9 ms·

Farewell from the Pineapple Fund

300 points by ca98am79 8y ago

bmpafa 8y ago
I never felt like this story got enough coverage. This modern day Chuck Feeney[1] demonstrates the precise sort of selfless generosity we need more of, but most of my news feeds are busy baiting me with the latest bit of gossip. I don't have solutions I guess, just grumbling. But thinking about that makes this historical act of kindness a little bittersweet. [1]: https://en.wikipedia.org/wiki/Chuck_Feeney https://en.wikipedia.org/wiki/Chuck_Feeney
lavezzi 8y ago
Really enjoyed seeing this take place from start to finish. What a fantastic example of modern day altruism.
loceng 8y ago
Edit to add at top: I fudged my numbers relating to benefit that charitable donations will have on taxes, I will research proper numbers and update them if I ever get around to publishing something more official - and yeah, I look like an idiot because instead of properly researching my distaste rushed a reply. I believe the concepts I otherwise write about are valid. Someone posted this comment on Reddit: "Thank you for doing what so many wish they would do in your position but yet fail to when they get there. Really proud of you and appreciative of your generosity." - https://www.reddit.com/r/Bitcoin/comments/8ieffr/farewell_from_the_pineapple_fund/dyr24cu/?st=jh0o55e6&sh=af117be2 https://www.reddit.com/r/Bitcoin/comments/8ieffr/farewell_fr... And I pasted my reply below - I'd appreciate conversation to get into the depths of others understanding if you have contrary thoughts to mine, and so if you believe my thinking is wrong then I can further refine my understanding and nuances: There's likely no generosity here. All of the donations were likely related to countering capital gains taxes. Depending on where this person lives, let's say their capital gains taxes are 40%: for them to owe $55,000,000 they would have sold and removed roughly $140,000,000 from the ecosystem; How a qualified appraiser reasonably determines "fair market value" in something as volatile at incentivized crypto-assets - I don't know - it's probably going to end up gouging society via taxes as well. Likewise, they potentially did absolutely nothing except do mining early on (or make a good bet) and promote Bitcoin et al, getting more people to adopt/buy them - allowing them to then sell with where we're at in the scheme. These incentivized crypto-assets are also a Ponzi-Pyramid structure, where like in a traditional Ponzi scheme it's usually the early adopters who gain more and the later adopters who lose more; technically with a single stock broker making the decisions, they would get to decide exactly who profits from the investment, and who's money they run or exit with. It is possible they donated more than they required to counter taxes, however I doubt they'd verify that with independently selected third-parties - and it'd be naive to merely take their word for it. It's also other people's future money being donated - and those people are now bearing the unrealized cost, until they sell at least; not such a big deal for the receiving party of a donation, however it's a problem if they were actually purchased. And now unfortunately these charities have become aligned and vested in these crypto-asset donations maintaining their current value, or promoting them so they go up even for (for no actual work being done) - trying to get later adopters to buy in a higher perceived value; if actual work was being done that was worthwhile to pay for, people could pay in a non-incentivized crypto-asset, if the immutable blockchain ledger is a primary value. It's only reached such proportions because in part of its global nature, and because there isn't a single stock broker - it's an situation that's been forced on regulators around the world, and who are being influenced by lobbyists to attempt to indoctrinate regulators based on their biased understanding. It's a global pyramid of cards stacked waiting to tumble, the people making the money are the earlier adopters, and those [platforms] selling the shovels/services for this new "gold" rush. Those who think society is oblivious to the Ponzi-Pyramid structures are going to find disappointment. The positive rallying for Bitcoin et al is because you're all aligned, incentivized to want them to work out - and that sentiment isn't equally countered solely because people keeping the system in check aren't at minimum disproportionately incentivized (e.g. they may have a government job with a salary that pays fiat currency as their incentive to do the work), nor are there the masses - the "HODL" rallying of both when a crypto-asset value is at a high and a low is interesting, to say the least: https://hackernoon.com/analyzing-every-reddit-comment-mentioning-hodl-since-2017-part-one-d536eb8364ad https://hackernoon.com/analyzing-every-reddit-comment-mentio... It is great - yes - that there is at least one person who perhaps did indeed invest the majority (50%+1?; if they're telling the truth) of their crypto-assets to charities who could realize the value now (and I like a lot of those charities), or the charities may hold onto them until they crash in value. Or they will slowly sell them off as a trickle to not upset the ecosystem [as the ecosystem has seemed to have learned to manage for now] - meanwhile the remainder of the community, likely individuals with the smaller amounts invested, are doing the HODL rallying game keeping the perceived value artificially higher - meanwhile earlier adopters are extracting money at a rate that new money is coming into the system (based on the confidence the stabilized price - maintained by the HODLing - allows for). Now what about the unknown list of bad actors who have already entered the system, who are perhaps planning to put more money into it to keep it perpetuated, and will attempt at any means to cause more-to-all of society to adopt it so the artificially perceived value - and wealth/buying power - is unreasonably and unnecessarily reallocated weighted towards them, the earlier adopters? I would recommend everyone think through the long-term negative consequences, they aren't outweighed by the potential positives - and those positives are all achievable by non-Ponzi-Pyramid scheme incentivized means. The long-term in discussions, particularly the negatives, is rarely brought up - I imagine heavily to avoid flame wars, or you simply get "downvoted to hell" by those, as I mentioned above, incentivized to rally for their gains. It's interesting too that they didn't liquidate the $55MM (or their full amount into fiat currency), and then donate that to charities. Aside from the negative impact dumping that quickly could have on its perceived value - like we've seen before, it's apparently better for tax reasons too to donate a crypto-asset; I imagine now that larger financial institutions are involved and other well-organized organizations have created a legitimate market structure, perhaps like Coinbase, are keeping large sums of capital at bay from investors wanting to buy a lot -- so they can buy up large quantities when necessary to avoid exposing volatility. If you think the layman person investing say as little as $100 (that little or less for them to be aligned with the masses of the ecosystem, to be part of the mob) is educated enough to make a sound investment decision, to understand this complex holistic ecosystem, well you're wrong and if you profit off of selling your incentivized crypto-asset you're taking advantage of people. This is why stock markets were formed with regulations and oversights and due diligence for individual companies, etc. Perhaps you reading this don't fully understand it either, or didn't, and it's long-term implications. So are you going to pretend it's not a Ponzi-Pyramid scheme and hope it works out, and that society isn't actually being taken advantage of? I hope more of you sooner than later realize this. Some people do know this is the game they're playing, and they're happy to take advantage of others - however it's immoral to do if they don't know they're playing that game. The simple truth is the proposed benefits of the structures allowed with incentivized crypto-assets don't work out long-term if you can't separate the two systems. If the system inherently has a Ponzi-Pyramid structure - you can't simply dismiss that, and you can't - as a society - allow it; the two systems being a model that leads to "incentivized collaboration" leading to independently owned services tied together through a transaction layer (that logically doesn't make sense to have an incentivized structure), and that of Ponzi-Pyramid schemes.
- iopuy 8y ago
  Even if donations were meant to offset capital gains it is still a generous act. I think it is impossible to make the statement "There's likely no generosity here" without knowing more information.
  - loceng 8y ago
    No, it's not. That money goes to the government and society as a whole otherwise, which you would owe - and if you didn't pay you'd eventually end up in jail. Paying your taxes to not end up in jail isn't generosity. Paying taxes is being part of a system that you've benefit from. If you gave more money to charity than is owed in taxes - and that was yours that you reasonably and fairly earned - then you could argue there's generosity involved. You're correct in saying that without more confirmed information, we can't know how much or if any generosity occurred. I did however say "likely no generosity" - which is different from saying a firm statement of "no generosity here" - so my statement isn't impossible.
    - jonknee 8y ago
      Someone struck the lottery and donated a ton to worthy causes. That is generous, full stop. If the government was concerned about this they wouldn't allow charitable donations to be deducted. And since you seem so concerned, you can't donate your way out of paying taxes because your total charitable deduction can’t exceed 50% of your adjusted gross income.
    - icebraining 8y ago
      Even if charity donations worked like that, they would still have donated their time and effort in selecting worthwhile charities and dealing with all the bookkeeping.
- gfodor 8y ago
  The "rich people donate money to avoid paying taxes" meme has always been odd to me. If you donate $1, yes, your tax bill is lower, but you are also out $1. Unless you are corrupt and are funneling money to your own foundation or something, donating money is not a way to beat the system wrt taxes, its just a way to shift money that otherwise would have gone to the government to charitable entities instead. Also, it results in more loss of wealth for the donator: if I owe the government $1 in taxes, I can choose to pay the government that $1 or, if I loathe the idea of the government getting that $1 and I can afford it, I can choose to give ~$3 to a charity instead. The fact that rich people choose to donate to charity at a rate of about 3:1 instead of paying the government says a lot about their faith in the government in spending their money wisely.
pastor_bob 8y ago
It's amazing what a positive impact bitcoin and crypto has had on the world. And it only has just begun. I feel like we're standing on the precipice of a truly new, better age. Once the dinosaurs like Bill Gates of Micro$oft move on who knows what we'll see.
- elil17 8y ago
  This is a story about a generous person - crypto currencies themselves are little more than Ponzi schemes
- deadmetheny 8y ago
  You could replace Bitcoin with lottery winnings and get the same takeaway. I'm glad that someone who decided to gamble on Internet Fun Bucks has decided to do something worthwhile with their windfall, but nothing here is inherently tied to crypto. Bitcoin has done nothing but waste energy and computational resources in order to reallocate money between nerds and the unfortunate normies that've been duped into thinking it'll make them rich quickly. That's not something we should be celebrating.
  - burger_moon 8y ago
    >Bitcoin has done nothing but waste energy and computational resources in order to reallocate money between nerds and the unfortunate normies that've been duped into thinking it'll make them rich quickly. That's not something we should be celebrating. This thread is about a fund that was created because of bitcoin earnings. So I'm sorry but your rude and tasteless comment does not hold water.
    - deadmetheny 8y ago
      Where the money came from is irrelevant. And wasting energy and computer equipment to create play money for idiots who want to ignore why decades of banking regulation have been implemented is way more "rude and tasteless" than mean words on the Internet. The fact that a small amount of money being shuffled around went to a good cause is nice but doesn't offset the truly exquisite amount of waste the entire crypto ecosystem generates.
sibeliuss 8y ago
Thank you so much!
tlb 8y ago
Thanks, Pineapple person / people. The benefit to society from donating to charity can range from positive, to zero, to negative. Often negative. Anyone with money can donate, but it takes a lot of work to donate to things that make the world better. The Pineapple fund seems to have put in the effort to donate to projects with high positive impact, in a way that does the most good. (It's possible to donate to good projects in bad ways, such as by requiring them to use the money to build a building with your name on it.) Doing the work can be exasperating, because you think "I'm giving away money, and I have to do all this work too???" But it's the work that makes the difference.
- jdamon96 8y ago
  Can you explain to me why you believe the benefit to society from donating to charity is often negative?
  - newnewpdro 8y ago
    I can't speak for the parent, but I've personally known people with parents who ran charities and political campaigns for the sole purpose of collecting donations and spending 100% of the donations on "operations"; paying their salary while they do nothing other than the occasional fundraising as the well dries up.
  - tomc1985 8y ago
    A lot of attempts at charity have backfired, often due to cultural differences between the benefactor and those on the receiving end, or a lack of oversight or poorly-thought-out plans. See: PlayPump [1], UNICEF's Cluster-bomb-colored food drops [2], etc [1] http://blogs.ei.columbia.edu/2010/07/01/the-playpump-what-went-wrong/ http://blogs.ei.columbia.edu/2010/07/01/the-playpump-what-we... [2] https://www.upi.com/Defense-News/2003/04/02/UNICEF-Rations-bomblets-same-color/87821049335611/ https://www.upi.com/Defense-News/2003/04/02/UNICEF-Rations-b...
  - nur0n 8y ago
    Also see: https://simple.wikipedia.org/wiki/Unintended_consequences https://simple.wikipedia.org/wiki/Unintended_consequences, specifically the Indian cobras. Even with good intentions, predicting outcomes is difficult. When you donate to a charity(or any organization), you are giving them more influence while delegating decision making. The best option seems to be: find something you really care about and get your hands dirty.

300 points by ca98am79 8y ago

I never felt like this story got enough coverage. This modern day Chuck Feeney[1] demonstrates the precise sort of selfless generosity we need more of, but most of my news feeds are busy baiting me with the latest bit of gossip. I don't have solutions I guess, just grumbling. But thinking about that makes this historical act of kindness a little bittersweet. [1]: https://en.wikipedia.org/wiki/Chuck_Feeney https://en.wikipedia.org/wiki/Chuck_Feeney

lavezzi 8y ago

Really enjoyed seeing this take place from start to finish. What a fantastic example of modern day altruism.

loceng 8y ago

Edit to add at top: I fudged my numbers relating to benefit that charitable donations will have on taxes, I will research proper numbers and update them if I ever get around to publishing something more official - and yeah, I look like an idiot because instead of properly researching my distaste rushed a reply. I believe the concepts I otherwise write about are valid. Someone posted this comment on Reddit: "Thank you for doing what so many wish they would do in your position but yet fail to when they get there. Really proud of you and appreciative of your generosity." - https://www.reddit.com/r/Bitcoin/comments/8ieffr/farewell_from_the_pineapple_fund/dyr24cu/?st=jh0o55e6&sh=af117be2 https://www.reddit.com/r/Bitcoin/comments/8ieffr/farewell_fr... And I pasted my reply below - I'd appreciate conversation to get into the depths of others understanding if you have contrary thoughts to mine, and so if you believe my thinking is wrong then I can further refine my understanding and nuances: There's likely no generosity here. All of the donations were likely related to countering capital gains taxes. Depending on where this person lives, let's say their capital gains taxes are 40%: for them to owe $55,000,000 they would have sold and removed roughly $140,000,000 from the ecosystem; How a qualified appraiser reasonably determines "fair market value" in something as volatile at incentivized crypto-assets - I don't know - it's probably going to end up gouging society via taxes as well. Likewise, they potentially did absolutely nothing except do mining early on (or make a good bet) and promote Bitcoin et al, getting more people to adopt/buy them - allowing them to then sell with where we're at in the scheme. These incentivized crypto-assets are also a Ponzi-Pyramid structure, where like in a traditional Ponzi scheme it's usually the early adopters who gain more and the later adopters who lose more; technically with a single stock broker making the decisions, they would get to decide exactly who profits from the investment, and who's money they run or exit with. It is possible they donated more than they required to counter taxes, however I doubt they'd verify that with independently selected third-parties - and it'd be naive to merely take their word for it. It's also other people's future money being donated - and those people are now bearing the unrealized cost, until they sell at least; not such a big deal for the receiving party of a donation, however it's a problem if they were actually purchased. And now unfortunately these charities have become aligned and vested in these crypto-asset donations maintaining their current value, or promoting them so they go up even for (for no actual work being done) - trying to get later adopters to buy in a higher perceived value; if actual work was being done that was worthwhile to pay for, people could pay in a non-incentivized crypto-asset, if the immutable blockchain ledger is a primary value. It's only reached such proportions because in part of its global nature, and because there isn't a single stock broker - it's an situation that's been forced on regulators around the world, and who are being influenced by lobbyists to attempt to indoctrinate regulators based on their biased understanding. It's a global pyramid of cards stacked waiting to tumble, the people making the money are the earlier adopters, and those [platforms] selling the shovels/services for this new "gold" rush. Those who think society is oblivious to the Ponzi-Pyramid structures are going to find disappointment. The positive rallying for Bitcoin et al is because you're all aligned, incentivized to want them to work out - and that sentiment isn't equally countered solely because people keeping the system in check aren't at minimum disproportionately incentivized (e.g. they may have a government job with a salary that pays fiat currency as their incentive to do the work), nor are there the masses - the "HODL" rallying of both when a crypto-asset value is at a high and a low is interesting, to say the least: https://hackernoon.com/analyzing-every-reddit-comment-mentioning-hodl-since-2017-part-one-d536eb8364ad https://hackernoon.com/analyzing-every-reddit-comment-mentio... It is great - yes - that there is at least one person who perhaps did indeed invest the majority (50%+1?; if they're telling the truth) of their crypto-assets to charities who could realize the value now (and I like a lot of those charities), or the charities may hold onto them until they crash in value. Or they will slowly sell them off as a trickle to not upset the ecosystem [as the ecosystem has seemed to have learned to manage for now] - meanwhile the remainder of the community, likely individuals with the smaller amounts invested, are doing the HODL rallying game keeping the perceived value artificially higher - meanwhile earlier adopters are extracting money at a rate that new money is coming into the system (based on the confidence the stabilized price - maintained by the HODLing - allows for). Now what about the unknown list of bad actors who have already entered the system, who are perhaps planning to put more money into it to keep it perpetuated, and will attempt at any means to cause more-to-all of society to adopt it so the artificially perceived value - and wealth/buying power - is unreasonably and unnecessarily reallocated weighted towards them, the earlier adopters? I would recommend everyone think through the long-term negative consequences, they aren't outweighed by the potential positives - and those positives are all achievable by non-Ponzi-Pyramid scheme incentivized means. The long-term in discussions, particularly the negatives, is rarely brought up - I imagine heavily to avoid flame wars, or you simply get "downvoted to hell" by those, as I mentioned above, incentivized to rally for their gains. It's interesting too that they didn't liquidate the $55MM (or their full amount into fiat currency), and then donate that to charities. Aside from the negative impact dumping that quickly could have on its perceived value - like we've seen before, it's apparently better for tax reasons too to donate a crypto-asset; I imagine now that larger financial institutions are involved and other well-organized organizations have created a legitimate market structure, perhaps like Coinbase, are keeping large sums of capital at bay from investors wanting to buy a lot -- so they can buy up large quantities when necessary to avoid exposing volatility. If you think the layman person investing say as little as $100 (that little or less for them to be aligned with the masses of the ecosystem, to be part of the mob) is educated enough to make a sound investment decision, to understand this complex holistic ecosystem, well you're wrong and if you profit off of selling your incentivized crypto-asset you're taking advantage of people. This is why stock markets were formed with regulations and oversights and due diligence for individual companies, etc. Perhaps you reading this don't fully understand it either, or didn't, and it's long-term implications. So are you going to pretend it's not a Ponzi-Pyramid scheme and hope it works out, and that society isn't actually being taken advantage of? I hope more of you sooner than later realize this. Some people do know this is the game they're playing, and they're happy to take advantage of others - however it's immoral to do if they don't know they're playing that game. The simple truth is the proposed benefits of the structures allowed with incentivized crypto-assets don't work out long-term if you can't separate the two systems. If the system inherently has a Ponzi-Pyramid structure - you can't simply dismiss that, and you can't - as a society - allow it; the two systems being a model that leads to "incentivized collaboration" leading to independently owned services tied together through a transaction layer (that logically doesn't make sense to have an incentivized structure), and that of Ponzi-Pyramid schemes.

iopuy 8y ago
Even if donations were meant to offset capital gains it is still a generous act. I think it is impossible to make the statement "There's likely no generosity here" without knowing more information.
- loceng 8y ago
  No, it's not. That money goes to the government and society as a whole otherwise, which you would owe - and if you didn't pay you'd eventually end up in jail. Paying your taxes to not end up in jail isn't generosity. Paying taxes is being part of a system that you've benefit from. If you gave more money to charity than is owed in taxes - and that was yours that you reasonably and fairly earned - then you could argue there's generosity involved. You're correct in saying that without more confirmed information, we can't know how much or if any generosity occurred. I did however say "likely no generosity" - which is different from saying a firm statement of "no generosity here" - so my statement isn't impossible.
  - jonknee 8y ago
    Someone struck the lottery and donated a ton to worthy causes. That is generous, full stop. If the government was concerned about this they wouldn't allow charitable donations to be deducted. And since you seem so concerned, you can't donate your way out of paying taxes because your total charitable deduction can’t exceed 50% of your adjusted gross income.
  - icebraining 8y ago
    Even if charity donations worked like that, they would still have donated their time and effort in selecting worthwhile charities and dealing with all the bookkeeping.
gfodor 8y ago
The "rich people donate money to avoid paying taxes" meme has always been odd to me. If you donate $1, yes, your tax bill is lower, but you are also out $1. Unless you are corrupt and are funneling money to your own foundation or something, donating money is not a way to beat the system wrt taxes, its just a way to shift money that otherwise would have gone to the government to charitable entities instead. Also, it results in more loss of wealth for the donator: if I owe the government $1 in taxes, I can choose to pay the government that $1 or, if I loathe the idea of the government getting that $1 and I can afford it, I can choose to give ~$3 to a charity instead. The fact that rich people choose to donate to charity at a rate of about 3:1 instead of paying the government says a lot about their faith in the government in spending their money wisely.

pastor_bob 8y ago

It's amazing what a positive impact bitcoin and crypto has had on the world. And it only has just begun. I feel like we're standing on the precipice of a truly new, better age. Once the dinosaurs like Bill Gates of Micro$oft move on who knows what we'll see.

elil17 8y ago
This is a story about a generous person - crypto currencies themselves are little more than Ponzi schemes
deadmetheny 8y ago
You could replace Bitcoin with lottery winnings and get the same takeaway. I'm glad that someone who decided to gamble on Internet Fun Bucks has decided to do something worthwhile with their windfall, but nothing here is inherently tied to crypto. Bitcoin has done nothing but waste energy and computational resources in order to reallocate money between nerds and the unfortunate normies that've been duped into thinking it'll make them rich quickly. That's not something we should be celebrating.
- burger_moon 8y ago
  >Bitcoin has done nothing but waste energy and computational resources in order to reallocate money between nerds and the unfortunate normies that've been duped into thinking it'll make them rich quickly. That's not something we should be celebrating. This thread is about a fund that was created because of bitcoin earnings. So I'm sorry but your rude and tasteless comment does not hold water.
  - deadmetheny 8y ago
    Where the money came from is irrelevant. And wasting energy and computer equipment to create play money for idiots who want to ignore why decades of banking regulation have been implemented is way more "rude and tasteless" than mean words on the Internet. The fact that a small amount of money being shuffled around went to a good cause is nice but doesn't offset the truly exquisite amount of waste the entire crypto ecosystem generates.

sibeliuss 8y ago

Thank you so much!

tlb 8y ago

Thanks, Pineapple person / people. The benefit to society from donating to charity can range from positive, to zero, to negative. Often negative. Anyone with money can donate, but it takes a lot of work to donate to things that make the world better. The Pineapple fund seems to have put in the effort to donate to projects with high positive impact, in a way that does the most good. (It's possible to donate to good projects in bad ways, such as by requiring them to use the money to build a building with your name on it.) Doing the work can be exasperating, because you think "I'm giving away money, and I have to do all this work too???" But it's the work that makes the difference.

jdamon96 8y ago
Can you explain to me why you believe the benefit to society from donating to charity is often negative?
- newnewpdro 8y ago
  I can't speak for the parent, but I've personally known people with parents who ran charities and political campaigns for the sole purpose of collecting donations and spending 100% of the donations on "operations"; paying their salary while they do nothing other than the occasional fundraising as the well dries up.
- tomc1985 8y ago
  A lot of attempts at charity have backfired, often due to cultural differences between the benefactor and those on the receiving end, or a lack of oversight or poorly-thought-out plans. See: PlayPump [1], UNICEF's Cluster-bomb-colored food drops [2], etc [1] http://blogs.ei.columbia.edu/2010/07/01/the-playpump-what-went-wrong/ http://blogs.ei.columbia.edu/2010/07/01/the-playpump-what-we... [2] https://www.upi.com/Defense-News/2003/04/02/UNICEF-Rations-bomblets-same-color/87821049335611/ https://www.upi.com/Defense-News/2003/04/02/UNICEF-Rations-b...
- nur0n 8y ago
  Also see: https://simple.wikipedia.org/wiki/Unintended_consequences https://simple.wikipedia.org/wiki/Unintended_consequences, specifically the Indian cobras. Even with good intentions, predicting outcomes is difficult. When you donate to a charity(or any organization), you are giving them more influence while delegating decision making. The best option seems to be: find something you really care about and get your hands dirty.