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I just sold one of my hairs to myself for $10. Is my head now worth a million? With Apple, there's intrinsic value to consider. And frankly, if you sold enough

by street 10y ago

I just sold one of my hairs to myself for $10. Is my head now worth a million? With Apple, there's intrinsic value to consider. And frankly, if you sold enough Apple stock for it to go down 50%, I'd personally start buying. I doubt that's the case for ETH, where there's only early adopters buying it hoping to strike it rich.

drcode 10y ago
So you're saying the intrinsic value is certain to be lower than it's current market value? I have good news for you: You can become rich by simply shorting ether on Kraken and Poloniex!
- c2315261 10y ago
  You're completly disregarding that timing is far more important than simply knowing that there will be a downward correction. The shorting fees will end up being consuming a large chunk of the profit even though you sold a hundred thousand ether coins at $11 and bought them back at $1.
  - drcode 10y ago
    That is a valid point.
  - aianus 10y ago
    > The shorting fees Costs about 16% APR to borrow ETH for shorting on Bitfinex right now. So if you're expecting a >=90% crash in the next ~5 years you'd still make a profit.
- street 10y ago
  The cryptocurrency holders can probably stay irrational for longer than I can stay solvent. I'll sit on the sidelines and watch.
- desdiv 10y ago
  Plenty of people shorted Bitcoin on Bitcoinica, but they didn't lose their money when BTC went up. They lost their money when Bitcoinica went down.
benjaminmbrown 10y ago
It actually did go down 50% from $15ish to $6ish and recovered. Early adopters trying to get rich = all early stage investing so what's your point?
- street 10y ago
  That's because of the tiny liquidity. Nowhere near $120 million was sold, and it still lost 50%. Now try selling tens of millions worth, and see what happens.
  - dmix 10y ago
    Market incentives exist for it not to crash. People who put money into ETH/DAO and who want to see growth have strong incentives against this type of bank run. So I don't really see your point by comparing it to Apple as it's not the same at all. It's not equivalent to cash or public stocks but that doesn't mean it's not a worthy investment to make for someone interested in the technology or potential in Ethereum. What the currency needs is something of tangible value underpinning it and this project seems like a good way to add real value to back up the currency. It could potentially result in some successful businesses and projects which would compensate early adopters at a higher level both in the value of ETH and in dividends. But I don't believe there is any doubt that this is speculative. I visited /r/ethereum the other day and someone asked why they backed DAO and a common reply was "I wanted to support this new technology as much as seeing it as a possible investment opportunity for financial return". It's high-risk speculative investments but also a group of people who are interested in the idea itself and are willing to invest money at a potential loss in the process. Just like any startup founder.
    - street 10y ago
      > Market incentives exist for it not to crash. People who put money into ETH/DAO and who want to see growth have strong incentives against this type of bank run. That's where the pyramid/ponzi/bubble comparison comes in. There's no actual value (yet?); the adopters would have to keep buying more to keep the price up and to keep the "value" of their holdings high. Not because it's so useful; just financial incentives.
Riseed 10y ago
Looks like the #HairTokens announcement will be made soon. https://twitter.com/TheDAONews/status/732303373093900288 https://twitter.com/TheDAONews/status/732303373093900288

by street 10y ago

drcode 10y ago

So you're saying the intrinsic value is certain to be lower than it's current market value? I have good news for you: You can become rich by simply shorting ether on Kraken and Poloniex!

c2315261 10y ago
You're completly disregarding that timing is far more important than simply knowing that there will be a downward correction. The shorting fees will end up being consuming a large chunk of the profit even though you sold a hundred thousand ether coins at $11 and bought them back at $1.
- drcode 10y ago
  That is a valid point.
- aianus 10y ago
  > The shorting fees Costs about 16% APR to borrow ETH for shorting on Bitfinex right now. So if you're expecting a >=90% crash in the next ~5 years you'd still make a profit.
street 10y ago
The cryptocurrency holders can probably stay irrational for longer than I can stay solvent. I'll sit on the sidelines and watch.
desdiv 10y ago
Plenty of people shorted Bitcoin on Bitcoinica, but they didn't lose their money when BTC went up. They lost their money when Bitcoinica went down.

benjaminmbrown 10y ago

It actually did go down 50% from $15ish to $6ish and recovered. Early adopters trying to get rich = all early stage investing so what's your point?

street 10y ago
That's because of the tiny liquidity. Nowhere near $120 million was sold, and it still lost 50%. Now try selling tens of millions worth, and see what happens.
- dmix 10y ago
  Market incentives exist for it not to crash. People who put money into ETH/DAO and who want to see growth have strong incentives against this type of bank run. So I don't really see your point by comparing it to Apple as it's not the same at all. It's not equivalent to cash or public stocks but that doesn't mean it's not a worthy investment to make for someone interested in the technology or potential in Ethereum. What the currency needs is something of tangible value underpinning it and this project seems like a good way to add real value to back up the currency. It could potentially result in some successful businesses and projects which would compensate early adopters at a higher level both in the value of ETH and in dividends. But I don't believe there is any doubt that this is speculative. I visited /r/ethereum the other day and someone asked why they backed DAO and a common reply was "I wanted to support this new technology as much as seeing it as a possible investment opportunity for financial return". It's high-risk speculative investments but also a group of people who are interested in the idea itself and are willing to invest money at a potential loss in the process. Just like any startup founder.
  - street 10y ago
    > Market incentives exist for it not to crash. People who put money into ETH/DAO and who want to see growth have strong incentives against this type of bank run. That's where the pyramid/ponzi/bubble comparison comes in. There's no actual value (yet?); the adopters would have to keep buying more to keep the price up and to keep the "value" of their holdings high. Not because it's so useful; just financial incentives.

Riseed 10y ago

Looks like the #HairTokens announcement will be made soon. https://twitter.com/TheDAONews/status/732303373093900288 https://twitter.com/TheDAONews/status/732303373093900288