Ethereum founder threatens to quit

It turns out that the founder of the popular cryptocurrency, Ethereum, is giving the whole cyrpto community a warning. As stated in the Business Insider article;

He said folks in the space should understand the difference between enacting positive change for society, and just moving a bunch of money around.

He then threatened to leave the community if things didn't change.

For those who have knowledge about block-chain technology, and the cryptocurrency markets, what do you think about what the Ethereum founder is saying? Do you believe that the whole point of cryptocurrency is being lost, in hopes of turning from rags to riches?

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Comments (21)

Dec 29, 2017 - 11:26am

His position is asinine. The purpose of cryptocurrency is to act like a currency that is not controlled by the government or a central authority. Currency is bought and sold second-by-second, often with the purpose of turning a profit. I'm not sure what he's expecting. Either Ethereum is a currency or it's not. If it's a currency then people will treat it like any other currency. If it's not a currency then it serves no purpose.

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Jan 3, 2018 - 10:18pm

You are correct, that is true of currency, however I would argue that the proportion of interest in crypto is disproportionally focused on in its value as a speculative asset, as opposed to its (alleged) intrinsic advantages over traditional currency. For a disruptive technology, one would expect the banter surrounding it be "wow, is so much better than , for reasons", not "man, you should see how much money my cousin has made trading crypto". I'm not saying the former isn't mentioned, but the % of that conversation seems minimal with respect to the latter.

I will say however, I'm not in the fold on crypto, and going from anecdotal data here, so happy to proven wrong.

Jan 3, 2018 - 11:00pm

Again, the purpose of crypto currency is to act as a non-state controlled currency. You don't go from zero to one in any new asset class until there is critical mass, so until there is critical mass there will be a lot of volatility, which attracts rent seekers. It's basic market economics and it's a bit chilling that a currency's founder is opposed to the simple principles of supply and demand.

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Jan 5, 2018 - 1:21am

Non of the cryptos have anything to do with currency. Bitcoin is far more of a digital gold than a currency. There isn't one currency on earth that is incapable of being used in banking. Bitcoin by design can never be used in banking because it is fundamentally deflationary. For a currency to be used in banking it needs a stable inflation rate so that borrowers and lenders have a fairly realistic idea on the costs of the loan in real terms. If a currency has too much inflation then the borrower is getting cheap credit and the lender receives less back in real terms than they expected. If a currency has unexpected low inflation or deflation then the borrower is bankrupt. Try buying a home and have deflation of 5% instead of expected 2% inflation. If you borrowed at say 5% then the borrowers real rate is 10% instead of expected 3%. That variance would bankrupt even borrowers who borrowed reasonably.

In ethers case it's not even designed to be a gold like assets. Ether is actually designed to fund applications. It's purpose is to fund computer nodes running apps.

For buterin the excessive speculation can potentially cause the whole business to fail. He's trying to build something like amazon a real business....probably something like aws but I'm not an expert. If it's as if it's y2k and he's Jeff bezos trying to build his amazon platform but instead people care more about the stock system than the real business. Sometimes it's easier to build a real business over time quietly then having to deal with excessive hype and eventually disgruntled investors. He knows what he's actually built is out of touch with his ticker symbol. I respect him for this. He's not Cuban flipping his dotcom symbol to yahoo but bezos trying to create something that changes the world.

I personally do not believe in his dreams but maybe I'm wrong. But if he's trying to be bezos the market is turning him into Cuban.

Personally I believe in centralized systems. I think they are largely more efficient. I think the federal reserve largely runs smart monetary policy and has created a much better financial system then what we saw in the 19tb century pre-fed and all the ideas of digital currencies take us back to prehistoric monetary policy ideas. I think centralized databases are more efficient than decentralized systems. I'm fine with my photos being stored on Facebook, amazon, iCloud, etc. I think it's more secure than some random minors storage or on multiple miners system. If I buy a cup of coffee at Starbucks why does the transaction need recorded on a thousand decentralized miners instead of one central visa database? Fundamentally it shoulda less efficient.

Now decentralized works really well for certain things like the underworld or a project that is not liked by society. Having the application or transaction on thousand of miners solves trust issues while also providing some means of being anonymous. But I think that is inefficient and something society may force their governments to block. Do we want heroin dealers to have anonymous ledgers securing their currency and running their data systems? I think not.

Jan 5, 2018 - 10:59am

Your whole analysis is completely wrong and contradicted by thousands of years of history. Gold was "deflationary currency" (as you categorize it) and was base currency for close to 10,000 years. It was base currency in banking systems and in pre-banking systems.

It's clear you don't understand the difference between base currency ("money proper") and bank money. You can have an absolutely fixed supply of base currency and still have monetary growth.

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Jan 5, 2018 - 1:08pm

It's clear you are stuck in the past before we had functional governments. Gold was better than paper money back then. But we suffered banking crisis that were far deeper and longer than anything the world sees now. You ever hear of a thing called the great depresssion? Yep function of the gold standard model. A modern economy could never function on that system.

Do not pass go. Do not collect $200. Return to Ancient Rome where you belong.

Best Response
Jan 5, 2018 - 1:36pm
traderlife:
For a currency to be used in banking it needs a stable inflation rate so that borrowers and lenders have a fairly realistic idea on the costs of the loan in real terms.

This statement is objectively false. No other way to spin it. It's just wrong. Gold served as bank money through the 19th and early 20th century banking systems and, at an international level, until 1971. Try to spin it all you like. You're wrong.

traderlife:
It's clear you are stuck in the past before we had functional governments.

I'm curious, when did "functional governments" begin in your mind? Were there no "functional governments" prior to 1971?

traderlife:
But we suffered banking crisis that were far deeper and longer than anything the world sees now. You ever hear of a thing called the great depresssion?

You don't know the first thing about the great depression. It started precisely because nation's abandoned the gold standard to finance WW1 and then tried to re-install it at pre-war levels when economic conditions were dramatically different. Most notably, Great Britain became a debtor nation and the U.S. became the manufacturing/exporting powerhouse.

Britain attempted to impose the pre-war exchange rate of 5:1 dollar/pound. The US obliged by propping up the pound in order to avoid dollar appreciation. The US feared that rapid appreciation would hurt its current account with the United Kingdom. This creates massive, international trade imbalances that were only magnified by US central bank policy (gained the ability to engage in open market operations in 1922).

There you go. A free history lesson.

traderlife:
Do not pass go. Do not collect $200. Return to Ancient Rome where you belong.

Yeah man, ancient Rome. Well done. Bravo.

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Jan 5, 2018 - 9:22am

He doesn't want ETH to be a currency you can walk into Starbucks and buy coffee with. He wants it to be viewed as fuel for the Ethereum virtual machine something along the lines of "digital oil". Sure oil has value and can be traded and exchanged for goods and services but that it not its intended primary use.

I get his stance. He started this project with a lot of community development support and now he gets blown up on twitter everyday with idiots talking about ETH mooning and how many lambos they will own. I would get pissed too.

Jan 5, 2018 - 11:03am
picklemonkey:

He doesn't want ETH to be a currency you can walk into Starbucks and buy coffee with. He wants it to be viewed as fuel for the Ethereum virtual machine something along the lines of "digital oil". Sure oil has value and can be traded and exchanged for goods and services but that it not its intended primary use.

I get his stance. He started this project with a lot of community development support and now he gets blown up on twitter everyday with idiots talking about ETH mooning and how many lambos they will own. I would get pissed too.

After reading what you wrote I still don't know what his intended use is. Fuel for an ETH virtual machine? Huh?

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Jan 5, 2018 - 10:56am

The value of any currency increases as its network grows. Ethereum's network is growing (as more and more platforms run off of its system). Yes, speculation is driving value probably beyond that which is justified by its current network growth (no real way to know this), but that's because there's so much potential functionality here beyond just currency.

You basically have these liberals in the tech space that are too noble for their own good. They should learn how to accept success and not feel guilty about it.

“Elections are a futures market for stolen property”
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Jan 5, 2018 - 2:37am

Tech guy regrets his creation. Nothing new under the sun.

''I just wanted to fuck around with nuclear technology and ended up creating the nuclear bomb''.

Never discuss with idiots, first they drag you at their level, then they beat you with experience.

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Jan 5, 2018 - 2:34pm

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