Ethereum

Frequentlyhere

aaj123 said:

Frequentlyhere said:

Do you consider gold to be in the same category or do you see it different only because of the jewellery and electronics use cases? Do you know that these use cases alone wouldn't justify even 10% of the overall value of gold as it stands. So do you describe the gold market too as 'punters money in and out'?

Most gold just sits idle in safes and vaults (a lot of them are ones owned by central banks). And all this valuation despite the drawback of the cost of storing gold and the inability to transact in physical gold (I mean sure you can transact in paper gold but that is then trusting third parties and paper gold cannot even assure you of true supply.).

Very very late reply, apologies, I somehow missed it earlier.

I do acknowledge/agree that gold does have those characteristics to some extent, which is why it's not a great investment. Despite it not being great by itself, I do actually own some however, as for a FIRE drawdown it provides some negative correlation to stock markets. But, long term the returns are pretty poor, it more just eases overall portfolio volatility.

I see ETH/BTC's best shot at being widely 'useful' for an investor is for a similar purpose/risk profile - volatile, and perhaps not moving in march with the stock market all the time. Neither are there yet though, and it's far from certain they'll get there.

Coming back to your few points, re: your point 3 (environment) I've already acknowledged I think that it's great to see ETH have made that shift. Re: the other points, I'm sorry but these are self-referential things. Companies earn profits and pay dividends, banks lend money and pay interest.

What this is, it appears to me anyway, is finding all sorts of internal ways for some ETH customers to pay other ETH customers money for the privilege of doing stuff with ETH. It's shuffling tokens around between customers within the sphere of Ethereum.

However for as long as USD/GBP remain the thing which we all want to actually spend in, then it can still only be just that, back into the realm of a speculative investment masquerading as something with yield.

Unless we can answer the question " I want to buy some ETH with my GBP because ........" ?

..Without the answer being, essentially, "because I hope when I sell it it will have appreciated because of the price going up or earning some ETH yield and the price staying the same" 

Is there that something there with ETH?

Because otherwise, aren't we back in the world of hoping ETH will be a new digital gold? Maybe it will, but then maybe people will choose BTC, another rival, another coin yet to come, or just not choose crypto at all? Those seem like big risks to take for something to 'potentially' mimic a not great asset anyway.

aaj123

Frequentlyhere said:

aaj123 said:

Frequentlyhere said:

Do you consider gold to be in the same category or do you see it different only because of the jewellery and electronics use cases? Do you know that these use cases alone wouldn't justify even 10% of the overall value of gold as it stands. So do you describe the gold market too as 'punters money in and out'?

Most gold just sits idle in safes and vaults (a lot of them are ones owned by central banks). And all this valuation despite the drawback of the cost of storing gold and the inability to transact in physical gold (I mean sure you can transact in paper gold but that is then trusting third parties and paper gold cannot even assure you of true supply.).

Very very late reply, apologies, I somehow missed it earlier.

I do acknowledge/agree that gold does have those characteristics to some extent, which is why it's not a great investment. Despite it not being great by itself, I do actually own some however, as for a FIRE drawdown it provides some negative correlation to stock markets. But, long term the returns are pretty poor, it more just eases overall portfolio volatility.

I see ETH/BTC's best shot at being widely 'useful' for an investor is for a similar purpose/risk profile - volatile, and perhaps not moving in march with the stock market all the time. Neither are there yet though, and it's far from certain they'll get there.

Coming back to your few points, re: your point 3 (environment) I've already acknowledged I think that it's great to see ETH have made that shift. Re: the other points, I'm sorry but these are self-referential things. Companies earn profits and pay dividends, banks lend money and pay interest.

What this is, it appears to me anyway, is finding all sorts of internal ways for some ETH customers to pay other ETH customers money for the privilege of doing stuff with ETH. It's shuffling tokens around between customers within the sphere of Ethereum.

However for as long as USD/GBP remain the thing which we all want to actually spend in, then it can still only be just that, back into the realm of a speculative investment masquerading as something with yield.

Unless we can answer the question " I want to buy some ETH with my GBP because ........" ?

..Without the answer being, essentially, "because I hope when I sell it it will have appreciated because of the price going up or earning some ETH yield and the price staying the same" 

Is there that something there with ETH?

Because otherwise, aren't we back in the world of hoping ETH will be a new digital gold? Maybe it will, but then maybe people will choose BTC, another rival, another coin yet to come, or just not choose crypto at all? Those seem like big risks to take for something to 'potentially' mimic a not great asset anyway.

How do you answer the question you pose for the case of stocks? You asked for disregarding price increase and also disregarding yield. So now frame your case for stocks while disregarding price increase and dividends.

I want to buy stocks with my GBP because....?

aaj123

The much awaited Shapella upgrade went through nice and dandy yesterday opening up the ability to unlock staked Ether. Watch the space. Getting yield just got a whole new meaning. I understand though that 'few understand this...'.

Frequentlyhere

aaj123 said:

Frequentlyhere said:

How do you answer the question you pose for the case of stocks? You asked for disregarding price increase and also disregarding yield. So now frame your case for stocks while disregarding price increase and dividends.

I want to buy stocks with my GBP because....?

The answer on this thread too is the difference between productive vs non-productive assets (see my post on the BTC thread, which also has a decent link about it).

But also, I'm not disregarding dividends, they're a very useful feature of many stocks. I'm more saying that ETH (and BTC) don't have any real yield. Bitcoin pretty explicitly doesn't and Ethereum is cosplaying that it does but those 'dividends' are only coming from other people playing with Ethereum.  

It wouldn't be my idea of a sustainable investment as a conventional stockholder if some of us were paid dividends that only came from other stockholders who are being charged for them based upon some pretty arbitrary criteria.

And as ETH does have to do that, it's why in my view it has to answer the question - well, why bother with it? 

People are only going to stick around paying up this "yield" for others if it delivers some tangible value to those paying - no?

aaj123

Fun fact: People do pay on the eth network for part of the yield that others get. Why do you think they do so if not to get value? No eth holder is forced to pay as such. They pay fees because they see value in transacting with eth to gain access to buy nfts, defi products,  dexes, etc. If they pay the fee willingly,  what makes you think they are paying for 'no value'? 

Almost like saying the world is a ponzi because what you pay as the restaurant bill is what enables the employees to get paid. 

Edit: You are also wrong that all of the yield on eth is from other holders. Infact most of it comes from new issuance. It's the burn that occurs due to fees paid by anyone transacting and this is a benefit to all and not just stakers. The fact that burn is higher than new issuance is not inevitable part of the design but rather because usage of eth has become high enough to generate so much burn. 

I am inclined to believe most crypto skeptics do not do an iota of research before replying with an answer that suits their preconceived notions. 

aaj123

Name one asset other than ETH that gives a yield with zero cpty risk and where the asset is one whose supply is decreasing (and this due to usage based burn).

There is absolutely none and this is what puts ETH in a league of its own. You had the heads up and the facts now. I always sympathise with those who are uninformed or get misled by media but not those who were provided facts and yet chose to stick with pre-conceived notions. So do your research now instead of off-the bat coming up with the 'But it is shuffling poker chips' response.

thegentleway

aaj123 said:

Name one asset other than ETH that gives a yield with zero cpty risk and where the asset is one whose supply is decreasing (and this due to usage based burn).

There is absolutely none and this is what puts ETH in a league of its own. You had the heads up and the facts now. I always sympathise with those who are uninformed or get misled by media but not those who were provided facts and yet chose to stick with pre-conceived notions. So do your research now instead of off-the bat coming up with the 'But it is shuffling poker chips' response.

🤦‍♂️ zero counterparty risk? How did you figure that out?!

aaj123

thegentleway said:

aaj123 said:

Name one asset other than ETH that gives a yield with zero cpty risk and where the asset is one whose supply is decreasing (and this due to usage based burn).

There is absolutely none and this is what puts ETH in a league of its own. You had the heads up and the facts now. I always sympathise with those who are uninformed or get misled by media but not those who were provided facts and yet chose to stick with pre-conceived notions. So do your research now instead of off-the bat coming up with the 'But it is shuffling poker chips' response.

🤦‍♂️ zero counterparty risk? How did you figure that out?!

Because the yield I am referring to doesn't come from a counterparty. This isn't lending. The yield I am referring to is one given by the ETH network in return for you staking your eth and accepting responsibilities of transaction validation on the network. There is a lot to learn here so here you go:

https://ethereum.org/en/staking/

thegentleway

aaj123 said:

thegentleway said:

aaj123 said:

Name one asset other than ETH that gives a yield with zero cpty risk and where the asset is one whose supply is decreasing (and this due to usage based burn).

There is absolutely none and this is what puts ETH in a league of its own. You had the heads up and the facts now. I always sympathise with those who are uninformed or get misled by media but not those who were provided facts and yet chose to stick with pre-conceived notions. So do your research now instead of off-the bat coming up with the 'But it is shuffling poker chips' response.

🤦‍♂️ zero counterparty risk? How did you figure that out?!

Because the yield I am referring to doesn't come from a counterparty. This isn't lending. The yield I am referring to is one given by the ETH network in return for you staking your eth and accepting responsibilities of transaction validation on the network. There is a lot to learn here so here you go:

https://ethereum.org/en/staking/

Thanks but unless you’re running your own node(s) then you are exposed to counterparty risks. If you are running your own node(s) then there are still risks: validator penalties, slashing, etc…

aaj123

thegentleway said:

aaj123 said:

thegentleway said:

aaj123 said:

Name one asset other than ETH that gives a yield with zero cpty risk and where the asset is one whose supply is decreasing (and this due to usage based burn).

There is absolutely none and this is what puts ETH in a league of its own. You had the heads up and the facts now. I always sympathise with those who are uninformed or get misled by media but not those who were provided facts and yet chose to stick with pre-conceived notions. So do your research now instead of off-the bat coming up with the 'But it is shuffling poker chips' response.

🤦‍♂️ zero counterparty risk? How did you figure that out?!

Because the yield I am referring to doesn't come from a counterparty. This isn't lending. The yield I am referring to is one given by the ETH network in return for you staking your eth and accepting responsibilities of transaction validation on the network. There is a lot to learn here so here you go:

https://ethereum.org/en/staking/

Thanks but unless you’re running your own node(s) then you are exposed to counterparty risks. If you are running your own node(s) then there are still risks: validator penalties, slashing, etc…

The validator risks / penalties / slashing, sure but that's very different from counterparty risk. And if you use centralised exchanges for staking convenience then ofcourse you take on cpty risk against the exchange.

There is however one extremely good middle way where you pay a 15% fee but at the same time get others to stake for you while still having no cpty risk abd buffered against penalty / slashings. Look at Rocketpool.

https://rocketpool.net/