2022-11: Warosu is now out of maintenance. Become a Patron!
Okay so I'm a finance brainlet and this is my hot take after reading /biz/ for 2 days:>link is an intermediary service for competing cryptocurrencies that are decades (if ever) from widespread adoption>which means it's growth is dependent on the adoption of cryptocurrencies, which seems unlikely>also cryptocurrencies are open sourced>which means it doesn't stop existing banking/government institutions from adopting said technologies once they've matured>if and when banking/government institutions does adopt said technology, all existing cryptocurrencies are worthless as they are backed by nothing>and what happens when all the coins are mined out?>what incentive does anyone have to keep the network going?The technology is cool, but it's neither needed or necessary I guess what I'm saying is investing in anything crypto related is a memeAlso this board is basically juking each other into making terrible financial decisionsQuite frankly you're all faggotsDoes this sum it up or should I lurk more?
i agree anon you should definitely leave and never come back
> I'm a brainletWell you got literally one thing correct in your entire post
>>12537205this, totally don't go and look at warosu posts about ETH from pre-2016
>>12537171lurk more newfag
>>12537171>link is an intermediary service for competing cryptocurrencies 2% correct, 98% wrong.>which means it's growth is dependent on the adoption of cryptocurrencies, which seems unlikely100% wrong>also cryptocurrencies are open sourced>which means it doesn't stop existing banking/government institutions from adopting said technologies once they've maturedthe value of the technologies is the security and liveness guarantee made possible by decentralization of validation and block propagation. you can't just copypaste the utility of public networks into private networks as a "technology". the public network's utility relies to a large extent on the permissionless for being a stakeholder with a say in what happens, or more importantly, what isn't allowed to happen.>and what happens when all the coins are mined out?>what incentive does anyone have to keep the network going?In capped supply POW networks, the rule tends to be that the rate of distribution of coins for miners is halved every x blocks. This means that the mining reward minting never stops.Miners do however get additional income from the transaction fees that users pay to send (or "write") on the network, which could be sufficient alone for a highly used network.There are uncapped supply networks that plan on long term inflation of the write to chain fee token (the "cryptocurrency") to reward POW or POS validators.Hope that helps. If you want to understand the use case of chainlink, and really the prime use case of blockchain in general, you must learn what smart contracts are, how they work and what you can do with them. Good visual way to see how a simple type of trustless smart contract works https://www.youtube.com/watch?v=Rm1m-QvVQgM&feature=youtu.be
>>12537171Is that what you learned? Lel, well done newfag.
thanks just sold 100k
>>12537284yeah but blockchain systems only work if people put in the processing power to mine, electricity/hardcore costs are also factors, so what happens when costs > reward?>videoyeah, it's an intermediary for securing a transactionit could be be big if it ever becomes widespread standardthen again, all these tech are decades out unless im missing something
>>12537171You’re correct on eveything, you should leave and never come back
>>12537422>so what happens when costs > reward?difficulty is automatically adjusted when hash power is lower / blocks come in slower than they are supposed tobasically, miners with the lowest margins who go into the red will stop mining and the ones that are still profitable or at least aren't losing will get a bigger share of the cake.end result is that the least efficient miners go out of business and the rest of the miners keep on miningI'm not a big fan of POW in the long run, but the system is very well designed to prevent these kinds of issues automatically. With some blockchains like bitcoin, the difficulty adjustments can only happen after X amount of blocks where X is a pretty large amount. In such cases, if, say, someone were to increase the difficulty high by applying a lot of hash power, and then right after a difficulty adjustment, they sell a lot of coins and dump the price and keep the price low, while stopping mining on that blockchain completely, the remaining miners would be mining at a great loss until the next difficulty adjustment, and that difficulty adjustment could be many months away if the hashpower that was yanked away by the bad actor was a very large portion of total hashpower. If, lets say, that hashpower was 95% of total hashpower, that would mean blocks would be made 20 times slower until the next difficulty adjustment. In a blockchain like bitcoin where block time target is 10 minutes, that would mean each block (transaction confirmation) would be 200 minutes inbetween.
>>12537171>I’m an ill informed dunce, here’s my take.Honestly that makes you middle management here.
>>12537480Not only does it drastically increase the interval of confirmation, but if the blockchain in question has a block size limit, it would reduce the transactions per second that could go through, because you can only fit so many in a single block. This would make the blockchain effectively clogged and unusable. Most other miners would likely stop mining as the price is dumped too, leading to less and less mining, leading to slower and slower blocks. People would panic and dump the cryptocurrency they already have on exchanges when they realize what is happening and no one would want to buy them, further reducing rewards of mining. This is known as a "chain freeze death spiral" or something like that. Can't remember such an attack ever being performed, though the initial actors behind bitcoin cash had the means to effectively perform such an attack once during bitcoin's history and it appeared like they might do it, as the bitcoin blockchain was spamcongested, leading to a stampede of regular users sending transactions to exchanges in case they needed to sell out, clogging it even more.
>>12537480>>12537487thanks for the explanationalso, what happens when one party bails out of a transaction?in the real world you could sue them, but what are you going to do with crypto? sue an address?how are transaction deputes settled?i guess one party could put up collateral, but losses are just straight up losses no?
>>12537284>>12537480>>12537487thanks for the content
>>12537545>what happens when one party bails out of a transaction?What do you mean bail out? If someone sent you money and it gets validated into a block (or, preferably, more than 1), it's practically non-reversible. There are exploits to get around this, but they require a lot of capital and tend to be contrary to the interests of whomever would want to try them because if serious, they would undermine trust in the blockchain and thus their source of income as well as the price of the assets they are burning electricity to effectively duplicate (51% double spend attacks).If you're talking about bailing out of trades or some kind of complex financial bet, then that's where smart contracts come in. The minecraft video I posted above makes you understand the basics of what a trustless smart contract is.
>>12537578i wanna circle back to the beginning of why the hell would anyone invest in crypto and crypto accessoriesTM and maybe you can make a case for itit's not physical resource that could be tradedit consumes a lot of computing powerseems like an alternative luxury to me, and one that isn't -really- needed given how, for the most part, western banking/economy functions flawlesslyand when it all goes sour, it's not like you can trade bitcon for a sack of rice whereas someone would probably take gold for riceso why bother when the alternatives (like natural resources) are far less risky?
>>12537660Man you need to expand your mind and stop thinking so limited. Think of the sheer human power behind these ideas. It will succeed on that fact alone due to the amount of money it’ll save certain individuals. Way more intelligent humans have thought about your thinking x100. Just join the collective hive mind and realize this is the business of the future. Natural resources will always have its uses. You’re not wrong. But that market is very small in terms of growth.
>>12537660I agree with you when it comes to cryptocurrencies. Simply as a store of value "just because", it's just a greater fool theory valued asset.The real value lies in decentralized and/or trustless financial applications that can be built on blockchains. For example, you can design an automated trustless exchange running on ethereum (this already exists, check out etherdelta/forkdelta).On a 2nd layer on ethereum, you are likely to be able to make a trustless version of global stock exchanges all combined where people can exchanged tokenized shares of companies and dividend payouts are done from the companies by simply sending out a transactions that gives every holder of a token a portion of the dividend based on how many tokens it holds. Say goodbye to brokerage fees and say goodbye to opening and closing times. Say goodbye to high transaction fees, etc. You automated away so many middlement.You can also have derivatives smart contracts where people can bet against each other or "against the house" if some company is willing to be a general counterparty (they could hedge on aforementioned exchange), like futures and CFDs, etc, but those use cases require external output into the smart contract upon settlement. This is where chainlink would come in, where you basically order the answer to your question and several nodes that fit your criteria on collateral and/or reputation take your job and then supply the answer to the smart contract (like what is the price of wheat now?). Most smart contracts will likely call on dedicated oracle smart contracts that order a wide range of off-chain information via chainlink often.
>>12537764*middlemenFor this to work on a blockchain and/or trustless 2nd layer on that blockchain that leverages the base layer's security in disputes and has free movement of assets in and out to the base layer you need validators and validators need to have a stake to lose if they behave badly. You also need a reward for the validators, and a network spam disincentive. This is where transaction fees come in, and that is also where demand for the blockchain's underlying cryptocurrency comes from. In chainlink's case, demand comes via people needing link to pay for calls for external information and link to put up as a stake that gets slashed if they behave wrongly.Various platforms use tokens like this to drive security and function through game theory, and some tokens just use them for rent seeking (like just a fee to use the smart contract based service they set up that gets divided and sent to all token holders) or as basically coupons to use their services, which can cynically just be to raise money, or it can also help save costs compared with traditional banking system transactions (especially internationally), as well as make tax different depending on country laws.
>>12537755>you're dumb just conform90 IQ pajeet scam
>>12537790He has blinders on. I’m sorry I don’t want to spend time convincing him. It’s not about conforming it’s about a future automated economy permanently imprinted on an immutable collective virtual database m8. Anyone with a brain wouldn’t be on the defensive and assume no more money will flow into this market.
>>12537171>cryptocurrenciesIsn’t Plebbit sending you a notification about a reply to your comment on some Trap Subplebbit rn?
>>12537755>expand your mind that's partially why im hereand keeping tabs on crypto and crypto accessoriesTM>>12537764>>12537768well you certainly paint a cool future of it's usagebut i have a hard time imagining a world where the entrenched middlemen will give up their position easily, even if the tech works>yeah the f35 is cool and all>but we gonna use A10 cuz it gud still
>>12537879Adapt or die. Once their competitors start they will have to as well. Most companies are jump starting their dive into Blockchain in past year.