Crypto allowed me to transfer my wealth across border and helped me survive while Visa blocked my cards and local banks harassed me with their KYC/AML requirements and creative nonsense based out of fear of the US and EU sanctions. The utility of that is much higher than any dividends.
> Instead it's a pyramid scheme, easily replaceable by any other shitcoin out there, and the value of it should be close to $1 or less.
Wow, shitcoins sound so much worse than pieces of paper that are propped up by a legal decree, which legitimacy rests solely on the monopoly on violence. Wait, does it actually sound worse?
and a currency whose value approaches zero as time grows. if bitcoin is bad, how is that much better?
run businesses? to say nothing about whether those businesses are sustainable or actually generating wealth & human prosperity. if you look at all the worst aspects of the economy, they're based in expansionary monetary policy and high time preference
> inflation as the thing that keeps money in circulation
it keeps people spending money on usually wasteful things and incentivizes the consumption of cheap goods, if you want an economy built on prosperity and enduring goods, you need to actually incentivize saving (not wasteful consumerism)
surely people value things other than paying off liabilities?
why are you getting so defensive about the fact that fiat currency exponentially decreases in value
This is an attack on this whimsical philosophizing crypto-boosters use as a defense. No one cares about this "what is money" commentary. If you believe in your moon money so much why not just actually use it as money? Of course you'll have to lose those gainz but real money is just worthless paper right?
I don't buy stuff with it though it's being used to facilitate transactions for people. I route around $40k a month.
Whether it be war, tyranny and unjust sanctions, crashing economies, or just avoiding the arbitrary and often unjust fees, rules, seizures, and bannings imposed by private payment networks and services like paypal or visa, humanity will always need way to exchange cash. I for one am glad crypto (as a means to transfer funds) exists, glad it will continue to exist, and will continue to support it in any way I can.
To me, what it provides to humanity far outweighs the negatives.
Trillions of dollars are stolen from the people by money laundering and tax evasion every year, and cryptocurrencies are one of the ways this is accomplished.
Yes, some people live in countries where the law is hostile. However, your solution, "Let's evade all laws concerning money," is WORSE, not better.
If the argument is bad stuff possible then your argument is to abolish government.
We cannot presuppose that breaking the law is necessarily bad or that following the law is not bad.
What took you finance apologists so long to figure that one out? That was what - last summer or the summer before that SWIFT finally figured out how to process text fields independently, so line items didn't get confused with addresses? Talk about high-tech!
I'm sure your cousin's friend's sister's neighbor's dog flagged a real-life criminal account once, and maybe even some girl selling feet pics, but the overwhelming majority of people I've heard in my 30 years here have had their accounts flagged for what the common person might describe as "nonsense" and/or "bullshit".
Man, I hate banker simps.
I'm not going to pretend to be surprised - many American conservatives have expressed the same sentiments to me. However, I am surprised you post it in a public forum.
In my view, society is propped up by future expectations. This includes the value of government money.
No one else denies this or doesn't believe it's true, I hasten to add. For most of us, we think that this is a good thing, but also such an obvious thing that it doesn't need to be mentioned.
The people who keep mentioning it are people who think it's a bad, bad thing. They want everyone to have access to violence at all times.
The sane majority does not.
No. If your going to targrt political stratas, don't be narrow sighted.
The BLM and Antifa riots of "Defund the police" is exactly about the same concern, and supporters caused widespread violence to prove that point. There's a different reason, but many prominent Democrats urged those protests on, making it more broad than just some leftists commies.
The major difference is that BLM/antifa targeted local police with a national organization and got their way in many places, whereas conservatives are weary of the federal government are just some disorganized people that become easily targeted by the feds.
It's also worth mentioning that '0' and 'many' are the only options that offer even the possibility of uniformly distributed means of violence. IMO the population has highest security when violence is not monopolized by a privileged elite such as police officers and armed forces.
>society is propped up by future expectations. This includes the value of government money.
Then I think Ludwig has a point here. It's constantly touted that USD value is propped up in part because you have to pay taxes with it and backed by Nobel Peace Prize winners who bomb kids with drones from 5000 miles away. Thinking "hey some powerful people will toss me in a cage if I don't get this paper" may create real economic incentives but maybe we should be thinking about which incentives we want to be creating.
*Note: I fought in the civil war (YPG) in Syria. People I were with were much freer under civil war than when Assad controlled country.
I have no idea where you came up with "Many is civil war". Quite the opposite. Civil war erupts when one entity has a monopoly on violence and enough people decide that they've had quite enough of that, thank you very much.
There are all sorts of sayings. Is this one true?
The United States is the most heavily armed country of any size in the world. It is also more heavily armed than any time in its past.
And yet politeness appears to be at an all-time low. Certainly, a lot of political figures say things that are just astonishingly rude and horrible and false, things that would have destroyed their careers even twenty years ago but seem to make them very popular today.
It seems that saying is wildly false.
> I have no idea where you came up with "Many is civil war".
Probably they are knowledgeable about history, as their statement is simply true.
> Civil war erupts when one entity has a monopoly on violence and enough people decide that they've had quite enough of that, thank you very much.
I'm baffled as to how this makes sense to you.
How exactly do these people "decide they have had enough of that" without abrogating the states monopoly on violence? Surely by the time you get to civil war, there are _two sides fighting_??
It's like you just cut and paste a lot of slogans and stop thinking critically there.
I really suggesting reading some history.
So you use crypto to break the law, and you believe you are justified in doing that. Thing is, most of the people using crypto for crime are simply using it to not pay taxes.
> Wow, shitcoins sound so much worse than pieces of paper that are propped up by a legal decree, which legitimacy rests solely on the monopoly on violence. Wait, does it actually sound worse?
Yes, it absolutely does sound worse.
On one side, we have the United States - the largest economy in the history of the world, backed by the government with the largest income of any government in history, a court system, the police and their "monopoly on violence".
On the other side, you have a cryptocurrency backed by nothing, created by anonymous individuals, with no form of conflict resolution whatsoever.
Cryptocurrencies have been around for almost as long as the smart phone. You would think one or two of you would have taken even a first year economics course during this time.
Using it for crime? That just makes crypto even more similar to traditional finance.
> Yes, it absolutely does sound worse.
So you think all countries should switch their currencies to the US dollar? Do you think it is just as good for countries to give up their financial sovereignty as it is for common people?
> Cryptocurrencies have been around for almost as long as the smart phone. You would think one or two of you would have taken even a first year economics course during this time.
I was a teaching assistant for a graduate course in macroeconomics in a top 50 department during my PhD. Arrow-Debreu and all that.
I don't think _anyone_ is against using cryptocurrencies as a way of transferring money. It doesn't make sense to transfer wealth via something that rapidly changes its value, right? Because means of transferring wealth requires preserving the value of the wealth. Bitcoin today does not preserve its value, as evident by the rapid decline in value in the past few days.
https://monoskop.org/images/c/cd/Lukic_Kristian_2013_Artific...
The very first paragraph of the page is helpful:
> The terms special edition, limited edition, and variants such as deluxe edition, or collector's edition, are used as a marketing incentive for various kinds of products, originally published products related to the arts, such as books, prints, recorded music and films, and videogames, but now including clothing, cars, fine wine, and whisky, among other products. A limited edition is restricted in the number of copies produced, although in fact the number may be very low or very high. Suzuki (2008) defines limited edition products as those “sold in a state that makes them difficult to obtain because of companies limiting their availability to a certain period, quantity, region, or channel"
I am an art collector. None of it is rare or wildly expensive. Nor do I expect to resell any of it.
It might shock you to discover that I collect that art simply because I enjoyed looking at it and having it. I go to art galleries to see art that I do not own, not because of its financial value, but because I enjoyed looking at it.
The idea that art is exactly an precisely an investment vehicle is simply false to the fact. And honestly, I find it horrifying and empty.
Personally I love looking at a nice shiny piece of gold and artfully stacked pile of $20s.
- BTC was originally intended to support smart contracts
- but people pitched “digital gold” because they didn’t understand that vision
- then the capability was removed for “safety”
- and then later ETH came along (with a different model), but one that still is too costly for general compute trade and which is inflated by the gimped-BTC bubble
- we’re watching that fools gold bubble pop
- and new ideas about compute for sale emerge [1]
And in the near future:
- eventually, tokens will represent real things with the interop currency being the one for buying compute time
[1] - eg, https://github.com/lucasgleba/zkRiscV
2. So called, "Money" does not pay dividend... does Gold pays dividend? now on the other hand, I can lend you BTC or Gold and ask you to pay me back the principle + interest on it in BTC/Gold etc so that is that... Fiat money can yield as it can be created of thin air, no actual work required (i.e. mining for Gold or BTC)
3. Any currency, company also can be replaced by something else out there but won't why? network effect, trust and liquidity matters...
Hertz: https://www.cnn.com/2021/07/01/business/hertz-bankruptcy-car...
2. Money does pay "dividend" - it's called "interest".
Only if you lend it.
Money sitting around under a mattress tends to lose value due to inflation.
Actual specie, dug out of the ground, tends to hold its value, relatively speaking. Sure, their may be shocks like discovering a whole continent made of gold but those are pretty rare.
Bitcoin, who knows? It simply hasn’t been around long enough for its place on the money pyramid to be found.
2.a. Gold is an asset and doesn't need to pay dividends as it has intrinsic market value.
2.b. Loans and interest are contractual agreements, i.e. financial instruments unto themselves that generate value. Just because you get suckered into agreeing to a hobby money loan doesn't mean the hobby money has any value.
2.c. Variable cost doesn't equal value either. You can burn a stack of $100 bills but that doesn't mean that brief fire has any value, but it sure as shit didn't help the planet either.
Bitcoin's project is that it's a collectible with limited supply.
I wonder why that is...
> it's a pyramid scheme
That's your opinion.
> easily replaced by any other shitcoin
It's not.
https://www.ccn.com/dutch-bitcoin-trader-suffers-brutal-tort...
But for example, Argentina has incredibly harsh currency controls, any freelancer or company that tries to export goods or services gets paid half the value per dollar and is forced to sell their dollars to the government
While companies can't really avoid it, most freelancers go around the control by using crypto and so can get the full value of their work
This just seems apt: https://xkcd.com/538/
The IRS seized $3 billion worth about a year ago. https://www.irs.gov/compliance/criminal-investigation/histor...
See for example the Canadian government freezing bank accounts[0] of anyone trying to contribute to the vaccine mandate protests.
Value ( and by extension price ) of anything is what people are willing to pay for it. Some digital cards in a Blizzard game were purchased for thousands of dollars. There is some digital real estate that was purchased for millions. We can argue all day long whether it makes sense and what the value should be, but that is the wrong perspective to begin with.
<< will never give dividends
Even now I can easily point to stocks that never paid dividends.
<< it's a pyramid scheme
At this point, it is a pyramid scheme the same way US dollar is a pyramid scheme.
It was purchased for millions AT THE TIME OF PEAK MANIA . big difference
Also it was purchased for millions by the only guy in the world willing to pay millions for it…
Don’t extrapolate or you risk making an hypothesis of liquidity and price permanence which is just not there
A mansion in Naples or San Mateo was worth millions in the 1980s, 90s , 00s , 10s , 20s and there are millions of potential buyers globally who’d happily pay that price. That’s an asset which proved both liquidity and price permanence (matter of fact appreciation) but still it’s not a given that it will prove to be such going forward
If there is one thing that 2008 should have taught anyone, it is that nothing is permanent. I am not going to get philosophical here and say that possessions are fleeting, but to pretend that real estate is not propped up hard and effectively is guaranteed to "prove to be such going forward" is about the same faith that keeps ANY asset including bitcoin up.
Why are you so certain that this timeline will never see Naples mansion price go to zero? I can easily see several scenarios where that could happen.
Yeah the dollar is a pyramid scheme. It has the same construction flaws as Bitcoin. You can withdraw it from the markets and just hoard it which causes deflation. The central bank then allows commercial banks to increase the money supply instead of increasing the circulation velocity. The problem with newly created money: it can be hoarded too, resulting in an infinite doom loop.
Niter will Tesla shares, yet people still buy. Its purely for resale at later stage.
To be fair, many of the big companies (at least Amazon, Meta, Twitter) have gotten front-page articles about their losses with people laying into them.
Why wouldn't BTC get the same treatment? OP must be a bag holder.
I think that mainly that is what drives the hate, just network effects. It's popular to hate because everyone's doing it.
But also, unfortunately cryptocurrency's reputation has largely been ruined by scammers. Because it's like any high technology, it multiplies the power of those who use it. Including the multitudes of low-lifes out there.
The biggest issue though is that people fundamentally do not understand what cryptocurrency is or that it has core advances in digital signatures and blockchains that make legacy trust-based financial systems obsolescent.
It also represents in some ways how technology has made all sorts of institutions and paradigms obsolete. Those who are profiting from these previous paradigms and/or are less cognitively adaptive subconsciously are threatened by these types of changes.
Nothing has been made obsolete, nothing about Bitcoin replaces any existing financial institution.
The fact that 99% of cryptocurrencies have no reason to exist including Bitcoin is visible in RAI. RAI is the Swiss franc of cryptocurrencies among hyperinflating nonsense.
What RAI represents is effectively a currency with an entirely computer controlled central bank just like Friedman dreamt of. Now that is possibly the greatest invention of this century. It is battle tested in one of the harshest environments. While every other currency(crypto or not) is dropping like flies, RAI is only dropping as fast as the Swiss franc which is hardly losing its value.
> It also represents in some ways how technology has made all sorts of institutions and paradigms obsolete. Those who are profiting from these previous paradigms and/or are less cognitively adaptive subconsciously are threatened by these types of changes.
I don't know what is going in your head but I could easily accuse you of the same. RAI represents how technology made the old paradigm of hypervolatile currencies obsolete. Bitcoin traders who were profiting from this paradigm or people who are unable to understand computer controlled monetary policy are theatened by these types of changes.
By the way, mining rewards are not a monetary policy because they don't take into account the supply and demand for Bitcoin, nor is there a way to get rid of excess Bitcoin.
e.g.
1. https://news.ycombinator.com/item?id=33357289 2. https://news.ycombinator.com/item?id=33379932
Anyways, a sharp decline in cryptocurrency markets caused by the continuing house-of-cards is almost certainly going to make front page HN.
I don't feel glee about this, I feel bad for many those who will lose money. But I'll follow it because it's the next chapter in an entertaining story.
And since bitcoin isn't a tech stock, but a "currency," why wouldn't you compare it to the S&P (down 19%), DJIA (down 10%), or the USD (up 17% against UKP, 15% against EUR)?
There exists a contingent of folks who experience psychological reactance at the thought of having to make decisions with respect to government oversight. They "[experience] motivation to regain a freedom after it has been lost or threatened – leads people to resist the social influence of others" when faced with the prospect of having to deal with the government. We all know people like this.
The same reaction exists when people feel they will be forced to make decisions with respect to crypto - a system they didn't and don't wish to participate in. No amount of reasoning is going to make someone amenable to government interference in the same way no one is going to be reasoned out of being currency-interfered with by those wish to establish a crypto-hegemony.
1. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4675534/
2. http://www.xenopraxis.net/readings/carstens_hyperstition.pdf
The negative externalities.
Are you sure about that? Really, think about it…
Said differently: the price of everything rises, not the value.
And another nitpick: by definition the average/median price rises, not the price of everything (afair).
Since bitcoin itself is a currency though, I'm not sure how inflation really applies across currencies (since there are "prices" both ways).
The value of bread as measured in money rises. I'm just using the terminology from the parent comment.
> And another nitpick: by definition the average/median price rises, not the price of everything (afair).
No, that's wrong. The value of money sinking is exactly the same as the price of everything rising. That is the meaning of "the value of money"; there is not even a theoretical distinction between these concepts. If the value of money falls in half, then all prices, of everything, have increased by 100%.
> Since bitcoin itself is a currency though, I'm not sure how inflation really applies across currencies (since there are "prices" both ways).
There seems to be some kind of conceptual confusion here. Currencies inflate (by losing value), or deflate (by gaining value), or don't (by maintaining the same value; in reality this can't happen).
If one currency inflates more than another one does, then the exchange rate between them will shift. (It will take more of the first currency to buy a constant amount of the second one, or less of the second one to buy a constant amount of the first one.) If two currencies inflate by the same amount, then the exchange rate between them won't shift. What's your question?
Is that really what you mean, and what you think my parent comment meant? Inflation is a mechanical thing; to get that effect, you'd need a financial instrument that was specifically defined to produce it.
Because it affects people. A lot of people needed graphics cards for not just gaming, but for 3d animation, video making, and video games during and after lockdown.
Ethereum was responsible for very large price increases and scarcity of graphics cards. The collapse of Ethereum eventually brought supply back to graphics cards-but we still have these inflated prices. Early in this recent crypto boom it was impossible to buy a mainstream card ($250-$400) while the top end cards were available because mining profitability on the mainstream ones was much higher.
This is before you consider that the high demand also attracted scalpers and the environmental issues.
Because to your point, it's completely voluntary to get involved, and if someone is pretending to care about all the (relatively few) grandmas who put money in, well, they're losing money so this person shouldn't be so happy about it.
And as for the energy externality, the vast majority of crypto hashpower has hook ups to power plants where during certain times of the day/year, there is excess power and nowhere to put it, so they sell it dirt cheap to miners. I know someone who worked for a US solar power provider that had such an arrangement. Sure, some people are mining from their college campus and stealing power to do so, but the cumulative real effect of this relatively low profit activity is dwarfed by the out of context numbers you see in articles.
So at the end of the day, it's just people playing zero sum status games, hoping they somehow benefit relative to the decline of others.
The news we constantly hear is "Hackernews 10/Dec/2022 Changpeng on brink of second bailout for cryptoexchanges."
It is like Bitcoin is supposed to send a hyperexaggerated message about our current money system and how unsustainable it is.
The answer is already obvious you have negative rates or not. The positive interest side of the loanable funds model is the side where new debt is taken on, the negative interest side of the loanable funds model is where debt is being paid off. We want to be on the negative side now because we have too much debt.
And now look at what's going on; big tech stocks crashed faster than crypto did. In a realistic economic environment, could these stocks be worth less than 'worthless' crypto? The effect is even more dramatic than I thought. It confirms my beliefs that the economy of the last decade was a kind of lucky lottery system.
It's all completely worthless, but some worthless things are worth far more than others depending on fickle social connections and sheer randomness... Then reinforced by first mover advantage and network effects.
This is because cryptocurrencies aren't even companies; they have no directors, no board members, no debt, no assets. It's impossible for them to go bankrupt.
Also, companies can become nonviable and be shut down. On the other hand, it's almost impossible for a crypto to become nonviable... There will always be some tinkerers willing to run nodes at a tiny annual loss. PoS cryptos are very cheap to operate.
I mean, FTT just went from $25 to something in the $2 range since the whole FTX thing blew up. And it will probably hit zero soon -- I have no idea why anyone still wants it.
You have no idea.
Well, it'd likely be worse than bankruptcy, because there wouldn't be any assets to go after in court.
Stock investors tend think more like "This stock just dropped 80%, I have to cut my losses. Bye."
- Amazon Becomes the First Company Ever to Lose $1T in Stock Value
I'll let it speak for itself.
Because many became rich riding the first crypto wave. And they missed out. It strikes them as an injustice and as some consolation, they would like to see crypto crash burn.
If I can't have, neither should they.
Do you normally charge rent to remember concepts you find ridiculous, evil or toxic? How much rent do you charge, say, "scientology" or "child abuse" for the mental real estate they are squatting on in your head?
> To the oblivious observer it would appear cryptocurrency lives rent free in many heads in this space. If you don't care for it why pay attention to it?
The environmental impact is something everyone should care about
Sorry, I must have missed all of the following posts:
- AMZN under $100 (Down 48% YOY) - GOOG under $100 (Down 42% YOY) - AMD under $60 (Down 59% YOY) - META at $101 (Down 77% YOY)
and the list goes on.
What is it about bitcoin that brings people into these threads to say "good riddance! I hope it dies because all of it's negative externalities."?
To the oblivious observer it would appear cryptocurrency lives rent free in many heads in this space. If you don't care for it why pay attention to it?
I am not a fan of BlackRock. The last thing I could imagine spending my time doing would be checking BLK on the NYSE to gleefully dance on its grave when it misses its earnings, and then hopping into my echo chamber to share the news with anonymous strangers.