9 ms·

It is hilarious watching people try to reinvent financial institutions without any knowledge of or respect for history.

mikeschmatz 9y ago
If nothing else blockchain creates tons of entertainment value. Something completely crazy seems to go down every day. It is like a reality show on a criminal channel
deleted 9y ago
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devrandomguy 9y ago
They are just exploring the solution space, with minimal baggage to hold them back. The real problem, is that people are trying to make a living off of something that is still experimental / alpha level maturity. Seems like the people who do understand banking history are unwilling or unable to make any kind of improvements, at least in regards to the issues that digital currencies are working to address.
- NelsonMinar 9y ago
  Sure, but their youthful experiments are involving billions of dollars worth of money. Or at least they claim it does.
  - devrandomguy 9y ago
    And why is so much money getting dumped into these constructs? AFAIK, it is speculators that are inflating that economy, not the coin devs hyping it as an investment. If it's any consolation, money doesn't disappear, it just becomes someone else's. It's still in the economy. Think of it as an overpriced research project, that the media went nuts over.
    - supermdguy 9y ago
      But if it works...
    - bduerst 9y ago
      If you swap out "the coin devs" for "Ty Inc.", then your comment would be relevant about Beanie Babies.
  - mikeschmatz 9y ago
    Not sure if there are billions of dollars involved. For all we know, it could be just speculators trading crypto between each other. I could not find any stats on the amount of fiat flowing in and out of these "exchanges", which, by the way, have zero oversight and tend to disappear every few months or so.
Twisell 9y ago
Maybe I'm too "left wing", but if you ask me short selling, complex products and high frequency trading are among technological "improvements" that have led actual stock exchange to an ugly mess where biggest profits are made by "scamming" efficiently other users. Should regulators forbid (or tax more) some (or all) of this mechanisms markets will quickly resume to what they should be, places for people to invest money on companies that produce value. So yeah pretty impressive to see that currencies based on unicorn blockchains of the future jump right into the old bandwagon of making up complex financial instruments that few people really understand on top of an experimental core concept.
- gnaritas 9y ago
  I'd say you don't really understand what you're critiquing; you think those things are bad because you heard they were, from someone else who likely doesn't understand it either. There's absolutely nothing wrong with short selling or high frequency trading. Short sellers help keep prices fair and companies honest, HFT makes trading cheaper for everyone. The markets are worse without them, the market was worse before HFT which is the only thing new here, trades used to cost way more due to wall street middle men taking a big cut of every trade, far far bigger than HFT's take now. The only people who have a logically valid reason to hate HFT are the old school manual traders who were displaced by them and can no long make a living trading chart patterns. As late as the 70's and 80's there were people getting rich with strategies as stupid simple as buy the 10 day high and sell the 10 day low. Those people hate HFT, it took away their cash cow. HFT is a sign of a healthy free market, better traders came in and offered to take your trades for far less money than the manual traders could, and took over; that's healthy competition, and they competed with each other driving the prices lower and lower until they hit the penny. Now they all fight over that penny to see who can be fastest because congress won't let them compete on price anymore (the sub penny rule) so they compete on speed instead.
  - tnone 9y ago
    Healthy competition optimizes for value, HFT is just optimizing for profit. These are not the same. It's paperclip maximizing, using an economic Maxwell's demon.
adjkant 9y ago
It makes perfect ironical sense too, we should have seen this coming. Developers are some of the best armchair economists, or like to think they are. Add in the libertarian political strain with some VC/startup evaluations and you've got what we have now: an inflated decentralized currency with a market run by a centralized tech company with infighting of developers (miners) over very shaky economics who have formed into political factions over technical decisions to make even worse economic decisions, all while the people who know whats going on profit massively.
- thanatropism 9y ago
  ... and this is why I didn't get on the Bitcoin train when I was first fascinated by it in 2009. Too much RonPaulnomics in the community, a refusal to discuss Gresham's law and an unwavering optimism in that transaction costs melt away magically. Then, me and my intellectualism lost big to the australopitheconomists-with-crypto.

If nothing else blockchain creates tons of entertainment value. Something completely crazy seems to go down every day. It is like a reality show on a criminal channel

deleted 9y ago

[deleted]

devrandomguy 9y ago

They are just exploring the solution space, with minimal baggage to hold them back. The real problem, is that people are trying to make a living off of something that is still experimental / alpha level maturity. Seems like the people who do understand banking history are unwilling or unable to make any kind of improvements, at least in regards to the issues that digital currencies are working to address.

NelsonMinar 9y ago
Sure, but their youthful experiments are involving billions of dollars worth of money. Or at least they claim it does.
- devrandomguy 9y ago
  And why is so much money getting dumped into these constructs? AFAIK, it is speculators that are inflating that economy, not the coin devs hyping it as an investment. If it's any consolation, money doesn't disappear, it just becomes someone else's. It's still in the economy. Think of it as an overpriced research project, that the media went nuts over.
  - supermdguy 9y ago
    But if it works...
  - bduerst 9y ago
    If you swap out "the coin devs" for "Ty Inc.", then your comment would be relevant about Beanie Babies.
- mikeschmatz 9y ago
  Not sure if there are billions of dollars involved. For all we know, it could be just speculators trading crypto between each other. I could not find any stats on the amount of fiat flowing in and out of these "exchanges", which, by the way, have zero oversight and tend to disappear every few months or so.

Twisell 9y ago

Maybe I'm too "left wing", but if you ask me short selling, complex products and high frequency trading are among technological "improvements" that have led actual stock exchange to an ugly mess where biggest profits are made by "scamming" efficiently other users. Should regulators forbid (or tax more) some (or all) of this mechanisms markets will quickly resume to what they should be, places for people to invest money on companies that produce value. So yeah pretty impressive to see that currencies based on unicorn blockchains of the future jump right into the old bandwagon of making up complex financial instruments that few people really understand on top of an experimental core concept.

gnaritas 9y ago
I'd say you don't really understand what you're critiquing; you think those things are bad because you heard they were, from someone else who likely doesn't understand it either. There's absolutely nothing wrong with short selling or high frequency trading. Short sellers help keep prices fair and companies honest, HFT makes trading cheaper for everyone. The markets are worse without them, the market was worse before HFT which is the only thing new here, trades used to cost way more due to wall street middle men taking a big cut of every trade, far far bigger than HFT's take now. The only people who have a logically valid reason to hate HFT are the old school manual traders who were displaced by them and can no long make a living trading chart patterns. As late as the 70's and 80's there were people getting rich with strategies as stupid simple as buy the 10 day high and sell the 10 day low. Those people hate HFT, it took away their cash cow. HFT is a sign of a healthy free market, better traders came in and offered to take your trades for far less money than the manual traders could, and took over; that's healthy competition, and they competed with each other driving the prices lower and lower until they hit the penny. Now they all fight over that penny to see who can be fastest because congress won't let them compete on price anymore (the sub penny rule) so they compete on speed instead.
- tnone 9y ago
  Healthy competition optimizes for value, HFT is just optimizing for profit. These are not the same. It's paperclip maximizing, using an economic Maxwell's demon.

adjkant 9y ago

It makes perfect ironical sense too, we should have seen this coming. Developers are some of the best armchair economists, or like to think they are. Add in the libertarian political strain with some VC/startup evaluations and you've got what we have now: an inflated decentralized currency with a market run by a centralized tech company with infighting of developers (miners) over very shaky economics who have formed into political factions over technical decisions to make even worse economic decisions, all while the people who know whats going on profit massively.

thanatropism 9y ago
... and this is why I didn't get on the Bitcoin train when I was first fascinated by it in 2009. Too much RonPaulnomics in the community, a refusal to discuss Gresham's law and an unwavering optimism in that transaction costs melt away magically. Then, me and my intellectualism lost big to the australopitheconomists-with-crypto.