3 ms·

Our friend Occam suggests: nope, people are just stupid.

bsaul 9y ago
stupidity doesn't explain it all, because people are also naturally reluctant to give their own money. Either they are stupid and abused , in such a large number that you can witness million dollars ICO every week (which means a really large scam is actually being organized), or there's another fact we're not aware of.
- vasilipupkin 9y ago
  it's an option. An out of the money option. It may expire worthless, or it could be worth a lot. It's not irrational to buy into it.
  - bsaul 9y ago
    as opposed to regular shares that will at least bring dividends every year ? The only person i know that trades crypto currencies do it with pocket money. But the sums we're talking about here are about something a bit different (i suppose).
    - vasilipupkin 9y ago
      well, people buy out of the money options on all sorts of stuff, like oil and other things. It;s a bet that has small limited downside and large upside, so not completely nonsensical. I invested in filecoin. I figured, hell, if I lose 1-2k no big deal, but if this thing takes off, I could make a lot more
- femto113 9y ago
  That "other fact" would be greed. "Many individuals grew suddenly rich. A golden bait hung temptingly out before the people, and, one after the other, they rushed to the tulip marts, like flies around a honey-pot. Every one imagined that the passion for tulips would last for ever, and that the wealthy from every part of the world would send to Holland, and pay whatever prices were asked for them. The riches of Europe would be concentrated on the shores of the Zuyder Zee, and poverty banished from the favoured clime of Holland. Nobles, citizens, farmers, mechanics, seamen, footmen, maidservants, even chimney sweeps and old clotheswomen, dabbled in tulips." [1] https://en.wikipedia.org/wiki/Tulip_mania#Mackay.27s_Madness_of_Crowds https://en.wikipedia.org/wiki/Tulip_mania#Mackay.27s_Madness...
  - silotis 9y ago
    A rather important bit from the Wikipedia page to keep in mind when reading that quote: "His account was largely sourced from a 1797 work by Johann Beckmann titled A History of Inventions, Discoveries, and Origins.[11] In fact, Beckmann's account, and thus Mackay's by derivation, was primarily sourced to three anonymous pamphlets published in 1637 with an anti-speculative agenda.[36] Mackay's vivid book was popular among generations of economists and stock market participants. His popular but flawed description of tulip mania as a speculative bubble remains prominent, even though since the 1980s economists have debunked many aspects of his account." Also see the "Modern views" section. Basically, as far as anyone can tell Mackay's account of tulip mania is mostly bullshit.
    - femto113 9y ago
      I picked that phrase for its narrative effect, not its literal truth, but if you need more authoritatively documented example of mass stupidity and greed leading to a speculative bubble we don't have to look back 400 years... https://qz.com/114753/meet-the-family-who-lost-100000-when-the-beanie-baby-bubble-burst/ https://qz.com/114753/meet-the-family-who-lost-100000-when-t...

stupidity doesn't explain it all, because people are also naturally reluctant to give their own money. Either they are stupid and abused , in such a large number that you can witness million dollars ICO every week (which means a really large scam is actually being organized), or there's another fact we're not aware of.

vasilipupkin 9y ago
it's an option. An out of the money option. It may expire worthless, or it could be worth a lot. It's not irrational to buy into it.
- bsaul 9y ago
  as opposed to regular shares that will at least bring dividends every year ? The only person i know that trades crypto currencies do it with pocket money. But the sums we're talking about here are about something a bit different (i suppose).
  - vasilipupkin 9y ago
    well, people buy out of the money options on all sorts of stuff, like oil and other things. It;s a bet that has small limited downside and large upside, so not completely nonsensical. I invested in filecoin. I figured, hell, if I lose 1-2k no big deal, but if this thing takes off, I could make a lot more
femto113 9y ago
That "other fact" would be greed. "Many individuals grew suddenly rich. A golden bait hung temptingly out before the people, and, one after the other, they rushed to the tulip marts, like flies around a honey-pot. Every one imagined that the passion for tulips would last for ever, and that the wealthy from every part of the world would send to Holland, and pay whatever prices were asked for them. The riches of Europe would be concentrated on the shores of the Zuyder Zee, and poverty banished from the favoured clime of Holland. Nobles, citizens, farmers, mechanics, seamen, footmen, maidservants, even chimney sweeps and old clotheswomen, dabbled in tulips." [1] https://en.wikipedia.org/wiki/Tulip_mania#Mackay.27s_Madness_of_Crowds https://en.wikipedia.org/wiki/Tulip_mania#Mackay.27s_Madness...
- silotis 9y ago
  A rather important bit from the Wikipedia page to keep in mind when reading that quote: "His account was largely sourced from a 1797 work by Johann Beckmann titled A History of Inventions, Discoveries, and Origins.[11] In fact, Beckmann's account, and thus Mackay's by derivation, was primarily sourced to three anonymous pamphlets published in 1637 with an anti-speculative agenda.[36] Mackay's vivid book was popular among generations of economists and stock market participants. His popular but flawed description of tulip mania as a speculative bubble remains prominent, even though since the 1980s economists have debunked many aspects of his account." Also see the "Modern views" section. Basically, as far as anyone can tell Mackay's account of tulip mania is mostly bullshit.
  - femto113 9y ago
    I picked that phrase for its narrative effect, not its literal truth, but if you need more authoritatively documented example of mass stupidity and greed leading to a speculative bubble we don't have to look back 400 years... https://qz.com/114753/meet-the-family-who-lost-100000-when-the-beanie-baby-bubble-burst/ https://qz.com/114753/meet-the-family-who-lost-100000-when-t...