ETFs are simply mutual funds married with high frequency trading.

Read about Authorized Participants if you're confused as to what HFT has to do with ETFs. Overall it's a decent improvement over the very old idea of open-ended funds, given the recent digitalisation of trading and super fast market making with tiny spreads.

PS. I like ETFs, I think they're achieving exactly what are they supposed to achieve.

Also, read the prospectus of any ETF you already own, and you’ll get the gist of APs, enough to understand why your fees are so low.

There's also securities lending (to short sellers), many ETF sponsors retain all proceeds from securities lending for themselves. This is similar to how many brokerages earn most of their revenues by taking a spread on cash balances, so they can charge very little on transaction costs (i.e., they pay you less for unused cash than money markets pay them). After all borrowing money is the same as shorting cash, so there's nice symmetry here :)

ETFs are still subject to whatever country's tax laws. Imagine putting your retirement into various funds only to have a Brexit type situation destroy your hard earned money.

Bitcoin is borderless, permissionless storage of value. Game theory built in (anyone powerful enough to attack the network is better incentivized to participate in it.)

I’m trying to imagine the average Briton putting their savings in Bitcoin. Maybe they buy £50 worth on some local exchange every month. Will the money be there in 30 years?

Seems more likely that they’re going to be wiped out before then by either a fraudulent/bankrupt exchange (if they never moved the funds to a Bitcoin address) or by losing the private key (if they did).

This technology is absolutely not where a Sussex nurse should park their hard-earned pennies at this point.

The same monthly payment into globally diversified ETFs is almost guaranteed to be liquid and in gains in 2050. If it’s not, the global collapse has rendered the Bitcoin thesis untenable too.

That's mostly because 0.5% of their net worth is something completely insignificant. Graham talks about this problem in "The Intelligent Investor", about how active management of assets is actually not suitable for most people, either because they have too little capital to make any difference or too little time to get good at it. On the other hand, a billionaire not committing 0.5% (or more) of their net worth to Bitcoin is passing on a potentially very lucrative put option on the global financial system.

Also, there are "safer" / "more classic" way to buy such puts, gold bullion works wonders in times of severe disruption, and I don't think it's unreasonable to commit 5-10% of your capital to gold, almost regardless of personal situation and net worth levels. Of course you never know when the next "Executive Order 6102" happens, but there's kind of no good solution for that :(

(all of the above are personal opinions, feel free to disagree as much as you like)

I don’t really disagree, but this is very different from the original argument that Bitcoin is “the greatest savings technology ever invented”. With a recommended allocation of 0.5%, it doesn’t fit that description.

Bitcoin is clearly not appropriate for "savings", just look at the realised volatility. It may become appropriate in the future, but when that happens the "put on financial system" will be realised, i.e. the convexity proposition will be gone. In fact if "Bitcoin is now appropriate for savings" in the sense that The Economist and other mainstream is not ashamed to write about it and central banks have Bitcoin holdings next to their gold holdings then that precisely means that the convex bet has paid off :)

I used to hold Bitcoin at various times in the past, and I would absolutely not recommend Bitcoin to anyone unless they truly can stomach total loss on the "investment". This means appropriate position sizing, alignment with current personal financial situation and personal plans/goals/objectives. And don't even think about leverage here.

> still subject to whatever country's tax laws

So is Bitcoin.

Bitcoin is only subject to tax if you move it back into the controlled financial system.

Otherwise it's just numbers hopping around anonymously on a ledger.

> Otherwise it's just numbers hopping around anonymously on a ledger

That’s tax evasion.

I know it’s chic to be callous about tax fraud in some cryptocurrency circles. But the same has been true of cash, art and bearer bonds for centuries.

It's not tax evasion if the hops are non taxable events, and the privacy of wallets enable anyone to deny it.

This is why Bitcoin is an existential threat to government power. I personally think it's empowering and great for the individual, however if you tend towards more statist views then this would seem like anarchy.

Many of our governments are liberal democracies. It sounds less positive when you rephrase it like that; ie: "Bitcoin is a threat to liberal democracy"

I don't want some drug lord to pump/dump/coerce/tax-evade their way into being the richest person on my continent, and then hire an army to take my nation over. That is easier with crypto currency than it is with fiat.

The tech community dropped the ball in the '90s by being panglossian about the potential problems with the web. It would be nice if, this time, we could get ahead of the ball with crypto currencies.

Though it expresses valid concern, it doesn't make especially compelling argument because it's too easy to flip it: majority of gov'ts are not democracies, and there are lots of places where organized crime, and officials are the same people. Shouldn't we praise a possibility for people to circumvent corruption, and crime, not enabling all of these, and also repressive apparatus with their hard-earned money? I suppose life's not that easy for us to have just one morally correct choice here.

Yeah I think those are valid concerns.

The ideal case would be a hybrid system of state fiat and cryptocurrencies where liberal democracies incentivize their citizens to use fiat through better governance and services while also respecting the sovereignty of individuals to accumulate value that cannot be debased by dumb political decisions.

Why not both?

> Many of our governments are liberal democracies.

The liberal democracies are pretty open and positive on cryptocurrencies. So no, it does not seem to be threat to them.

Instead, it is more of a threat to the less liberal countries.

OP advocates wilful tax fraud [1].

If large portions of the economy aren’t paying taxes, I am not paying taxes. This breaks down the social contract. Given authoritarian nations’ increased force projection, this vision of cryptocurrencies first corrodes liberal democracies, where those not paying have courts and Constitutions between them and the state.

[1] https://news.ycombinator.com/item?id=24953317

> OP advocates wilful tax fraud

Nope! Liberal democracies allow cryptocurrency and it very well could be the case that some of these crypto events are non taxable events.

Thats just working within what liberal democracies allow.

> have courts and Constitutions

Courts and constitutions are pretty important in liberal democracies. I support the protections that those provide, personally.

ETFs are all managed by the banking system that I'm happy to be outside of at this point. Thanks, but no thanks to GLD and other scams that ,,may send the value of gold in dollars if it doesn't have enough''