, I can borrow $15k against the BTC, pay no tax, and keep my BTC position in full. There are various ways to then generate interest on the BTC and pay back the borrowed funds.
Some platforms offering 0% loans include Liquity and Alchemix.
I mean given crypto coins are going to the moon, every payment they make will have a higher USD(T) value than before. Deflationary currency is great for lenders!
In fact this “DeFi” thing should have a negative interest rate to compensate for the fact that this borrower will be paying them more and more each payment.
I'm not disputing that it's made some people rich by allowing them to place big bets, but I don't think that's world changing. So did Bernie Madoff if you were lucky enough to get out early.
And I'm not increasing my overall debt position on my personal balance sheet. Rather, I shifted the debt from student loans at ~5.5% to a DeFi protocol where the borrow rate is effectively negative.
Your use-case sounds really interesting. Would you mind elaborating a little bit more? Sounds like you’re using compound.finance or liquity in some way …
I do use both of those protocols, but for this specific use case I'm referring Alchemix. I deposited $30k DAI and borrowed $15k alUSD against the deposit. Traded the alUSD for USDC and withdrew through Coinbase.
I didn't go into detail in the initial post since it sounds a bit crazy, but the loan will actually pay itself off since Alchemix is depositing my $30k into Yearn. The yields generated from Yearn gradually pay down my debt automatically. Other interest bearing positions (apps like Compound and "yield farming" on various new protocols) will also help me pay off the loan faster.
The alternative to this is that I could've taken $15k from the initial $30k and paid off our loans outright. But, using Alchemix is more capital efficient. Student debts are now paid and I also have $30k of capital generating yield instead of only $15k if I had simply paid the loans upfront.
How did you come to trust Alchemix with that much capital? I'm not familiar with them, but just checking their site doesn't give me a lot of confidence about sending tens of thousands of $ to them.
It's all open source. You can see the contracts yourself, or read an audit that someone else created. The beauty is that you don't have to trust them, because you can see exactly what can possibly happen with your money by looking at the code.
My collateral is currently yielding 6.5%, which is gradually paying down the debt. At this rate, estimated maturity is 02/28/2029. This will vary depending on APYs for DAI in the Yearn protocol. But personally, I'll use other income streams to pay it off much sooner.
Bitcoin has been around longer than the iPhone. When it started I think we were all still in Windows XP.
If Bitcoin hasn’t yet discovered a killer app, when will it?
But yeah yeah, it took tens of thousands of years between humans seeing lightning start fires and the charcoal grill… if it took that long, I'm sure it will be tens of thousands of years before Bitcoin finds a use. Better keep buying and holding!
Well, it was pretty early days: Bitcoin was released a few months after the iPhone got an app store, and a few months before the iPhone got copy & paste functionality.
That’s kind of like saying “the Nokia brick phone has been around forever, if it hasn’t discovered a killer app, when will it?”
Bitcoin was just the first blockchain to really find adoption, it’s nowhere near where 99% of the innovation in crypto is happening today. Far more interesting projects that are providing actual value today.
For permanent storage you should check out https://www.arweave.org/ rather than IPFS + centralised pinning services like Pinata. With Arweave you pay a small upfront fee to have the network store your file forever.
It's the promise of IPFS+Filecoin but actually live and being used (eg by the Internet Archive). There's some decent tooling & docs for it too: https://github.com/ArweaveTeam/arweave-deploy
Looks like you may be able to use IPFS addresses with data stored in Arweave so that Arweave becomes effectively one of the several redundant hosts you might use with IPFS, if I understand it right.
"This Arweave+IPFS bridge allows you to have truly permanent backing of your data using Arweave, while also making it available in IPFS." [1]
Filecoin is live and being used, could you clarify what you mean? See eg Textile, Fleek, etc. It is currently storing ~20 PiB across ~1 million storage deals, according to https://storage.filecoin.io.
I read the Filecoin docs and it completely fails to explain the economic incentive. Can someone fill me in? Miners receive Filecoins as reward for storing people's data, who pay Filecoin to access their files. So... the only use for Filecoin is to gain storage access? Why would a miner, who by definition has storage, want a currency that can only buy more storage? Is there something else one can buy with Filecoin? According to Coinbase, Filecoins are "worth $50", meaning they can be traded for dollars?
People who want storage but don't have it must first buy Filecoin, which creates a market to exchange Filecoin to and from other (crypto or not) currencies. Miners sell their Filecoin on that market.
the fee pays into an endowment. the endowment is only paid out to miners if the block reward in USD terms is too low to justify storing the full weave.
the size of the fee is a function of 1) the amount of data you wish to store and 2) the estimated cost of storing the weave between the current time and the end of the storage period ("forever" is actually assumed to be about 200 years for these purposes).
If you were to store 100 TB on the weave tomorrow (the weave is currently 10TB), the block reward would remain the same, but the endowment payout would trigger much sooner.
The endowment fees are sized with the assumption that the endowment will have to pay out immediately and until the end of the 200 year period.
Ah, that makes sense. I think their 'sales pitch' would be more compelling to more technical users (which I assume is the main initial demographic) if the 'forever's had asterisks and the 200+ year assumption was prominently displayed on landing page.
That shifts my expectations from "economically infeasible lie" to "small fee may not be so small, but feasible with proper stewardship and valuable for certain use cases."
In the crypto/DeFi space, superlative marketing copy is more likely to be interpreted as 'potential scam' than other domains IMO.
DeFi protocols don't have KYC/AML systems. All they know about is your wallet, and from that wallet you can buy any token, borrow/lend, add liquidity to a market-maker pool, etc.
The goal of regulators should be to stop people from taking advantage/scamming others, not to stop innovative financial products from being built.
Defi protocols (at least on eth) are open source, so I can verify that they are doing what they are supposed to be doing and use those products. It would be far from ideal if some regulator decided that we can't use it because reasons x,y,z.
Regulators have far broader scope for regulation than just to ensure that people are not taken advantage of or scammed.
They don't stop innovative financial products from being built, they might stop them from being used for a particular purpose or even at all depending on how a particular development impinges on the list of items for which they regulate.
Amongst others, and depending on where you live your local regulators may add or subtract from this list considerably:
That list was developed for traditional finance. After messing around with DxDy protocol, i learned that literally all of those point are impossible. Also, how would you shut them down if they don't comply - It's a smart contract on eth. Even if you arrested everyone involved, it 'lives' outside of the reach of the US gov unless you ban all of eth.
The company I work for is owned by a huge French bank. Even though I am in tech I still need to do some mandatory (legally required) training, and one of the courses is Treating Customers Fairly.
The FCA say "Treating customers fairly is a requirement for all regulated firms, no matter their size or the nature of the activities they undertake".
Sure, but we also live in a free society, so they can't just ban things because they feel like it without swift opposition. If it's a legitimate thing that people want, it'll still continue to exist, but would only move underground (for example, we know how alcohol ban worked out).
Indeed. There was a great article in the FT on this looming battle recently:
> Human society, the historian Niall Ferguson says, oscillates between the dynamic of a metaphorical “tower” and the “square”. Sometimes institutions or leaders control social groups in hierarchical ways, just as church towers overshadowed medieval European cities.
> At other times, horizontal networks shape events, operating like crowds in ancient city squares. The “square” used to work best in small, face-to-face groups, but digitisation now enables peer-to-peer systems to operate on a massive scale.
> Now, however, a “tower” dynamic is entering the frame. On Wednesday, the Bank for International Settlements (the central bankers’ bank that, in a delicious irony, occupies an actual black tower in Basel) issued a striking report that lashed out at the “square”.
The French equivalent to Lambda school is https://www.42.fr/ which actually predates Lambda by 3 years and is operating at larger scale (29 campuses worldwide). It's also free unlike Lambda.
I've been working in startups for 10 years (my whole career so far) because I was optimising for learning, not financial return. I made the bet that startups would be the fastest way to learn (breadth of tasks, workload, exposure to more senior people etc) and I am allergic to larger company bureaucracy.
I've worked on compressing (with x264, not the fastest but gets the file size right down) and encrypting a video stream with PGP and streaming the encrypted data via encrypted FTP from a Raspberry Pi. If I remember correctly, the lag was about 2 seconds, i.e. when pulling the power cable at 18:00:05, the server would have footage until 18:00:03. Most of that delay came from compression, since x264 looks at the next frame (so it waits a frame or two before running the algorithm) so the output is a bit delayed (can be disabled at the cost of much worse compression).
On the raspberry pi, the encryption took a fraction of the CPU that the compression needed, so yes, PGP-encrypting a video stream is relatively trivial, even if you call the GPG agent 5 times per second and do public key crypto every time (in this case it also made for a nice and robust format, you just split on the BEGIN PGP MESSAGE strings and can ignore broken frames). This can be optimized by a lot of course. An ideal case is probably to do keyring management with PGP and then use a different, meant-for-streaming format for the actual video data encryption and transfer.
I wonder how we could get more people to experience this effect... Something like what Stewart Brand did by pushing for and publicising the first whole earth picture (in part via the Whole Earth Catalog) but more for the internet age.
I was toying with an idea of a site called "Get Some Perspective" where you'd start off with a FPS view and as you scroll you gradually zoom out, eventually to the whole observable universe. You could send this link to people if they're being short-sighted, callous, etc and hopefully instill a bit of the Overview effect in them...
I think you're toying with the dangerous Total Perspective Vortex [0] as described by Douglas Adams:
The Vortex is now used as a torture and (in effect) killing device on the planet Frogstar B. The prospective victim of the TPV is placed within a small chamber wherein is displayed a model of the entire universe - together with a microscopic dot on a microscopic dot bearing the legend "you are here." The sense of perspective thereby conveyed destroys the victim's mind; it was stated that the TPV is the only known means of crushing a man's soul.
This will crush your soul if you consider you are insignificant, but let me help.
The entire universe is ENORMOUS and we are but tiny specks. But the same God who made all of that, made us, too. And that same God knows us by name and wants to have a relationship with us.
I love this quote from Edgar Mitchell (Apollo 14) on seeing Earth from the Moon:
You develop an instant global consciousness, a people orientation, an intense dissatisfaction with the state of the world, and a compulsion to do something about it. From out there on the moon, international politics look so petty. You want to grab a politician by the scruff of the neck and drag him a quarter of a million miles out and say, "Look at that, you son of a bitch."
