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GameStop, Bitcoin and the Commoditization of Populist Rage

160 points by Priem19 6y ago

maerF0x0 6y ago
> It’s not surprising that when it comes to their investment strategies, that the “you only live once” philosophy and a preference for high-risk high-return investments is preferred. What has this generation got to lose? That is pure irrationality. IMO The real issue is a crap education system which gives neither opportunity, nor good advice-- instead of training rational actors w/ valueable skills it focuses on building activists before they have any life experience and smacks of marxism. What's the path out? Free education for socially profitable degrees might be a fix (ie STEM). Not wasting the first 18 years of a person's life might be an alternative (eg: why are we memorizing dates permanently recorded online, why arent we teaching (personal) financial and programming expertise?). Edit: by financial I meant personal financial skills, not wall street skills. My apologies for the imprecision.
- skulk 6y ago
  > Not wasting the first 18 years of a person's life might be an alternative It's not an alternative, it's strictly necessary. People look around and wonder how 70 million Americans voted for a certain someone, and the clear-cut answer isn't farther than their local public high school. A system designed from the ground up to mold nearly everybody into obedient manufacturing drones in a economy that doesn't rely on manufacturing anymore is bound to create huge issues.
  - deleted 6y ago
    [deleted]
- mrslave 6y ago
  > IMO The real issue is a crap education system which gives neither opportunity, nor good advice The nihilism of YOLO has little to do with schooling. A broken education system is well after the fact of the economic and social reality constituting their environment. The young today have impossible economic hurdles: unaffordable shoebox apartments, high student debt, no incentive to save, no good jobs for modest tasks. And society is generally incoherent: "communities" are activist and political minority groups, or online, and not your actual neighbourhood; in-person communities are fractured by many different spoken languages; plus the cultural promotion of pornography, sex, and drugs.
  - maerF0x0 6y ago
    > no incentive to save I highly disagree with this. The S&P 500 has returned 400% since the crash in a mere 12 yrs. If doubling your money every 6 years does not sound excellent to you, the it's a financial education that is lacking, not real opportunity. > in-person communities are fractured by many different spoken languages I actually have found this really enjoyable, to have lots of opportunity to speak/learn Spanish. > cultural promotion of pornography, sex, and drugs. Given how these affect the reward centers of the brains, IMO these should all be reserved as post success rewards. If someone wants to smoke weed all day and do nothing, that sucks. But if they're high achieving and want to relax _after_ killing it, who are we to tell them no?
    - mrslave 6y ago
      > The S&P 500 has returned 400% since the crash in a mere 12 yrs. If doubling your money every 6 years does not sound excellent to you, the it's a financial education that is lacking, not real opportunity. This is rich in hindsight bias and selective reasoning. Picking returns since the minimum is intellectually dishonest. Also the inflation fueling this is also fueling the economic disillusionment of the YOLO Gamestop "investor." The greater problem I have with your comments is you are focused only on potential high achievers, and seem to have little sympathy for the common man. We don't only need a nation of high achievers with the good education you advocate. We need a nation where the average (really median) person has a future to look forward to, and can achieve at least a modicum of accomplishment and self-respect, if not wealth and prosperity too. YOLO investors as per Gamestop are not the people you are discussing. They are very average people who have very little to look forward to.
    - UncleMeat 6y ago
      And the Nasdaq only matched its 2000 peak in 2017. Investment can be powerful, but you are cherry picking.
    - solosoyokaze 6y ago
      > If someone wants to smoke weed all day and do nothing, that sucks. But if they're high achieving and want to relax _after_ killing it, who are we to tell them no? Why does it suck? If people want to self-medicate, why judge them? A society where everyone must be “high achieving” sounds like a dystopia. We’re practically already post-scarcity on a lot of goods and automation is going to further eliminate the need for workers.
- scsilver 6y ago
  And why are teachers teaching liberal ideas? Maybe because the rationality of non liberals and non progressives leads to a pissed off and subversive underclass. If we are being rational, why not fix the system to produce "more rational" teachers. Programmers and financiers are not the best at shaping childrens minds, its not like those fields teach about childhood development.
  - maerF0x0 6y ago
    > its not like those fields teach about childhood development. I agree, Pedagogical science fits in STEM and I think it's very important we deeply invest in childhood development. I mostly think the subject matter of school is questionable, not the fact we go to school (hence why I suggested we also fund STEM degrees for anyone smart enough to finish it)
    - scsilver 6y ago
      I agree, however, I do think liberal arts is essential to being a humanist engineer. And personally, I want to be producing engineers who's main focus is improving quality of life. People I talk to who dont have the range of wide education miss a lot of context for the world they are living in, temporaly, politically, and socially. And would push to keep it a necessary part of that stem education.
Judgmentality 6y ago
> And so we see Gamestop story fall out of that. In a nutshell a bunch of retail investors (possibly with help from institutional insiders) decided to pump a small cap stock far beyond what the valuation of the company should be. This completely ignores the fact that the stock was shorted over 100% of float, and people knew it was going to squeeze so they bought in hoping to ride the wave. And that did in fact happen, although timing is everything. I could go on, but this philosophical piece is incredibly lazy with its historical accuracy.
- bargl 6y ago
  This. The stock was at around 20/share before the spike and was considered a WIN at that. It's now sitting at 40/share and is probably priced high. It was shorted to below 2/share at some point which is imo insane given what we've seen EVERY SINGLE CONSOLE RELEASE EVER. The media saw an opportunity to make this about populist rage, and we all bit it. But this was started as a short squeeze and a very effective one at that. EDIT: Just to clarify. There was obviously a short squeeze. That short squeeze could have stopped at 20/share and been a GREAT short squeeze. I have friends who got off the ride at that point thinking the squeeze was over. The frenzy that happened that pushed the stock to 400 was insane, and wouldn't have happened if this stock didn't start trending. You don't have a subreddit go from 2m to 8m in 2 weeks unless there's some serious frenzy.
  - 0xy 6y ago
    GameStop's margins are awful, and no amount of hypey releases will save them. Their website is still garbage. This is a flailing has-been physical retail business, propped up by Microsoft and Sony who see it as a billboard.
    - bargl 6y ago
      That's a valid argument, but they showed a ton of revenue lately and shouldn't be valued at 2/share. I think the stock is between a 10/share and 30/share stock but I'm not a professional. Honestly the professionals aren't professionals and that's backed by some studies but I won't get into that right now. The idea that you can cover this story without mentioning the short squeeze is lazy or dishonest. While it's an artificial boost to a stocks price it's a completely valid boost to that price too. I use the PS5 as an example. How expensive is it? 500? Wrong. It's 500 if you put in time and energy, but if you value your time and energy over that of the retail price you can get one on ebay for 1000. Is it worth 1000? Only if you are impatient. What's GME price? 2/share 15/share doesn't matter. If I have 1000 of something and I know that 1400 people MUST buy it by the end of the month, I can be sure that I'll make some money there. Was 400/share reasonable? I don't think so, that was mania and the fact that this short squeeze got mainstream and people had FOMO.
seibelj 6y ago
I find bitcoin to be the greatest innovation in finance in the 21st century, a watershed moment in economic development. For the first time any person can own a financial asset completely decoupled from any government. That’s the value proposition for me. It’s not nihilism - it’s optimism in the individual to succeed over the corrupt state.
- skulk 6y ago
  > a financial asset completely decoupled from any government is gold not one of these?
  - seibelj 6y ago
    I neglected to explain it in my original post but bitcoin has all of the good properties of gold and none of the bad - primarily in terms of how easy it is to settle (especially over long distances) and the guaranteed fixed supply and emission rate.
    - missedthecue 6y ago
      Gold has real industrial and consumer uses (and therefore reliable demand). I don't see why anyone buys Bitcoin for any reason other than that another speculator will pay him more for it later.
      - selestify 6y ago
        Why does it have to be more? As long as someone else pays him roughly the same amount for Bitcoin in the future, it’ll have worked as a store of value. Do you really think the people buying gold are buying it so that they can sell it to industry, as opposed to buying it so that they could potentially sell it to someone else who does the same thing? If gold price were based on industrial uses alone it’d be worth a small fraction of what it’s worth now. Is gold a Ponzi scheme?
- cma 6y ago
  Couldn't you do that with gold or even earlier, seashells?
suikadayo 6y ago
I’ll be curious to read what the author thinks in the next few years regarding DeFi and NFTs on Ethereum and other smart contract blockchains. Things are just getting started and it’s going to get interesting.
solosoyokaze 6y ago
This could have an interesting point but it's lost in its anti-Bitcoin rhetoric. Bitcoin is like the lottery? It's up thousands of percent over the years. Many, many people have made real money and/or are sitting on massive gains. Regardless of if you think Bitcoin has actual utility (I think it does in spades), labeling it a "failure" means your argument is instantly ignored by every person who's up on their investment (aka every person who's held Bitcoin over the past 10 years).
- lmm 6y ago
  Plenty of people made money on the South Sea company until they didn't.
  - solosoyokaze 6y ago
    This has no relevance. People keep trying to compare Bitcoin to anything they think will help them make their point, but it’s nonsensical.
    - lmm 6y ago
      It's very relevant. To claim Bitcoin is a success because people have made money from it is nonsense.
      - solosoyokaze 6y ago
        No, to compare Bitcoin to something that has absolutely nothing to do with Bitcoin is ridiculous. That’s like me saying Apple is going to go out of business because Sears went out of business. A complete non sequitur.
        lmm 6y ago
        If I said something like "Apple won't go out of business because it's a big company", comparing to Sears would be completely fair.
Clewza313 6y ago
> Everyday I see a world where many in my generation have simply given up all hope for opportunity of a family, a house, a stable career and forced to confront an uncertain future in a world that is slowly boiling itself to death. South Korea and Japan are 10-20 years ahead of the same curve here. However, the result has been resignation and stagnation, not revolution. https://en.wikipedia.org/wiki/Sampo_generation https://en.wikipedia.org/wiki/Sampo_generation https://en.wikipedia.org/wiki/Satori_generation https://en.wikipedia.org/wiki/Satori_generation
- 1-6 6y ago
  On the Sampo generation wiki, 53.5% state that there's no money to save. Although I'm not an expert on these matters, what happened to packing your bags and moving out of Seoul or Gyeonggi-do to save some money? I think the motivation may not be there for some or social pressures keep people where they are in life. In Korea, you can easily raise kids if you're outside of Seoul/Gyeonggi. The teacher to student ratio is very close to 1.
  - yongjik 6y ago
    Not enough jobs. People do settle in smaller cities if there are jobs - the city of Ulsan has higher GDP per capita than Seoul, thanks to Hyundai Motors and other big plants, but it's not exactly easy to get one of these jobs. In the end, most people flock to the greater Seoul area because that's where most jobs are.
    - nazgulnarsil 6y ago
      if your savings rate is lower then it isn't exactly a good job, though you may enjoy the amenities while you are there...though not if you are working too hard to have time for them.
      - selestify 6y ago
        What makes you think the savings rate is lower in the cities? You might not even have a job in the first place outside the city
nceqs3 6y ago
Really enjoyed this piece. He could have also dove into SPACs and Tesla. Being a fake populist on Twitter is incredibly lucrative.
seaourfreed 6y ago
The US Congress sells out all citizens, via lobbyists. Populist rage comes a rigged economy, where they are losing money. Rigged pharma. Unethical medical billing. Out of control healthcare costs. 2008 mortgage crisis. High Frequency trading firms front running trades. Panama Papers. Libor. And a million more. Citizens won't have it any more. Fixing congress (so they don't sell us out), and congress CAN would WOULD fix this.
- solosoyokaze 6y ago
  I'd add the rules around being an accredited investor. The US government cuts off early stage investment opportunities to non-high net worth individuals "for their own good". The same US government that happily allows for state run lotteries.
  - vinceguidry 6y ago
    This is mostly due to the dangers it poses to old people, who are by and large defenseless against scammers. If you don't put barriers in place to prevent old people from making the choice to throw their nest egg away, bilking old people becomes an industry.
    - solosoyokaze 6y ago
      There are plenty of old people buying lottery tickets. All of these justifications are just an excuse to erect artificial barriers around the early stage market (aka where all the upside is). People should be free to spend their money as they see fit, even if that means shoveling it into a campfire.
      - vinceguidry 6y ago
        The lottery isn't a scam, it won't call you at bedtime threatening devastating legal action unless you take care of this very urgent business matter.
        6y ago
hintymad 6y ago
> Let’s state the uncomfortable truth. The future for many Americans is bleak and their lives are going to be nasty, brutish and short. Everyday I see a world where many in my generation have simply given up all hope for opportunity of a family, a house, a stable career and forced to confront an uncertain future in a world that is slowly boiling itself to death. But why? Why can't more kids get into STEM fields? Why aren't there more decent jobs, say manufacturing jobs? Why are American kids so bad at basic reading, critical thinking, and basic arithmetics? Why is there an apparent bifurcation in the K5 system, where a large number of perfectly capable kids get misled and tortured by craps like Common Core, while a small number of kids are ready for algebra or more advanced maths? Why do we have kids who get straight A in high school yet can't pass placement test in a community college? Why do we have so many kids who ace through high school think entry-level courses like introductory calculus or organic chemistry are too hard? The questions can go on. And I certainly don't hope that the answers are what Seattle and California public schools have started to teach: https://equitablemath.org/ https://equitablemath.org/
- seibelj 6y ago
  If you have enough money you can move to a good public school district or pay for private school. If you are poor you must accept the monopoly school in your district - that is the rule. I myself enjoy having choices for myself and my children but that is a consequence of money. This is why I support school vouchers - let parents determine how to spend their money, and let schools compete for students.
  - hintymad 6y ago
    Yeah, or like in other countries, teachers are subject to competition and can be replaced by better ones.
  - BrianOnHN 6y ago
    Vouchers only tilt things in favor of private schools. The problem (US) is we've been steadily decreasing the relative cap on public school spending. If the spending wasn't so little, you'd probably be a lot more adamant about that voucher.
Bluestein 6y ago
> This isn’t some David vs Goliath moment. This is Goliath drinking champagne while David dances for his amusement. This is great. Sums it up.
- rakkhi 6y ago
  I know for him ironically making fun of soundbite memes like drain the swamp I thought it was a very well written article with some amazing quotable passages. Definately helps I agree with the contents though "Buying lottery tickets and trading manipulated crypto assets are both a tax on the poor and disenfranchised."
elihu 6y ago
> And so we see Gamestop story fall out of that. In a nutshell a bunch of retail investors (possibly with help from institutional insiders) decided to pump a small cap stock far beyond what the valuation of the company should be. The whole setup requires a significant number of people to buy and hold the asset at a price that makes no sense economically. And in doing so they have locked each other in a game of musical chairs in which they collectively have to pour more and more money into this unsustainable scheme in order to maintain the bubble. I think this completely misses the point. This isn't just a plain pump-and-dump scheme. Before /r/wallstreetbets got involved, the price of GameStop was being artificially held low by over-zealous shorts. So some investors figured out the shorts were in an untenable position and called their bluff. The extreme high prices are as far as I can tell just part of the process of the stock price returning to a regular equilibrium, whatever that is. Blaming WSB for a valuation that wasn't based in reality is a bit silly when it wasn't based in reality to begin with. Without the shorts, the stock couldn't have spiked as high as it did. And in the end, GameStop will survive a bit longer (or even thrive, if it can figure out a successful model), and the people it employs will continue to have jobs. I stopped reading the article when it turned into a rant against Bitcoin. I mean fine, you can criticize Bitcoin if you want but there's more to it than just people investing in currency speculation. If you don't think Bitcoin has any legitimate uses you're just not paying attention.
dman7 6y ago
I agree with how you've painted GameStop and Bitcoin as the nihilistic struggle against the establishment. However, I disagree with your conclusion. You make a pretty bold argument that underpins the whole conclusion so that's what I'll focus on: > Bitcoin doesn’t work, it’s a naked speculative bubble based on a technology that doesn’t scale can’t and can’t replace any existing financial service When you say Bitcoin doesn't work, what are you referring to? As a medium of exchange, you're correct: it doesn't work. But the narrative in crypto communities is that Bitcoin is becoming a store-of-value. Under that narrative, Bitcoin is "working": it's replacing gold as a store of value. We're seeing institutions expand their portfolios to include BTC. There are additional arguments for why Bitcoin may be a better hedge against inflation than gold or oil. Here is an interesting analysis by Winklevoss twins [1] There's more to cryptocurrency than Bitcoin. Today, there are over 4,000 crypto tokens out there and they're each solving various use cases with varying success. One particular thriving area is Decentralized Finance (DeFi) which creates decentralized exchanges, market makers, lenders/borrowers that aim to disrupt traditional (centralized) financial structures. As proof that there's something here, decentralized exchanges are taking market share from centralized ones - which are valued at $100B. Or consider the more visionary take on cryptocurrencies: decentralized computation networks that create economies for network participants. Centralized businesses must act in the interest of shareholders and are built to extract as much value from their product as possible. Decentralized computation networks, on the other hand, do not. They can (and are) constructed to be minimally extractive, taking only what is needed to reward network participants & secure the network. Thus, the value capture is distributed across all network participants, enabling new forms of humans organizing together to achieve a common goal. Check out [3] if you're interested in learning more. I hope this spurs your curiosity to dig into cryptocurrencies beyond just the surface. Thanks for writing the article! [1] https://winklevosscapital.com/the-case-for-500k-bitcoin/ https://winklevosscapital.com/the-case-for-500k-bitcoin/ [2] https://defipulse.com/ https://defipulse.com/ [3] https://smartcontentpublication.medium.com/the-purpose-and-value-of-cryptocurrency-and-tokens-4ad9db9fac7b https://smartcontentpublication.medium.com/the-purpose-and-v...
pcstl 6y ago
"Let’s state the uncomfortable truth. The future for many Americans is bleak and their lives are going to be nasty, brutish and short." I find it funny how first-worlders are horrified by the idea that they might have to live in mild discomfort. Maybe try looking at how most of the world that isn't the US and Western Europe lives before saying people's lives will be "nasty, brutish and short" because they won't be working some low-skill 9 to 5 for 40 to 50 years while making 6 figures and then retire with the rest of their lives pretty much planned out for them.
- Qiu_Zhanxuan 6y ago
  Is this sarcasm?
  - pcstl 6y ago
    No, not really. More of a statement on how out of touch with reality it seems first world inhabitants are, to the point where they think not having a guaranteed well-paying job or not being as rich as their parents is comparable to the kind of life Hobbes was thinking of when he coined that idiom.
    - enraged_camel 6y ago
      Having your frame of reference defined by your own circumstances and the standards of the society you live in is not "out of touch." People in other parts of the world might have it worse — that is completely irrelevant when it comes to personal happiness.
      - pcstl 6y ago
        It is not irrelevant if you want to use an expression such as "nasty, brutish and short", coined by Hobbes to refer to the condition of man living by himself, without a social structure to support him. It implies that people in the first world - specifically, the US - are living in conditions somehow comparable in their uncertainty to people living in a pre-civilized state. If anyone is minimally realistic about the first world, they will know that it is an absurd statement. This kind of overly dramatic phrase is not accurate nor conducive to productive debate. Its only reason for existing is to make people indignant and unaware of their own privilege in order to make them support your cause of choice - or, more frequently, in order to make them fight the people who you designate as the "cause" of their "suffering". There's also a personal aspect to my comment, in that I live in a country where, even if the USA's living standard keeps falling for the next 50 years, it will probably be just about comparable to here. Watching the most privileged people in the world be all "woe is me, I might not be as rich as my dad!" is not something I'm very able to take seriously.
samirillian 6y ago
Socialism or barbarism! Socialism provides a "yes" to every "no" in this article. Authors critiques are good, but author too lapses into nihilism. Even cryptocurrency is not beyond rescue, it is only beyond rescue under a capitalist mode of production. Technology is the cause and effect, but we _do_ have agency.
h0nd 6y ago
>The last ten years have seen a massive redistribution of wealth from this age bracket into older demographics. This has very strongly increased during that year of pandemic. In my country a vast amount of money is spent on protecting old people that future generations will be liable for.
- throwawaywoke 6y ago
  Essentially, shutting down the economy (well, the poor person sectors only) was also a move to protect old people at the expense of young people. The COVID IFR rate increases sharply with age. If you don't see what's happening, then quite bluntly, you need to broaden your circles to familiarize yourself with people that aren't privileged enough to be able to continue working remotely.
  - epinephrinios 6y ago
    The fruits of gerontocracy.
- coolgeek 6y ago
  > a massive redistribution of wealth from this age bracket into older demographics I'm not defending the current system/situation, but this seems to mischaracterize the article it links to. Wealth wasn't redistributed, because millenials (more generally, younger generations) didn't have it to begin with. What happened was that older generations were able to - and did - capture almost all of the surplus that was generated. I'm not saying that the author intentionally mischaracterized this. I'm saying that you can't solve a problem if you don't understand the nature of the problem. You can't solve a problem by focusing your efforts on a different problem (possibly the wrong problem, at least in this context).
toss1 6y ago
>>"Bitcoin serves as an emotional dual to the lottery. While in the lottery people pour their hope and money into the chance of life-changing winnings based on impossible odds." I'm reminded of an advert campaign slogan that New York State ran for it's lottery: "All you need is a dollar and a dream". Spot on. An astute friend's comment was: "We'll keep the dollar and you keep the dream". I've long agreed with the author that lotteries are an innumeracy tax. His insight that BTC is also largely the same is spot on.
smlckz 6y ago
Is it possible to make a cryptocurrency that does "real" work as its proof-of-work: work which is computationally intensive, but it solves some real life problems instead of "wasting" the energy?
- kinghajj 6y ago
  It is, yes. Curiously though, making the work "useful" might actually harm the security of a block chain and make it more likely to suffer a 51% attack. With a chain like Bitcoin's, if you want to perform a 51% attack, you would have to purchase a large amount of SHA-256 ASIC mining hardware. After the attack, public confidence would be shaken so severely that the market price would crash, and might never recover. So afterwards, the attacker is left with a pile of ASIC hardware that's nowhere near as valuable as before. If the PoW algorithm were based on something more "useful", then after a 51% attack, the attacker would have a large amount of hardware that they could easily repurpose, so it would retain a lot of its previous value. That makes the total cost of the attack much lower.
- trevelyan 6y ago
  Look into Saito Consensus: https://saito.io/saito-whitepaper.pdf https://saito.io/saito-whitepaper.pdf The network pays the nodes that run infrastructure rather than miners or stakers. Cost-of-attack is generated by the same nodes, so paying for infrastructure does not defund consensus. Security scales with fee-throughput of the network, while fee-throughput pays for scalability.
moralsupply 6y ago
> Bitcoin doesn’t work, it’s a naked speculative bubble based on a technology that doesn’t scale can’t and can’t replace any existing financial service Feel free to short Bitcoin in a futures market, and keep all your wealth allocated in assets associated with the US dollar. We'll talk again in 5 years time.
- zanmat0 6y ago
  Why are you replying to the author in here?
  - moralsupply 6y ago
    It's called "rhetoric"
- villasv 6y ago
  Thankfully, I was never able to find an easy way to short BTC. I would have done it >5 years ago and failed spectacularly. I'm still bearish, but wiser.
  - boring_twenties 6y ago
    You can short it on any crypto exchange that allows margin trading, such as Kraken.
    - akra 6y ago
      Would be extremely worried about counterparty risk though. The other guy has to pay up and I'm not sure of the controls/regulations around enforcing that?

160 points by Priem19 6y ago

> It’s not surprising that when it comes to their investment strategies, that the “you only live once” philosophy and a preference for high-risk high-return investments is preferred. What has this generation got to lose? That is pure irrationality. IMO The real issue is a crap education system which gives neither opportunity, nor good advice-- instead of training rational actors w/ valueable skills it focuses on building activists before they have any life experience and smacks of marxism. What's the path out? Free education for socially profitable degrees might be a fix (ie STEM). Not wasting the first 18 years of a person's life might be an alternative (eg: why are we memorizing dates permanently recorded online, why arent we teaching (personal) financial and programming expertise?). Edit: by financial I meant personal financial skills, not wall street skills. My apologies for the imprecision.

skulk 6y ago
> Not wasting the first 18 years of a person's life might be an alternative It's not an alternative, it's strictly necessary. People look around and wonder how 70 million Americans voted for a certain someone, and the clear-cut answer isn't farther than their local public high school. A system designed from the ground up to mold nearly everybody into obedient manufacturing drones in a economy that doesn't rely on manufacturing anymore is bound to create huge issues.
- deleted 6y ago
  [deleted]
mrslave 6y ago
> IMO The real issue is a crap education system which gives neither opportunity, nor good advice The nihilism of YOLO has little to do with schooling. A broken education system is well after the fact of the economic and social reality constituting their environment. The young today have impossible economic hurdles: unaffordable shoebox apartments, high student debt, no incentive to save, no good jobs for modest tasks. And society is generally incoherent: "communities" are activist and political minority groups, or online, and not your actual neighbourhood; in-person communities are fractured by many different spoken languages; plus the cultural promotion of pornography, sex, and drugs.
- maerF0x0 6y ago
  > no incentive to save I highly disagree with this. The S&P 500 has returned 400% since the crash in a mere 12 yrs. If doubling your money every 6 years does not sound excellent to you, the it's a financial education that is lacking, not real opportunity. > in-person communities are fractured by many different spoken languages I actually have found this really enjoyable, to have lots of opportunity to speak/learn Spanish. > cultural promotion of pornography, sex, and drugs. Given how these affect the reward centers of the brains, IMO these should all be reserved as post success rewards. If someone wants to smoke weed all day and do nothing, that sucks. But if they're high achieving and want to relax _after_ killing it, who are we to tell them no?
  - mrslave 6y ago
    > The S&P 500 has returned 400% since the crash in a mere 12 yrs. If doubling your money every 6 years does not sound excellent to you, the it's a financial education that is lacking, not real opportunity. This is rich in hindsight bias and selective reasoning. Picking returns since the minimum is intellectually dishonest. Also the inflation fueling this is also fueling the economic disillusionment of the YOLO Gamestop "investor." The greater problem I have with your comments is you are focused only on potential high achievers, and seem to have little sympathy for the common man. We don't only need a nation of high achievers with the good education you advocate. We need a nation where the average (really median) person has a future to look forward to, and can achieve at least a modicum of accomplishment and self-respect, if not wealth and prosperity too. YOLO investors as per Gamestop are not the people you are discussing. They are very average people who have very little to look forward to.
  - UncleMeat 6y ago
    And the Nasdaq only matched its 2000 peak in 2017. Investment can be powerful, but you are cherry picking.
  - solosoyokaze 6y ago
    > If someone wants to smoke weed all day and do nothing, that sucks. But if they're high achieving and want to relax _after_ killing it, who are we to tell them no? Why does it suck? If people want to self-medicate, why judge them? A society where everyone must be “high achieving” sounds like a dystopia. We’re practically already post-scarcity on a lot of goods and automation is going to further eliminate the need for workers.
scsilver 6y ago
And why are teachers teaching liberal ideas? Maybe because the rationality of non liberals and non progressives leads to a pissed off and subversive underclass. If we are being rational, why not fix the system to produce "more rational" teachers. Programmers and financiers are not the best at shaping childrens minds, its not like those fields teach about childhood development.
- maerF0x0 6y ago
  > its not like those fields teach about childhood development. I agree, Pedagogical science fits in STEM and I think it's very important we deeply invest in childhood development. I mostly think the subject matter of school is questionable, not the fact we go to school (hence why I suggested we also fund STEM degrees for anyone smart enough to finish it)
  - scsilver 6y ago
    I agree, however, I do think liberal arts is essential to being a humanist engineer. And personally, I want to be producing engineers who's main focus is improving quality of life. People I talk to who dont have the range of wide education miss a lot of context for the world they are living in, temporaly, politically, and socially. And would push to keep it a necessary part of that stem education.

Judgmentality 6y ago

> And so we see Gamestop story fall out of that. In a nutshell a bunch of retail investors (possibly with help from institutional insiders) decided to pump a small cap stock far beyond what the valuation of the company should be. This completely ignores the fact that the stock was shorted over 100% of float, and people knew it was going to squeeze so they bought in hoping to ride the wave. And that did in fact happen, although timing is everything. I could go on, but this philosophical piece is incredibly lazy with its historical accuracy.

bargl 6y ago
This. The stock was at around 20/share before the spike and was considered a WIN at that. It's now sitting at 40/share and is probably priced high. It was shorted to below 2/share at some point which is imo insane given what we've seen EVERY SINGLE CONSOLE RELEASE EVER. The media saw an opportunity to make this about populist rage, and we all bit it. But this was started as a short squeeze and a very effective one at that. EDIT: Just to clarify. There was obviously a short squeeze. That short squeeze could have stopped at 20/share and been a GREAT short squeeze. I have friends who got off the ride at that point thinking the squeeze was over. The frenzy that happened that pushed the stock to 400 was insane, and wouldn't have happened if this stock didn't start trending. You don't have a subreddit go from 2m to 8m in 2 weeks unless there's some serious frenzy.
- 0xy 6y ago
  GameStop's margins are awful, and no amount of hypey releases will save them. Their website is still garbage. This is a flailing has-been physical retail business, propped up by Microsoft and Sony who see it as a billboard.
  - bargl 6y ago
    That's a valid argument, but they showed a ton of revenue lately and shouldn't be valued at 2/share. I think the stock is between a 10/share and 30/share stock but I'm not a professional. Honestly the professionals aren't professionals and that's backed by some studies but I won't get into that right now. The idea that you can cover this story without mentioning the short squeeze is lazy or dishonest. While it's an artificial boost to a stocks price it's a completely valid boost to that price too. I use the PS5 as an example. How expensive is it? 500? Wrong. It's 500 if you put in time and energy, but if you value your time and energy over that of the retail price you can get one on ebay for 1000. Is it worth 1000? Only if you are impatient. What's GME price? 2/share 15/share doesn't matter. If I have 1000 of something and I know that 1400 people MUST buy it by the end of the month, I can be sure that I'll make some money there. Was 400/share reasonable? I don't think so, that was mania and the fact that this short squeeze got mainstream and people had FOMO.

seibelj 6y ago

I find bitcoin to be the greatest innovation in finance in the 21st century, a watershed moment in economic development. For the first time any person can own a financial asset completely decoupled from any government. That’s the value proposition for me. It’s not nihilism - it’s optimism in the individual to succeed over the corrupt state.

skulk 6y ago
> a financial asset completely decoupled from any government is gold not one of these?
- seibelj 6y ago
  I neglected to explain it in my original post but bitcoin has all of the good properties of gold and none of the bad - primarily in terms of how easy it is to settle (especially over long distances) and the guaranteed fixed supply and emission rate.
  - missedthecue 6y ago
    Gold has real industrial and consumer uses (and therefore reliable demand). I don't see why anyone buys Bitcoin for any reason other than that another speculator will pay him more for it later.
    - selestify 6y ago
      Why does it have to be more? As long as someone else pays him roughly the same amount for Bitcoin in the future, it’ll have worked as a store of value. Do you really think the people buying gold are buying it so that they can sell it to industry, as opposed to buying it so that they could potentially sell it to someone else who does the same thing? If gold price were based on industrial uses alone it’d be worth a small fraction of what it’s worth now. Is gold a Ponzi scheme?
cma 6y ago
Couldn't you do that with gold or even earlier, seashells?

suikadayo 6y ago

I’ll be curious to read what the author thinks in the next few years regarding DeFi and NFTs on Ethereum and other smart contract blockchains. Things are just getting started and it’s going to get interesting.

solosoyokaze 6y ago

This could have an interesting point but it's lost in its anti-Bitcoin rhetoric. Bitcoin is like the lottery? It's up thousands of percent over the years. Many, many people have made real money and/or are sitting on massive gains. Regardless of if you think Bitcoin has actual utility (I think it does in spades), labeling it a "failure" means your argument is instantly ignored by every person who's up on their investment (aka every person who's held Bitcoin over the past 10 years).

lmm 6y ago
Plenty of people made money on the South Sea company until they didn't.
- solosoyokaze 6y ago
  This has no relevance. People keep trying to compare Bitcoin to anything they think will help them make their point, but it’s nonsensical.
  - lmm 6y ago
    It's very relevant. To claim Bitcoin is a success because people have made money from it is nonsense.
    - solosoyokaze 6y ago
      No, to compare Bitcoin to something that has absolutely nothing to do with Bitcoin is ridiculous. That’s like me saying Apple is going to go out of business because Sears went out of business. A complete non sequitur.
      - lmm 6y ago
        If I said something like "Apple won't go out of business because it's a big company", comparing to Sears would be completely fair.

Clewza313 6y ago

> Everyday I see a world where many in my generation have simply given up all hope for opportunity of a family, a house, a stable career and forced to confront an uncertain future in a world that is slowly boiling itself to death. South Korea and Japan are 10-20 years ahead of the same curve here. However, the result has been resignation and stagnation, not revolution. https://en.wikipedia.org/wiki/Sampo_generation https://en.wikipedia.org/wiki/Sampo_generation https://en.wikipedia.org/wiki/Satori_generation https://en.wikipedia.org/wiki/Satori_generation

1-6 6y ago
On the Sampo generation wiki, 53.5% state that there's no money to save. Although I'm not an expert on these matters, what happened to packing your bags and moving out of Seoul or Gyeonggi-do to save some money? I think the motivation may not be there for some or social pressures keep people where they are in life. In Korea, you can easily raise kids if you're outside of Seoul/Gyeonggi. The teacher to student ratio is very close to 1.
- yongjik 6y ago
  Not enough jobs. People do settle in smaller cities if there are jobs - the city of Ulsan has higher GDP per capita than Seoul, thanks to Hyundai Motors and other big plants, but it's not exactly easy to get one of these jobs. In the end, most people flock to the greater Seoul area because that's where most jobs are.
  - nazgulnarsil 6y ago
    if your savings rate is lower then it isn't exactly a good job, though you may enjoy the amenities while you are there...though not if you are working too hard to have time for them.
    - selestify 6y ago
      What makes you think the savings rate is lower in the cities? You might not even have a job in the first place outside the city

nceqs3 6y ago

Really enjoyed this piece. He could have also dove into SPACs and Tesla. Being a fake populist on Twitter is incredibly lucrative.

seaourfreed 6y ago

The US Congress sells out all citizens, via lobbyists. Populist rage comes a rigged economy, where they are losing money. Rigged pharma. Unethical medical billing. Out of control healthcare costs. 2008 mortgage crisis. High Frequency trading firms front running trades. Panama Papers. Libor. And a million more. Citizens won't have it any more. Fixing congress (so they don't sell us out), and congress CAN would WOULD fix this.

solosoyokaze 6y ago
I'd add the rules around being an accredited investor. The US government cuts off early stage investment opportunities to non-high net worth individuals "for their own good". The same US government that happily allows for state run lotteries.
- vinceguidry 6y ago
  This is mostly due to the dangers it poses to old people, who are by and large defenseless against scammers. If you don't put barriers in place to prevent old people from making the choice to throw their nest egg away, bilking old people becomes an industry.
  - solosoyokaze 6y ago
    There are plenty of old people buying lottery tickets. All of these justifications are just an excuse to erect artificial barriers around the early stage market (aka where all the upside is). People should be free to spend their money as they see fit, even if that means shoveling it into a campfire.
    - vinceguidry 6y ago
      The lottery isn't a scam, it won't call you at bedtime threatening devastating legal action unless you take care of this very urgent business matter.
      - 6y ago

hintymad 6y ago

> Let’s state the uncomfortable truth. The future for many Americans is bleak and their lives are going to be nasty, brutish and short. Everyday I see a world where many in my generation have simply given up all hope for opportunity of a family, a house, a stable career and forced to confront an uncertain future in a world that is slowly boiling itself to death. But why? Why can't more kids get into STEM fields? Why aren't there more decent jobs, say manufacturing jobs? Why are American kids so bad at basic reading, critical thinking, and basic arithmetics? Why is there an apparent bifurcation in the K5 system, where a large number of perfectly capable kids get misled and tortured by craps like Common Core, while a small number of kids are ready for algebra or more advanced maths? Why do we have kids who get straight A in high school yet can't pass placement test in a community college? Why do we have so many kids who ace through high school think entry-level courses like introductory calculus or organic chemistry are too hard? The questions can go on. And I certainly don't hope that the answers are what Seattle and California public schools have started to teach: https://equitablemath.org/ https://equitablemath.org/

seibelj 6y ago
If you have enough money you can move to a good public school district or pay for private school. If you are poor you must accept the monopoly school in your district - that is the rule. I myself enjoy having choices for myself and my children but that is a consequence of money. This is why I support school vouchers - let parents determine how to spend their money, and let schools compete for students.
- hintymad 6y ago
  Yeah, or like in other countries, teachers are subject to competition and can be replaced by better ones.
- BrianOnHN 6y ago
  Vouchers only tilt things in favor of private schools. The problem (US) is we've been steadily decreasing the relative cap on public school spending. If the spending wasn't so little, you'd probably be a lot more adamant about that voucher.

Bluestein 6y ago

> This isn’t some David vs Goliath moment. This is Goliath drinking champagne while David dances for his amusement. This is great. Sums it up.

rakkhi 6y ago
I know for him ironically making fun of soundbite memes like drain the swamp I thought it was a very well written article with some amazing quotable passages. Definately helps I agree with the contents though "Buying lottery tickets and trading manipulated crypto assets are both a tax on the poor and disenfranchised."

elihu 6y ago

> And so we see Gamestop story fall out of that. In a nutshell a bunch of retail investors (possibly with help from institutional insiders) decided to pump a small cap stock far beyond what the valuation of the company should be. The whole setup requires a significant number of people to buy and hold the asset at a price that makes no sense economically. And in doing so they have locked each other in a game of musical chairs in which they collectively have to pour more and more money into this unsustainable scheme in order to maintain the bubble. I think this completely misses the point. This isn't just a plain pump-and-dump scheme. Before /r/wallstreetbets got involved, the price of GameStop was being artificially held low by over-zealous shorts. So some investors figured out the shorts were in an untenable position and called their bluff. The extreme high prices are as far as I can tell just part of the process of the stock price returning to a regular equilibrium, whatever that is. Blaming WSB for a valuation that wasn't based in reality is a bit silly when it wasn't based in reality to begin with. Without the shorts, the stock couldn't have spiked as high as it did. And in the end, GameStop will survive a bit longer (or even thrive, if it can figure out a successful model), and the people it employs will continue to have jobs. I stopped reading the article when it turned into a rant against Bitcoin. I mean fine, you can criticize Bitcoin if you want but there's more to it than just people investing in currency speculation. If you don't think Bitcoin has any legitimate uses you're just not paying attention.

dman7 6y ago

I agree with how you've painted GameStop and Bitcoin as the nihilistic struggle against the establishment. However, I disagree with your conclusion. You make a pretty bold argument that underpins the whole conclusion so that's what I'll focus on: > Bitcoin doesn’t work, it’s a naked speculative bubble based on a technology that doesn’t scale can’t and can’t replace any existing financial service When you say Bitcoin doesn't work, what are you referring to? As a medium of exchange, you're correct: it doesn't work. But the narrative in crypto communities is that Bitcoin is becoming a store-of-value. Under that narrative, Bitcoin is "working": it's replacing gold as a store of value. We're seeing institutions expand their portfolios to include BTC. There are additional arguments for why Bitcoin may be a better hedge against inflation than gold or oil. Here is an interesting analysis by Winklevoss twins [1] There's more to cryptocurrency than Bitcoin. Today, there are over 4,000 crypto tokens out there and they're each solving various use cases with varying success. One particular thriving area is Decentralized Finance (DeFi) which creates decentralized exchanges, market makers, lenders/borrowers that aim to disrupt traditional (centralized) financial structures. As proof that there's something here, decentralized exchanges are taking market share from centralized ones - which are valued at $100B. Or consider the more visionary take on cryptocurrencies: decentralized computation networks that create economies for network participants. Centralized businesses must act in the interest of shareholders and are built to extract as much value from their product as possible. Decentralized computation networks, on the other hand, do not. They can (and are) constructed to be minimally extractive, taking only what is needed to reward network participants & secure the network. Thus, the value capture is distributed across all network participants, enabling new forms of humans organizing together to achieve a common goal. Check out [3] if you're interested in learning more. I hope this spurs your curiosity to dig into cryptocurrencies beyond just the surface. Thanks for writing the article! [1] https://winklevosscapital.com/the-case-for-500k-bitcoin/ https://winklevosscapital.com/the-case-for-500k-bitcoin/ [2] https://defipulse.com/ https://defipulse.com/ [3] https://smartcontentpublication.medium.com/the-purpose-and-value-of-cryptocurrency-and-tokens-4ad9db9fac7b https://smartcontentpublication.medium.com/the-purpose-and-v...

pcstl 6y ago

"Let’s state the uncomfortable truth. The future for many Americans is bleak and their lives are going to be nasty, brutish and short." I find it funny how first-worlders are horrified by the idea that they might have to live in mild discomfort. Maybe try looking at how most of the world that isn't the US and Western Europe lives before saying people's lives will be "nasty, brutish and short" because they won't be working some low-skill 9 to 5 for 40 to 50 years while making 6 figures and then retire with the rest of their lives pretty much planned out for them.

Qiu_Zhanxuan 6y ago
Is this sarcasm?
- pcstl 6y ago
  No, not really. More of a statement on how out of touch with reality it seems first world inhabitants are, to the point where they think not having a guaranteed well-paying job or not being as rich as their parents is comparable to the kind of life Hobbes was thinking of when he coined that idiom.
  - enraged_camel 6y ago
    Having your frame of reference defined by your own circumstances and the standards of the society you live in is not "out of touch." People in other parts of the world might have it worse — that is completely irrelevant when it comes to personal happiness.
    - pcstl 6y ago
      It is not irrelevant if you want to use an expression such as "nasty, brutish and short", coined by Hobbes to refer to the condition of man living by himself, without a social structure to support him. It implies that people in the first world - specifically, the US - are living in conditions somehow comparable in their uncertainty to people living in a pre-civilized state. If anyone is minimally realistic about the first world, they will know that it is an absurd statement. This kind of overly dramatic phrase is not accurate nor conducive to productive debate. Its only reason for existing is to make people indignant and unaware of their own privilege in order to make them support your cause of choice - or, more frequently, in order to make them fight the people who you designate as the "cause" of their "suffering". There's also a personal aspect to my comment, in that I live in a country where, even if the USA's living standard keeps falling for the next 50 years, it will probably be just about comparable to here. Watching the most privileged people in the world be all "woe is me, I might not be as rich as my dad!" is not something I'm very able to take seriously.

samirillian 6y ago

Socialism or barbarism! Socialism provides a "yes" to every "no" in this article. Authors critiques are good, but author too lapses into nihilism. Even cryptocurrency is not beyond rescue, it is only beyond rescue under a capitalist mode of production. Technology is the cause and effect, but we _do_ have agency.

h0nd 6y ago

>The last ten years have seen a massive redistribution of wealth from this age bracket into older demographics. This has very strongly increased during that year of pandemic. In my country a vast amount of money is spent on protecting old people that future generations will be liable for.

throwawaywoke 6y ago
Essentially, shutting down the economy (well, the poor person sectors only) was also a move to protect old people at the expense of young people. The COVID IFR rate increases sharply with age. If you don't see what's happening, then quite bluntly, you need to broaden your circles to familiarize yourself with people that aren't privileged enough to be able to continue working remotely.
- epinephrinios 6y ago
  The fruits of gerontocracy.
coolgeek 6y ago
> a massive redistribution of wealth from this age bracket into older demographics I'm not defending the current system/situation, but this seems to mischaracterize the article it links to. Wealth wasn't redistributed, because millenials (more generally, younger generations) didn't have it to begin with. What happened was that older generations were able to - and did - capture almost all of the surplus that was generated. I'm not saying that the author intentionally mischaracterized this. I'm saying that you can't solve a problem if you don't understand the nature of the problem. You can't solve a problem by focusing your efforts on a different problem (possibly the wrong problem, at least in this context).

toss1 6y ago

>>"Bitcoin serves as an emotional dual to the lottery. While in the lottery people pour their hope and money into the chance of life-changing winnings based on impossible odds." I'm reminded of an advert campaign slogan that New York State ran for it's lottery: "All you need is a dollar and a dream". Spot on. An astute friend's comment was: "We'll keep the dollar and you keep the dream". I've long agreed with the author that lotteries are an innumeracy tax. His insight that BTC is also largely the same is spot on.

smlckz 6y ago

Is it possible to make a cryptocurrency that does "real" work as its proof-of-work: work which is computationally intensive, but it solves some real life problems instead of "wasting" the energy?

kinghajj 6y ago
It is, yes. Curiously though, making the work "useful" might actually harm the security of a block chain and make it more likely to suffer a 51% attack. With a chain like Bitcoin's, if you want to perform a 51% attack, you would have to purchase a large amount of SHA-256 ASIC mining hardware. After the attack, public confidence would be shaken so severely that the market price would crash, and might never recover. So afterwards, the attacker is left with a pile of ASIC hardware that's nowhere near as valuable as before. If the PoW algorithm were based on something more "useful", then after a 51% attack, the attacker would have a large amount of hardware that they could easily repurpose, so it would retain a lot of its previous value. That makes the total cost of the attack much lower.
trevelyan 6y ago
Look into Saito Consensus: https://saito.io/saito-whitepaper.pdf https://saito.io/saito-whitepaper.pdf The network pays the nodes that run infrastructure rather than miners or stakers. Cost-of-attack is generated by the same nodes, so paying for infrastructure does not defund consensus. Security scales with fee-throughput of the network, while fee-throughput pays for scalability.

moralsupply 6y ago

> Bitcoin doesn’t work, it’s a naked speculative bubble based on a technology that doesn’t scale can’t and can’t replace any existing financial service Feel free to short Bitcoin in a futures market, and keep all your wealth allocated in assets associated with the US dollar. We'll talk again in 5 years time.

zanmat0 6y ago
Why are you replying to the author in here?
- moralsupply 6y ago
  It's called "rhetoric"
villasv 6y ago
Thankfully, I was never able to find an easy way to short BTC. I would have done it >5 years ago and failed spectacularly. I'm still bearish, but wiser.
- boring_twenties 6y ago
  You can short it on any crypto exchange that allows margin trading, such as Kraken.
  - akra 6y ago
    Would be extremely worried about counterparty risk though. The other guy has to pay up and I'm not sure of the controls/regulations around enforcing that?