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The fact that cryptocurrencies have managed to grow and hold their value for so long is in itself proof that the financial system is not working. A huge chunk

The fact that cryptocurrencies have managed to grow and hold their value for so long is in itself proof that the financial system is not working. A huge chunk of the new money that the Fed is injecting into the system is going straight into the financial sector and some of it is going directly into cryptocurrencies. People have started to figure out that hard work doesn't pay. To earn money, you just need to get close to the massive stream of money that the Fed is constantly dumping into the economy. The whole financial system is an over-engineered mess; packed with technical debt and vulnerabilities. If it was a software system, it would have been rewritten decades ago.

greymeister 8y ago
> If it was a software system, it would have been rewritten decades ago. Like all of the software that runs power plants, defense systems, medical records? You make a good point, accidentally, that no, in fact most systems that become large and complex aren't re-written.
TomVDB 8y ago
> The fact that cryptocurrencies have managed to grow and hold their value for so long is in itself proof that the financial system is not working. The market cap of all stock markets is on the order of $100T. Total bond market cap is of similar scale. The total market cap of cryptocurrencies is $200B (and shrinking). Cryptocurrencies could be 10 bigger than what they are today and they'd still be a rounding error compared to the overall financial markets. The only thing proven by cryptocurrencies is that, at a global scale, the long tail provides enough opportunities for niches to exist.
- panarky 8y ago
  > enough opportunities for niches to exist Exactly. How many times have you heard the argument that cryptocurrencies will never completely replace national currencies, so they should be worthless? Or that because it's harder to buy a coffee with Bitcoin than Euros, that Bitcoin is a fraud. It's not either-or. It isn't all or nothing. Cryptocurrencies can co-exist with national currencies and do just fine.
panarky 8y ago
> you just need to get close to the massive stream of money that the Fed is constantly dumping I hear this all the time, as if the Fed creates money out of thin air and gives it directly to crony capitalists. But I never hear about the actual mechanism that's used. Since this story rarely gets specific enough to really understand what's going on, I tend to think it's a fairy tale. Can you describe how this massive money stream works? Do rich people check their bank balance and there are mystery billions from nowhere? And just how massive is massive? Are we talking billions of dollars a day or what?
- jsmith99 8y ago
  Dumping money in people's bank accounts would be a process called helicopter money, named after the suggestion that central banks could stimulate the economy by printing new money and scattering it out of helicopters. Sadly the Fed hasn't tried that yet. What central banks are doing is buying bonds and other assets from the private sector, and paying for them by creating new money. In the past they might have created new money by ordering a truckload of new $100 bills to be printed, but now they can do it simply by changing the central bank balance of whoever they are buying the bonds from.
  - umanwizard 8y ago
    Those bonds do still have to be paid back. The fed is creating money and loaning it to people, which sounds a lot less dramatic.
    - UncleEntity 8y ago
      They pay them back to...themselves.
      - umanwizard 8y ago
        What do you mean?
      - jondubois 8y ago
paulpauper 8y ago
>The fact that cryptocurrencies have managed to grow and hold their value for so long is in itself proof that the financial system is not working. The fin. system is working fine. A lot of crypto is speculation, which has always existed in one form or another.
nradov 8y ago
The fact that tulip bulb prices have managed to grow and hold their value [in 1636] is proof that the financial system is not working. Oh wait...
api 8y ago
I dunno... some of the pump and dump scams are freaking hilarious: https://cy.bonehi.com/?page=2 https://cy.bonehi.com/?page=2

greymeister 8y ago

> If it was a software system, it would have been rewritten decades ago. Like all of the software that runs power plants, defense systems, medical records? You make a good point, accidentally, that no, in fact most systems that become large and complex aren't re-written.

TomVDB 8y ago

> The fact that cryptocurrencies have managed to grow and hold their value for so long is in itself proof that the financial system is not working. The market cap of all stock markets is on the order of $100T. Total bond market cap is of similar scale. The total market cap of cryptocurrencies is $200B (and shrinking). Cryptocurrencies could be 10 bigger than what they are today and they'd still be a rounding error compared to the overall financial markets. The only thing proven by cryptocurrencies is that, at a global scale, the long tail provides enough opportunities for niches to exist.

panarky 8y ago
> enough opportunities for niches to exist Exactly. How many times have you heard the argument that cryptocurrencies will never completely replace national currencies, so they should be worthless? Or that because it's harder to buy a coffee with Bitcoin than Euros, that Bitcoin is a fraud. It's not either-or. It isn't all or nothing. Cryptocurrencies can co-exist with national currencies and do just fine.

panarky 8y ago

> you just need to get close to the massive stream of money that the Fed is constantly dumping I hear this all the time, as if the Fed creates money out of thin air and gives it directly to crony capitalists. But I never hear about the actual mechanism that's used. Since this story rarely gets specific enough to really understand what's going on, I tend to think it's a fairy tale. Can you describe how this massive money stream works? Do rich people check their bank balance and there are mystery billions from nowhere? And just how massive is massive? Are we talking billions of dollars a day or what?

jsmith99 8y ago
Dumping money in people's bank accounts would be a process called helicopter money, named after the suggestion that central banks could stimulate the economy by printing new money and scattering it out of helicopters. Sadly the Fed hasn't tried that yet. What central banks are doing is buying bonds and other assets from the private sector, and paying for them by creating new money. In the past they might have created new money by ordering a truckload of new $100 bills to be printed, but now they can do it simply by changing the central bank balance of whoever they are buying the bonds from.
- umanwizard 8y ago
  Those bonds do still have to be paid back. The fed is creating money and loaning it to people, which sounds a lot less dramatic.
  - UncleEntity 8y ago
    They pay them back to...themselves.
    - umanwizard 8y ago
      What do you mean?
    - jondubois 8y ago

paulpauper 8y ago

>The fact that cryptocurrencies have managed to grow and hold their value for so long is in itself proof that the financial system is not working. The fin. system is working fine. A lot of crypto is speculation, which has always existed in one form or another.

nradov 8y ago

The fact that tulip bulb prices have managed to grow and hold their value [in 1636] is proof that the financial system is not working. Oh wait...

api 8y ago

I dunno... some of the pump and dump scams are freaking hilarious: https://cy.bonehi.com/?page=2 https://cy.bonehi.com/?page=2