That said, if trading is the killer app for Bitcoin/Crypto [0] in general - what is the point of this whole business? For example most of the genuinely innovative things I've seen on the ETH blockchain like 0x (the backbone of Paradex), dydx (decentralized derivatives) and related technologies or higher level platforms like relayers and decentralized exchanges involve trading. Which begs the question - what tokens are actually worth trading in the first place? Is all this value really justified by CryptoKitties?
Just making HFT bots to trade around a bunch of monopoly money that is useless other than hype-driven speculation? I'm sure this could continue for way longer than I and other skeptics expect, as it already has before, but the whole cryptocurrency sector seems fairly irrational to me. And I say that as someone who was VERY interested/knowledgable about bitcoin during the 2013 bubble, to the point where I was hanging out on IRC channels like #bitcoin-wizards, discussing BIPs etc.
[0] - https://tradingplacesnewsletter.com/move-over-crypto-enthusi...
I guess the old adage "The market can stay irrational longer than you can stay solvent" really applies here.
what a great question. 9 years later we're still trying to figure out what the point is.
I'm not disagreeing with what you said, but I would add that if you were very interested before the 2013 bubble and then lost interest, you were/are irrational as well. Like everyone else you're taking views on the price based on the price.
I have no way to rationalize a target at $100k, especially sharing the pie with other currencies... not saying it won’t go there, I just don’t know the math for that.
Given that there’s not a great reason to buy at $8k. Maybe for diversity among other investments.
How is that different from the rest of the financial market? The huge chunk of all HFT trading is siphoning the money from real investors, it has no real value for the economy. HFT traders hold no positions in the market.
For equities trading, for example the shares actually are a piece of a revenue earning company. The trading activity benefits society by allowing the company to sell additional shares to the public when needed, to raise further capital, for example.
For futures the contracts represent a guarantee to buy or sell a commodity at a known amount and price at a set date in the future. The trading activity benefits society by allowing commodity producers to lock in a known price and offload the market risk of their harvest/herd/etc to speculators.
So the HFT participants in these markets are actually helping society in some way by making these markets more liquid and efficient given that the trading actually serves some benefit. For bitcoin/crypto the trading itself is currently the whole point of the endeavor - people are only buying coins because they think they will go up in price, which makes the trading itself pointless.
I think we're getting closer to tokenizing actual securities. Similar to how TrueUSD is tokenizing U.S. Dollars, I think we're fairly close ( 5 years out) from NASDAQ officially tokenizing their stocks ( as an erc20 on the ethereum blockchain)
To add to your list of points, I'd argue privacy is another thing crypto as a whole hasn't really taken seriously apart from a small set of cryptocurrencies. How many people want to dish out their address to stores when this implies they can see their history and with it way too much metadata like where you spend/earn, how much you spend/earn, and so forth.
DEXs are great because you can trade cryptocurrency pairs without trusting an intermediary (think Mt. Gox for why this is needed).
This move shows that Coinbase is serious about building a decentralized trading platform (unless this is just an acquihire which would be very disappointing).
Really exciting news!
There is still an intermediary, they just never touch your funds.
What's the point of a decentralized exchange if the frontend code can be shutdown at will?
You can have decentralization with respect to some components of the exchange and not others. In the case of Paradex it seems the point of decentralization is that you don't have to trust the exchange for custody. That's quite good by itself, even if they can shut down the frontend at will.
[0]: http://hackingdistributed.com/2017/08/13/cost-of-decent/
https://blog.0xproject.com/front-running-griefing-and-the-pe...
https://blog.0xproject.com/front-running-griefing-and-the-pe...
Acquihire? It would be weird for Coinbase to take full advantage of a descentralized exchange because many of the tokens clash with regulations and even being decentralized makes Coinbase the owner and target for SEC.
https://www.sec.gov/Archives/edgar/data/1735689/000173568918...
https://www.sec.gov/Archives/edgar/data/1735709/000173570918...
I've had this thought myself. I think we can agree that most solid evidence points to Yes, trading is the killer app. Trading on something that has no intrinsic value. I.e. gambling.
And hey, gambling is a legitimate killer app. The gambling industry is enormous.
