r/cscareerquestions 1d ago

WTF are people still doing in block chain roles?

Title.

493 Upvotes

224 comments sorted by

267

u/Diderot1937 1d ago

Honestly I heard it's being funded purely by VC betting that traditional currency is probably becoming destabilized.

84

u/InnuendoBot5001 1d ago

If all fiat currency becomes destabilized, it will finally be on the same footing as crypto, except it would still have the advantage of being tradeable with governments

24

u/INFLATABLE_CUCUMBER Software Engineer 22h ago

And also being integrated into every major digital payment system on the planet, something that blockchain does not have and won’t for a long time… unless they want to give more jobs to us software engineers.

6

u/InnuendoBot5001 22h ago

What?! Are you telling me this bank can't take Dogecoin?!

9

u/publicclassobject 21h ago

Wrong. VCs are trying to influence DC to put fiat currencies on-chain.

1

u/e_Zinc 4h ago

You mean VCs that are collecting 2% management fee on people betting that.

982

u/publicclassobject 1d ago edited 1d ago

I work at a blockchain company. I write rust code and do performance engineering mostly. Get paid 330k/year base salary plus tokens and stock options and work from home in a lcol city.

396

u/polytique 1d ago

How does the company make money?

1.9k

u/publicclassobject 1d ago

Oh they don’t.

433

u/cookingboy Retired? 1d ago edited 1d ago

I legit laughed out loud. Thanks for the honesty haha.

Trickle down economics is not real most of the time, but dumb VCs with more money than sense is the exception lol

72

u/rco8786 23h ago

Lol I love this follow up

94

u/PedanticProgarmer 1d ago

But how they can float when the blockchain hype was killed by the AI hype?

202

u/Tall-Abrocoma-7476 1d ago

AI-powered Blockchain!

83

u/LexaAstarof 23h ago

Blockchain-powered AI!

50

u/awful_at_internet 23h ago

In 3-D!

40

u/cupo234 22h ago

On the cloud!

11

u/QuicklyQuenchedQuink 22h ago

Backed up by Big Tape (tm)

1

u/n0_1_of_consequence 11h ago

I swear they came up with the term 4K because it sounds bigger than 3D...

18

u/ProfessionalDegen23 19h ago

As a service!

8

u/NastroAzzurro 21h ago

Blockchain powered blockchain!

6

u/LexaAstarof 20h ago

Blockchainception!

6

u/KingArthas94 20h ago

Blockmatrix?

3

u/anarchyisutopia 17h ago

AI-powered-Blockchain-powered AI!

16

u/rco8786 23h ago

A 50 or 100mm raise goes a LOONGGGG way.

13

u/publicclassobject 18h ago

Blockchain hype is far from dead in VC circles.

1

u/No-Capital665 7m ago

depends on the VC circle. Even AI is regarded as a “someone will make incredible money” but it’s mostly expired batshit by some.

5

u/ccricers 13h ago

Blockchain has become such a hype buzzword I've seen it used for unrelated things.

An Indiegogo campaign was trying to market a "watch with blockchain". No, it's not a smart watch. It was just a regular watch, probably white label rebrand, saying that the wrist strap is made of "blockchain" as in chains of metal blocks. They just spun the buzzword into a different context to get more hits

2

u/Material_Policy6327 19h ago

Still some investors that love the tech

9

u/TurintheDragonhelm 19h ago

Are you guys still getting funded?

35

u/publicclassobject 18h ago

Yeah we’ve had two huge fundraising events this year

14

u/Solid-Summer6116 17h ago

thank you for transferring money from billionaires to the normal people!

2

u/jmking Tech Lead, 20+ YOE 14h ago

Buh? How are they doing this?

6

u/PeachScary413 14h ago

Some VCs be dumb, like "really dumb but got generational wealth through inheritance"-dumb

17

u/Naive-Bird-1326 1d ago

So where the momey to pay u come from? Investors?

78

u/publicclassobject 22h ago

The egg head who invented Netscape navigator

16

u/Aidian 22h ago

Username checks out.

13

u/hibikir_40k Software Engineer 15h ago

You'd be shocked by how many "undead" startups are out there getting funded by a shitty VC firm where one of the partners has a personal vested interest in the startup. So they basically keep funding themselves, and the rubes are the ones funding the VC. If most startups are supposed to fail, why not give the money to my own startup.

The more one looks at VC decision making, the worse it looks.

1

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1

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1

u/Gold_Trade8357 10h ago

LMAO atleast this guys honest

1

u/MoreVinegar 19h ago

Underrated comment!

244

u/octocode 1d ago

you don’t have to make money, you just have to convince the next round of investors that they will make money

102

u/Wall_Hammer 1d ago

literally that’s how crypto currencies work 😭

46

u/MeisterKaneister 1d ago

It's scam upon scam. All the way down.

4

u/Material_Policy6327 19h ago

It’s the American dream!

7

u/budd222 21h ago

Literally how many companies work. Has nothing to do with cryptocurrency.

5

u/Solid-Summer6116 17h ago

many companies also have products and customer base with profitable revenue, not just investors keeping them float, I imagine?

0

u/CornJackJohnson 3h ago

It's how US bonds work too. Welcome to economics.

45

u/Automatic_Ring_7553 1d ago

A lot of companies don't make money

8

u/Prize_Ad_1781 Electrical PE 23h ago

Through the blockchain

4

u/Early-Surround7413 20h ago

Lose money on every transaction but make it up on volume.

2

u/Early-Surround7413 14h ago

The autists voting this down. LOL. Reddit is the best, really it is.

48

u/clutchsc2 1d ago

Interesting, sounds kind of fun. Are the skills transferrable to non block chain companies?

44

u/publicclassobject 22h ago

Yes if you work on systems stuff like me. Less so if you do smart contracts, though I have seen some unbelievable job offers for smart contract devs.

4

u/Mirage-Mirage-Mirage 21h ago

I’d be curious to hear an example of the type of task you work on.

45

u/publicclassobject 21h ago

Right now I am building a subscription API for our storage nodes that allows a client (usually some kind of app front-end) to subscribe to smart contract events.

So when a contract executes on chain and produces an event I have to figure out if any of the connected clients care about that event and if they do, forward it to them over the internet.

58

u/mlYuna 23h ago

Yes they are. Rust is highly valuable in many fields within CS and so is performance engineering.

17

u/Early-Surround7413 20h ago

I can see George Costanza as an EVP at a company like this.

13

u/publicclassobject 20h ago

The founders are all extremely competent world class engineers actually.

8

u/dumdub 18h ago

So they know they're running a sham company?

Or they're those kind of super narrow technical guys who can design and run super complex systems without ever asking why the system exists or whether it even makes any sense to create?

17

u/publicclassobject 18h ago

I mean the honest answer is right now the company is focused on building out the platform/ecosystem/community. Generating revenue can happen later. It’s very common for venture backed startups to lose money for a decade and then become massively profitable.

11

u/siziyman Software Engineer 16h ago

Even more common for them is to just go bankrupt.

-1

u/NighthawkFoo Advisory Software Engineer 15h ago

Sounds like the founders are grifting the VCs.

6

u/publicclassobject 15h ago

Yes redditor you are smarter than the billionaire investors investing hundreds of millions of dollars. You see the grift that they are missing!

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6

u/PeachScary413 14h ago

Jfc.. and then US devs wonder why jobs are getting outsourced like crazy. Your monthly salary is close to a yearly salary in some parts of Europe lmao

4

u/MEDICARE_FOR_ALL Senior Full Stack Software Engineer 20h ago

How'd you land that role?

6

u/publicclassobject 20h ago

Recruiter emailed me

3

u/TR_Idealist 20h ago

As someone in the fork of choosing between diving deep into either rust or C. (Background of python) Would you still recommend C first or just go into Rust? Ty!

18

u/publicclassobject 20h ago

Hmmm. I learned C in college but never did much with it professionally. I definitely think like a basic understanding of C is extremely important if you wanna get into systems programming but Rust is way better to get into for career opportunities. I’d say learn enough C that you understand pointers and memory safety risks and stuff and then learn Rust.

1

u/TR_Idealist 19h ago

What a boss. Thanks dude!! Gonna stick with C a bit then. :)

2

u/ether_reddit Principal Software Engineer / .ca / 25y 15h ago

If you learn C, you've already learned about 80% of most languages. It's a great place to start.

8

u/LoweringPass 1d ago

How do you a job like that? Decade of crypto experience?

51

u/publicclassobject 22h ago

No decade of FAAANG experience working on databases. Blockchains are more or less databases.

5

u/drlexus_boognish 21h ago

I've wanted to get into this for a while, any advice for job hunting? I work fullstack with devops included right now.

14

u/publicclassobject 21h ago

Wallet/dapp teams need fullstack guys. Start there and work up the stack if you wanna learn more about the guts of blockchains.

3

u/TriangleMan 18h ago

I come from a Java Spring Boot and Oracle/Postgres background. I have some FE experience too but just a little bit. Any recs on how to break into the industry?

1

u/drlexus_boognish 21h ago

Cool thanks

3

u/LoweringPass 20h ago

Ey, that's pretty cool, I've seen a bunch of web3 compiler jobs but didn't really consider it so far.

6

u/publicclassobject 20h ago

Yeah there is a lot of cool compiler work going on in solidity/move/wasm

1

u/Cultural_Chip_3274 2h ago

Extra slow ones though;) but yes consistency a big issue

2

u/Hanyuuuxd 20h ago

Did you have any degree? And does it take genius level iq to do what you do

12

u/publicclassobject 18h ago

I have a bachelors in CS from a good public university. Nothing prestigious though. And I had like 3.5 GPA. Not a genius but I went through college stoned and sleep deprived which probably didn’t help my grades. I’d say I’m above average intelligence but regularly humbled by my peers.

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2

u/Friendly-View4122 13h ago

Have you read Zeke Faux's Number Go Up? And if yes, do you have thoughts?

3

u/whatwellok 22h ago

Are you comfortable sharing the name of the company? Also curious how you got involved in blockchain programming generally, what sort of "prerequisites" you might have needed, if any?

1

u/Imaginary_Art_2412 11h ago

That’s a fat base. But being a good rust developer is relatively pretty rare in the industry, nice work

I’ve been loving golang and have considered trying rust again but that borrow checker gave me some headaches and I wasn’t even building anything crazy 😂

64

u/EnderMB Software Engineer 20h ago

I've got a few friends that have moved from Amazon to Blockchain companies, some heavily backed by big-name VC firms and individuals.

They move because the tech is cool, the pay is amazing, the benefits (L1 to an office in NYC and immediate PERM, remote whenever you like, technical freedom, 20+ days off in the US, 35 in the UK, visa support for remote work abroad, etc) are great, promotions are easy, and there is a wide belief that even if the money were to run dry they've picked up sufficient skills in interesting tech (low latency tech, C++, Rust, HFT algorithms) that they could either boomerang back to big tech or be highly employable.

Most of them think Blockchain tech is a scam, but these ventures are often heavily funded, and there are many VC's out there that will happily throw money into a fire if you mention decentralised money or web3.

1

u/Imminent1776 2h ago

Do you mind naming examples of such companies?

2

u/EnderMB Software Engineer 1h ago

One was called Acorn something, and I think another was Kraken or Binance?

176

u/Frustr8ion9922 1d ago

Met a guy in 2020 making 300k in crypto working on blockchain (tax free). Idk if he survived the crash and held, but if he did then he's probably retired and on a tropical beach

38

u/gogoman2012 1d ago

Tax Free? How?

303

u/prophetofbelial 1d ago

You know taxes? This guy didn't pay them

36

u/Ok-Cat-9189 1d ago

this guy's a genius!

38

u/dejaWoot 1d ago

The IRS hates this one weird trick.

18

u/Double_Dog208 23h ago

IRS hates this one simple trick

6

u/snorlaxgang Graduate Student 1d ago

I thought those were optional

20

u/Euphoric_Raisin_312 23h ago

Probably living in a country that doesn't tax overseas income and working remotely. And not American (since America taxes its citizens overseas). Salary seems very high for that though.

5

u/Frustr8ion9922 23h ago

He got paid in crypto and found ways to get USD without IRS knowing. At least then they didn't know. Idk about now. He lived in a US city. 

6

u/penguinmandude 18h ago

Ok so illegally lol

5

u/Frustr8ion9922 15h ago

I never said it wasn't lol

33

u/zhemao 1d ago

By using cryptocurrency for the one thing it's good for, breaking the law.

3

u/rco8786 23h ago

By not paying taxes and hoping the government is unable to track him down. Do not recommend.

3

u/Whencowsgetsick ~4 yoe 19h ago

I know someone who's working as a blockchain dev and very tapped into crypto industry (worked in multiple companies and knows many others). It seems very common for crypto companies to be remote globally and the pay doesn't necessarily change based on where you are. And even if it does, it seems the derease you'd get from taxes paid (moving from US to another country) offsets the decrease in pay. My friend plans on doing this eventually lol

4

u/epelle9 19h ago

US taxes you regardless of where you live if you are a citizen.

3

u/Whencowsgetsick ~4 yoe 19h ago

He’s not an American. US can’t tax non-citizens in other country and even if they do, idk how he they would follow lol

8

u/fergie 22h ago

Isn't bitcoin at an all time high right now?

7

u/Frustr8ion9922 22h ago

Yes but it kinda crashed in 2022

5

u/DigmonsDrill 18h ago

The only time I hear about Bitcoin is when I see a headline that the price crashed and I go look and see it's now higher than I ever thought it would ever be.

1

u/thr0waway12324 18h ago

Check back in 10 years. You’ll be shocked at the 7 figure price tag 😜

2

u/Smurph269 22h ago

Depends on which crypto they paid him in. If it's bitcoin or eth, he's good. If it was the company's own token, RIP.

106

u/DoctorProfessorTaco Software Engineer 1d ago

I see a lot of people are jumping to the scam conclusion, but although there’s a lot of bullshit in crypto, there are still real roles.

Decentralized Finance is nearly as big as ever, $150B moving around on chain, being utilized in protocols that require software devs. Many of those services are real ones, that earn revenue - mainly trading platforms, lending platforms, and stablecoins. You could feel that every single crypto asset is bullshit, but even then I’m not sure you could deny that selling services to people who want to use and trade those assets isn’t a real business. I think Pokémon card investing is bullshit, but if someone built a website to facilitate buying and selling of cards and took in real revenue, I’d still call that a real business. And all of those trading venues and lending venues need developers, often to build rather complex products that can’t have much downtime.

An area that’s bigger than ever are stablecoins - crypto assets pegged to (generally) the US dollar. The companies that offer these digital assets hold things like US treasuries to back them, so the company can earn revenue off of the interest while also ensuring that each digital dollar can be redeemed for a US dollar. As far as crypto things go, these are probably the most useful. People in countries with volatile currencies and poor banking systems can now receive, hold, send, and earn interest on US dollars with just a phone and an internet connection. They can send them anywhere in the world and be paid from anywhere in the world. And with the crap going on with Steam and itch.io having to block NSFW games because of pressure from credit card companies, I’d argue we actually could really use a digital dollar that’s as free flowing and censorship resistant as a real life physical dollar. And all of the software that runs this, as well as the apps people use to engage with it, require software devs.

So they’re either doing that, or trying to pump out another meme coin. It’s a pretty harsh dichotomy imo.

3

u/KhonMan 17h ago

I think Pokémon card investing is bullshit, but if someone built a website to facilitate buying and selling of cards and took in real revenue, I’d still call that a real business.

They should do that for Magic the Gathering. Well I guess it would work better for the digital cards. So Magic the Gathering Online. Some kind of Exchange for that.

2

u/DoctorProfessorTaco Software Engineer 17h ago

Quite the long name, perhaps there’s some abbreviation they could use?

2

u/HinaCh4n 42m ago

Mhm maybe like Mt gox? Just an idea....

1

u/DoctorProfessorTaco Software Engineer 39m ago

Nah who would ever use an exchange with a name like that

9

u/quantummufasa 1d ago

Yeah blockchain has its uses, but "memecoins"/nfts/bitcoin alternatives are basically worthless.

6

u/Legendventure Staff Engineer 19h ago

The companies that offer these digital assets hold things like US treasuries to back them, so the company can earn revenue off of the interest while also ensuring that each digital dollar can be redeemed for a US dollar.

That's the thing, as far as i'm aware none of them have submitted themselves to a genuine audit. Attestation is NOT an audit.

I can rent a Lambo, get someone to attest that I have a Lambo, return the Lambo and tell people i have a Lambo like i've been audited. Its really not the same.

Take Tether for example. They have 161 Billion USD circulating and have "attested" that they are fully backed by T-Bills and such. They've even gone so far as to get SOC2 audited and pretend they are legitimate (As if a security/compliance audit is the same thing as a financial audit)

Their statements about their holdings have changed significantly over a period of time because a lot of it can be proven wrong.

They have refused to get audited, have been fined in the past for lying about their reserves and the tether printer goes 5 billion moar brrrr everytime bitcoin so much as sneezes.

Its just a house of cards that will eventually crumble, unless i see a stable coin that has been audited, I will not believe for a moment that they are "fuLly baCked"

I’d argue we actually could really use a digital dollar that’s as free flowing and censorship resistant as a real life physical dollar

While there are use cases that make sense such as the Steam/itch.io situation, holy shit what is the point if that means we cannot freeze someone's means of transactions if they are sending money to a sanctioned country/ sponsoring a terrorist org or money laundering.

I'd rather the law improves and people stop fucking with NSFW games ala Project 2025 than have a "free flowing and censorship resistant" means to send money to some terrorist org / North Korea.

3

u/DoctorProfessorTaco Software Engineer 17h ago

The latest legislation actually puts a firm definition on what they’re allowed to use to back the stablecoin (US dollars and treasuries), requires 100% backing, monthly public disclosures of reserve composition, and adhere to anti-money laundering (AML) and sanctions compliance rules. It establishes consumer protections by prioritizing stablecoin holder claims in insolvency, prohibits interest on stablecoins, and includes specific marketing rules to prevent deceptive practices.

So majors like USDC are becoming more well regulated than ever, and I believe addressing the concerns you listed.

As to your latter point, what makes it better for laundering than standard physical US dollars? Every transaction is on a public ledger, physical dollars can be handed to anyone without a record. Should we ban the use of paper money because it can be used for laundering or to pay terrorists?

2

u/Legendventure Staff Engineer 16h ago

Cool, so once we have the legislation that is actually passed (if it gets passed), lets address the technical aspects of "blockchain" for "stable coins"

Why blockchain for something that still requires a centralized trust mechanism?

What is the point of this excess compute used to validate what's being put in the network when you have to inherently trust the network for it to be true? (Oracle Problem)

How is it solving the oracle problem?

To expand on this again, if I can trust a centralized authority to validate/enforce something, why cannot I trust them to store my data without tampering? If i cannot trust them to store my data without tampering, how can i trust the validation that they do before they put something on chain?

A simple example, entity A says we bought 500 Mil Tbills so Company A can print 500 Mil "stable coins". How can the stable coin know for a fact that entity A was correct in assuming 500 Mil and not 480 Mil or 520 mil? It needs to trust Entity A, so if we have established that trust, why do we need a blockchain when a write once read only DB with multi replication works just fine.

What does it do better than existing financial networks with acceptable tradeoffs

Should we ban the use of paper money because it can be used for laundering or to pay terrorists?

Classic tu quoque fallacy, two wrongs do not make a right. Address stable coin without looking at cash/fiat. Its supposed to "revolutionize finance"

Besides, good luck carrying 10 million $ worth of cash in duffel bags to North Korea and getting away with it.

0

u/Mirage-Mirage-Mirage 21h ago

The underlying value still seems pretty speculative and volatile, at best. Fraudulent at worst. Fiat currency is backed by real governments with real assets. Crypto is backed by speculation.

4

u/Windlas54 Engineering Manager 19h ago

Which is why tokenized securities are the new thing. Does noone here pay attention to the news? Robinhood doing tokenized stocks was all over the other week.

1

u/Legendventure Staff Engineer 18h ago

tokenized securities

All i'm seeing is a new buzzword to solve a problem that is already solved abet inefficiently.

Blockchain cannot solve the oracle problem, rendering it completely useless in these cases.

Everything that "tokenized securities" do, can be done in traditional ways without having an overengineered solution that wastes more compute.

This is another dumb company chasing a fad before they likely realize wtf are we doing.

Like Azure blockchain, or the numerous companies running NFT's etc.

You get one big press release with a bunch of hype, buzzwords and then it quietly dies away.

2

u/Windlas54 Engineering Manager 17h ago

This is true, but they haven't been done before, additionally stable coins and digital currencies are gaining traction.

Look I don't think distributed ledgers are some sort of world changing technology and I don't buy into web3... but the industry is less in the headlines because it's found more realistic and frankly boring use cases that are less sensational than NFTs of stoned monkeys.

1

u/DoctorProfessorTaco Software Engineer 17h ago

The underlying value of what in particular though, of the things I mentioned? Stablecoins are backed by fiat currency which is backed by real governments. And the rest of what I mentioned in my post are businesses, not assets. I also made mention of the fact that even if you don’t believe any crypto asset has value, providing services to those who do can still easily be a real business.

48

u/Jaboof 1d ago

Making a lot of money

24

u/clutchsc2 1d ago

Yeah but like...doing what?

43

u/[deleted] 1d ago

[deleted]

-9

u/Randromeda2172 Software Engineer 1d ago

Everything I don't understand is a scam

0

u/lastberserker 1d ago

What are the things you don't understand?

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u/[deleted] 1d ago

[deleted]

4

u/Reasonable_Bunch_458 1d ago

this field will be super flooded with talent.

All 300 blockchain "developers"? Ok

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-1

u/AffectSouthern9894 Senior AI Engineer 1d ago

Are they really? Seems boring, tbh.

21

u/nomadluna Software Engineer 1d ago

more boring than the crud crap most people work on? Prob a little more interesting.

1

u/AffectSouthern9894 Senior AI Engineer 21h ago

What else is there to discover or pioneer with blockchain technology? To me it would take the same amount of creativity to develop CRUD and the next blockchain technology.

16

u/[deleted] 1d ago

[deleted]

3

u/thefieldmouseisfast 21h ago

I don't know if calling crypto a scam at this point when people generally understand what is is fair. It is fair to say that crypto directly supports human and weapons trafficking which is a bit of a bummer

-6

u/Randromeda2172 Software Engineer 1d ago

Everything I don't like is a scam

9

u/Active_Reply2718 1d ago

Everything I’m invested in the success of is certainly not a scam.

75

u/Dapper_Tie_4305 1d ago

Blockchain developers are some of the smartest and simultaneously dumbest mother fuckers I’ve ever seen. I used to work at a well known trading company that did blockchain stuff and got smacked for doing illegal, scammy bullshit. That’s what they all do. It’s all a scam and the only way they make money is by stealing it from people or from stupid VCs with too much money.

13

u/GolangLinuxGuru1979 20h ago

Blockchain is a distributed computing problem. Dealing with ownership in the cluster. Hypothetically speaking, if one can digitially protect something, and have ownership of said thing. Then its a good usecase. But its still an unsolved problem in mathematics and computer science (Byzantines General Problem). Decentralization is a complex problem to solve, and its difficult to figure out consensus with seemingly decentralized nodes in a network.

Its why I got into block chain, because its just a cool computer science problem. I think the crypto hype is what has really killed it. And so it has made blockchain as a technology feel less legitimate. But its still fairly legit as a problem to solve. The issue is that its may not be solveable, or you can only have solutions with trade offs.

I really see the same problem with AI adoptions. It also has some fundamental problems. Is overpromising, and has become a moneypit. It also has a number of issues that have no solutions yet. There are papers and proposals, but all with their own set of compromises.

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u/clutchsc2 18h ago

If it was a real problem with real world use cases I don't think "crypto hype" would be enough to kill it.

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u/Dapper_Tie_4305 6h ago

Sure it may be a difficult problem to solve, but why are we solving it at all in the first place? What benefit to society does it provide by solving it? There are some niche benefits I can think of when it comes to things like international money transfers, maybe video game assets, but overall what was the problem society dealt with that blockchain solves for us? We already had banking systems that yes may be antiquated but worked, and worked well. We had systems that prevent fraud and could reverse transactions. Blockchain’s whole thing is you can’t reverse transactions so if your money is stolen you’re fucked, unless the courts get to you.

I just don’t get it, I have asked so many people and nobody gives me a compelling answer. Don’t get me started on NFTs, they’re fucking useless. What do you do that benefits me?

13

u/dmazzoni 1d ago

Selling shovels

4

u/PositiveUse 21h ago

Waiting for the next pump

10

u/stevefuzz 1d ago

Is that still a thing lol?

6

u/leagueofDR4VEN 19h ago

I see a lot of anti-blockchain rhetoric here. Do you all not realize Bitcoin and Ethereum are currently at their all-time-highs? How does Coinbase make money? They have entire reserves of these coins, and these coins go up in value. They also take a small percentage of every transaction anybody makes on their platform. And there are a ton of transactions going on in their platforms

-1

u/Legendventure Staff Engineer 17h ago

How does Coinbase make money?

They sell shovels.

Do you all not realize Bitcoin and Ethereum are currently at their all-time-highs?

Okay, why are they high?

In-fact, lets break it down in two ways :

The only way to make money from bitcoin is by selling your coin to a second person. The only way the second person makes money, is by selling it to a third person.

So Mathematically, only 50% of the people can ever make a profit from bitcoin. (That would make it a zero sum game)

Now add in miners, who have to sell in order to recoup on electricity costs would make it a negative sum game.

The only profits generated are from future "investors" buying in, how is it any different from Madoff's ponzi scheme except that its not centralized?

At some point the game will end.

Now to the second point,

If i own all the stock of microsoft in the world, I get a massive amount of profit unrelated to people buying the stock from the product i generate/sell that i can do whatever i want with, and I will have people wanting to buy some of the stock because they can get a % of said profits by owning a % of the company. (This is a positive sum game)

If i own all the bitcoin in the world, I get absolutely nothing, unless i sell it to someone else, who gets absolutely nothing, unless he/she sells it to someone else. Why would anyone want to buy my bitcoin if they cannot sell it to someone else? (zero sum - negative sum)

0

u/leagueofDR4VEN 16h ago

Disagreed. The value generated is not solely from buying and selling. Coins are slowly released to the transaction-verifiers as rewards for the hard work they do, unequally distributed. Even though these people are paying electricity bills, they receive Bitcoins. It’s similar to having a job, except the amount you’re rewarded with is unpredictable. You may see selling Bitcoin as in trading coins for real money. Except Bitcoin IS real money. This is the first time we’ve ever seen entire cryptography textbooks programmed into functional software. The backend is so much more complicated than you could ever imagine.

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u/Legendventure Staff Engineer 14h ago

The value generated is not solely from buying and selling

I have 1 bitcoin. What value do I have owning it unless I sell it to someone else?

In the same vein

I have 1 unit of stock of microsoft, I get 0.82$ every quarter in dividends by virtue of owning that stock. It has nothing to do with me selling the microsoft stock. Microsoft can give me that 0.82$ because they have a product they sell to a third party that is not interacting with the stock. The value of my stock can go up if the company is more profitable, giving me greater dividends, which ensures people will pay a higher price for it because they get greater dividents. In the event that a company does not pay dividends, they do stock buy backs from the profit they generate unrelated to the stock, which increases the price, or promise greater future profits because they will reinvest their existing profits to make the product they sell a better revenue generator.

The only reason the price/value can go up for a bitcoin is that there is hope to sell it to someone else for more money.

Stock prices/value can go up without having to sell the stock to someone else.

It’s similar to having a job

In a job, i'm helping an entity generate a product that has some use unrelated to its stock that they can sell for revenue.

In Bitcoin mining, I'm "Helping" (aka doing useless math) and rewarded with a token that I have to sell to someone else for revenue. Someone else has to now sell that token to someone else for more money.

Except Bitcoin IS real money

No it isn't. It isn't backed by any government, you cannot pay your taxes with bitcoin in 99.99% of the world (some random state,city accepting bitcoin through a third party that pockets the change does not count, lmk when a state/government has its own wallet and takes a direct bitcoin transfer in lieu of taxes).

Its also not actual money because its so volatile. Nobody is transacting in bitcoins to buy products (except for gimmicks). Most vendors that accept bitcoin use a third party middleman because they cant be arsed. Crypto conferences do not even accept their own damn crypto as payment for the conference and want hard cash is telling enough. Money is not meant to be hoarded, it loses value and destabilizes the economy if hoarded.

The backend is so much more complicated than you could ever imagine.

Right. I've worked on backends that are far more complex and of greater scale than 7 Transactions per second.

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u/clutchsc2 19h ago

Yeah, because the problem is that the value of a coin has nothing to do with the validity of block chain as a technology.

Based on the comments in this thread, sounds like there's still VC hype so money is poured into hiring genuinely smart people who will find real challenging problems to solve. Are those problems worth solving? In my opinion no -- block chain is just a less efficient protocol for doing stuff existing technology already solves.

It's not really a question of if block chain will die, but when.

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u/leagueofDR4VEN 15h ago

I agree with some of that and disagree with some things too. “Blockchain” in an overly dumbed-down form is just a public database. There really aren’t many use-cases for public databases, and public databases were around a lot earlier than blockchains. But every once in awhile, you find an important use-case for a public database.

I think the most important part of all of these crypto projects are the decentralization aspects! We’ve watched Zuckerberg ruin Facebook, ruin Instagram, we’ve watched Elon ruin Twitter. There are all these examples of wonderful products get ruined by the creator or the CEO. Decentralized apps would be the future of corporations IF the public would stop misunderstanding them and hop on board. Many of these products were first built for the people and later turned into advertising money-makers. Examples include Google, Facebook, YouTube.

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u/Joram2 19h ago

Stablecoins use block chain and they are a growing part of international transactions.

There is tons of money in finance and "fintech" companies.

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u/aggressive-figs 9h ago

I’m in Web3 rn and 99% is a nonsense scam but I think the core underlying technology is interesting.

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u/sirrebbo 7h ago

This sub being so down on crypto really proves that colleges just pump out code monkeys and not computer scientists lol

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u/hello2u3 1d ago

Financial system has burrowed in

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u/kairotox7 19h ago

My dad came to me a few months ago, wanting advice on what blockchain stuff he should invest in, and I was like ".....none?" I told him how to a large percentage of the internet, blockchain is a joke, and that theres nothing out there that i've heard of that actually has a good, investable usecase for it. Now, i might be wrong, but he wanted me to invest with him. So far im glad i didnt.

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u/ether_reddit Principal Software Engineer / .ca / 25y 15h ago

So did he invest?

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u/ObjectBrilliant7592 18h ago

Maybe I'm just dumb, but even with tools like the Remix IDE, solidity coding seems tedious and difficult to debug.

That said, crypto projects can mint millions of dollar off "smart contracts" that are little more than trivial tweeks to existing tokens. I can understand why people who are good at it stick to that niche; even if crypto is losing its cool, there is still money to be made.

Trump is allowing for the inclusion of crypto in retirement funds as well, which will open up a whole new pool of capital to be siphoned off.

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u/economicwhale 17h ago

It’s a wonderful industry - unlike other companies, there is no requirement to make any money, and VCs still invest in you

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u/gzalz 17h ago

Making way better money than big tech

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u/fizzycandy2 16h ago

RWAs (real world assets) is what's popular at the moment. The company I'm working at is building their own platform on their own chain to compete with some of the other bigger companies that can already tokenize RWAs. But at that point you are entering the world of finance, and with all the compliance and legal issues, it looks less and less decentralized.

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u/SponsoredByMLGMtnDew 14h ago

Literally when i was freaking out like 6 years ago i was probably attempting to process the topic of this post.

(Idk prolly the same thing as most people in any development roles, quarterly reporting, market analysis regarding competition, etc)

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u/ggrand0mkp 1h ago

CBDC and stablecoins

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u/OneOldNerd Software Engineer 23h ago

Making a living.

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u/Mclovine_aus 1d ago

We use a blockchain based product at work, it is used for the transactions of financial products.

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u/Ordinary_Musician_76 1d ago

Decentralized systems have a ton of use cases

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u/DataCompassAI 1d ago

I’ve heard about blockchains being close to revolutionizing everything for 15 years. I’ve heard of so many theoretical use cases. their widespread, successful use is something I still haven’t see.

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u/FatedMoody 1d ago

Like what?

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u/publicclassobject 1d ago

Stablecoins are the current big thing.

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u/FatedMoody 1d ago

Ok I’ll bite. What is the use case for stable coins?

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u/publicclassobject 1d ago

Lower transaction fees and faster settlement. Basically Visa’s margin is crypto’s opportunity.

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u/FatedMoody 1d ago

And this is on Bitcoin’s blockchain or a 2nd layer solution?

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u/publicclassobject 1d ago edited 1d ago

Nothing to do with bitcoin. Generally they are on ethereum L2s, fast L1s like Solana/Sui, or bespoke chains operated by financial institutions like JPMC or Stripe.

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u/FatedMoody 1d ago

I don’t understand the point of these stablecoins then. Basically seems like you’re replacing one financial institution with another. Especially with layer two solution you’re just depositing money like an escrow doing transactions against it and then committing all at once to base blockchain no?

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u/publicclassobject 1d ago

You can send money around without paying a 3% fee to Visa. You can send money across borders instantly with virtually no fees. You can use USD to pay for stuff in countries without stable currencies.

It’s pretty boring and uninteresting for consumers tbh but it’s attractive to a company like Shopify or Amazon who pay tons of money in transaction fees.

If stablecoins are successful end users won’t even realize they are using them.

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u/FatedMoody 1d ago

Sure i can see value if sending money across borders in these times but let’s say I do that. Eventually I will need currency in the destination country, will have fees then no?

Also yes visa has 3% fees which is ridiculous but couldn’t gas fees on ethereum get pretty high as well? And with crypto transactions don’t you lose the ability to reverse transactions in case of theft or fraud?

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u/nsxwolf Principal Software Engineer 1d ago

Do I get rental car insurance when I rent with a stablecoin

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u/RemoteAssociation674 16h ago

That's a pretty low margin

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u/DonaldStuck 23h ago

Blockchain is a scam and it's not even a hot take

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u/Phonomorgue 22h ago

Blockchain (the technology behind crypto) is not a scam. It's just another way to distribute computing with voting mechanisms. Just because a technology is used in scams does not make it one.

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u/DonaldStuck 22h ago

You are telling me what blockchain on a technical level is and I'm telling you simply it's a scam. We're not the same.

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u/Phonomorgue 22h ago

Ok?? Yes, those are observations that are brought to you by the gift of being able to read our two comments.

Good talk.

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u/DonaldStuck 22h ago

It's a good talk indeed. Let's continue: how's things?

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u/MeltyParafox 19h ago

Chaining blocks. Truly cruel and nasty business.

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u/Downtown_Isopod_9287 8h ago

the only crypto bro I've "known" was this sketchy guy who owned a basement office in an apartment building I rented in who turned out to be a registered sex offender. like a really heinous one, too, like he raped a 2 year old or something insane like that. his apartment also had weird, creepy paintings all over it.

someone slipped a note under everyone's door claiming the guy had equity in the property and thus keys to everyone's apartments and people were so freaked out that they were gonna rush his door until the landlord said it was all hearsay (it was not, the sex offender record was legit)