Also known as the oracle problem. Some platforms find solutions to this in a decentralized way, see Augur. The solutions to real world data being inputted into a blockchain is an economic one.
One issue with cryptocurrencies that pretty much everyone has a vested interest and you can't separate out the bullshit.
And it's not just vested interest though, there's vested delusion. If you read enough comments on /r/bitcoin, for example, you'll find people who seriously think their 0.001 BTC will buy them a Lambo one day. Completely rational people must have trouble resisting the temptation of just quick-plugging their pet cryptocurrency here and there because they own some and they're super enthusiastic.
And, on the other side, there are people who overreact to that, unable to separate the community from the tech when they are just talking about the tech. But I also think a lot of people dump on it because they are bitter that they missed out. I think the latter group explains more than we realize. Read patio11's bitcoin rants on twitter and tell me you don't see a flare of that.
It all creates a scenario where it's hard to really trust what anyone says about anything.
Some people just really dislike the shitty economics theories that are basis for cryptocurrencies. Hating on something you dislike is not too bad way to procrastinate.
The great thing about Bitcoin is that people with "shitty economic theories" are not able to influence the money printers.
Hating on it is wasting your time, because you can't change the fact. No matter how much you dislike it, or your bankers dislike it, or your politicians dislike it. It is immune to dislike. You can either chose to live with it and use it, or live with it and ignore it (at your own peril). It's not going away.
Well, if you only look at a 12 month period, then it might look like "bitcoin is dying", but when you look at the overall picture of bitcoin over the past 10 years, it tells the complete opposite story. Bitcoin is only trending in one direction over the long term, and it isn't downwards.
It's certainly fun watching TAs try to predict the price of Bitcoin based on a few graphs. Both those who are bullish and those who are bearish about its price in USD. None of this matters.
Bitcoin is not about how much of it you can obtain with USD. It's about sound money and financial autonomy. Demand for these is only going to continue to increase, particularly when far-left fintech companies are actively pushing people towards it, by refusing to conduct trade with people who have "wrong" political opinions.
> Well, if you only look at a 12 month period, then it might look like "bitcoin is dying" ...
Not dying yet (I wonder whether it will ever die), but "fading away". Which seems obvious, but hey, let's hope for another bubble!
> It's about sound money and financial autonomy. Demand for these is only going to continue to increase, particularly when far-left fintech companies are actively pushing people towards it, by refusing to conduct trade with people who have "wrong" political opinions.
And here comes the "economics theory" behind btc. Especially "sound money" is always fun to hear ... Nothing sounder than wildly fluctuating speculative asset! And people will demand it for sure! (or someone is paying for anything legal with btc again?)
I am not sure why some people keep believing in this. I-cannot-be-wrong syndrome?
> Not dying yet (I wonder whether it will ever die), but "fading away". Which seems obvious, but hey, let's hope for another bubble!
If you're convinced it is fading, be my guest. As far as I can tell adoption is continuing to increase. You can't take last years FOMO event as evidence that bitcoin is failing. We all knew it was being overpriced with people's expectations inflated. We knew because it had done this at least 6 times before, whenever a new media organization discovered it and announced it to millions of people who had not previously heard of it.
The difference in the 2017 bull market was that everyone heard of it. Even your grandma. Every media group published something about it, and everyone who had not previously heard of it FOMOd into it, expecting it to continue rising. An event like that is unlikely to happen again, because everyone has already heard of Bitcoin. There are no new people to inform, other than children who weren't previously old enough to learn about it.
Bitcoin adoption will be gradual as and when (if) people want to use it. It really does not matter if adoption stagnates, because there are enough existing users and enough liquidity in markets that existing users can still make good use of it, and trade with it.
Sound money will not really occur while bitcoin is under its inflation stage. It can only occur afterwards. Demand will increase if other currencies continue to decline in value relative to it. We have over 2000 years of economic history telling us this, although it was only coined "Gresham's Law" a few centuries ago. It all boils down to simple decisions people make. If I have an easy to obtain dollar, and I have a hard to obtain chunk of gold, which one would I let go of first?
Can you point to any examples in history where two separate monies have been in circulation and Gresham's Law has not played out?
This does not apply only to money either, but to many items which have intrinsic value (people desire to possess them) and are scarce. This is why original artworks continue to appreciate in value over time. Limited edition products tend to appreciate in value. Abundant items usually get trashed, until they become scarce, at which point their value starts to increase again (they become collectors items).
The dollar will not appreciate in value wrt to such limited items. It's just not scarce, nor does it have any intrinsic value. If Bitcoin has done anything, it has laid bare for everyone to see how worthless paper money is. I don't think this effect can be undone at this point. Too many people are too aware of this fact to ever revert back to using such a worthless store of value.
You are seeing things that aren't there. Just ask any people on the street what is more useful (i.e. intrinsically valuable) - dollars or btc. I am not sure why this isn't obvious to you.
Also, you focused on the bull run, but forgot that people _stopped_ using btc for payments. For me the breaking point was Steam removing it as a payment option. Everything after seemed like a show, concealing the main trend. That's why I added question whether anybody started using it again - I hear only people longing for days when btc was not valuable and you could pay with it. Now everyone just hodl's.
And as you say,everyone heard of it already. I don't see how usage can jump now, when btc made its name as super-crazy digital lottery. You continuously lean (Gresham law) on the btc being "good", but never mention why it is good, other than paper money being "worthless".
Which brings me to my "shitty economics" point ...
That's because Git already provides the same solutions for problems which exist in reality (immutability, trustless, distributed). All that's left out is the opportunity for some grifter to [if we're lucky] match it at substantially greater cost.
IOTA is moving towards an open source coordinator (released today on github), and eventually coordicide (which is what it sounds like). It's been the goal of the project from day one. Bitcoin had checkpoints when it started; the coordinator is analogous to checkpoints. Wouldn't touch XRP with a ten foot pole, though.
Checkpoints prevents the chain from being reorganized after a large number of confirmations have already passed. This is to prevent several days of transactions from being reversed.
IOTA's coordinator in contrast defines when a transaction can be considered confirmed.
Right. Perhaps comparing the coo to checkpoints isn't an apt analogy. However, the intent is the same. Without a coo, transactions would be probabilistic and confirmed once they went above a cumulative weight threshold, but the transaction volume is still too low to prevent a Sybil attack, hence the coo. It's still an open question whether or not the tangle can function coo-less, but it makes for an interesting experiment.
Isn't traceability a positive aspect for cryptocurrency in this case? You've got nothing to worry about if you're an honest investor, and frankly, this is one of the benefits of a pseudoanonymous crypto.
There's a decentralized peg to USD called DAI which is backed by ETH as collateral. It's maintained the 1$ USD peg throughout the entire crypto bear market. MakerDAO is quite impressive, and I hope to see it absorb the liquidity away from tether.
How do you define "1$ USD peg"? As of right now, the price of DAI is $0.98, 2% off its "peg". Asking as a serious question, since I see this statement a lot.
Dai is not really a traditional peg, as in the sense that there is someone who always trades on the market to maintain the peg (a liquidity provider like in USDT). It's more of an example of a system that has carefully balanced economic incentives. The fun part is that anybody can mint or destroy DAI, and take advantage of arbitrage opportunities.
For example, if I ever see DAI trading at, say, $1.02 then I would quickly mint some new DAI and sell for USD. Likewise, if DAI is at $0.98 then I would buy it back, then burn what I've minted, collecting a profit.
Well, pegs with a defined fluctuation boundary aren't that uncommon, for example, Danish Krona currently is pegged to Euro in such a manner - where it's pegged to within +/- 2.25% of a specific rate.
In essence, if you declare a plausible intent of keeping a rate near 1$ by accepting limitless orders to buy it at 0.98$ and sell it at 1.02$, and can keep that promise, then that's a decent peg.
That's just due to liquidity. The peg is maintained through arbitrage, so of course if you have low liquidity you're going to have fluctuations around the peg.
