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The situation is fundamentally different compared to fiat currencies. A moderate rate of inflation like we have in advanced economies means that all nominal pr

by lottin 6y ago

The situation is fundamentally different compared to fiat currencies. A moderate rate of inflation like we have in advanced economies means that all nominal prices adjust gradually upwards, and this includes salaries. Therefore, for most people, their purchasing power is largely unaffected.

betwixthewires 6y ago
Thats not a fundamental difference with regard to whether this is a pyramid scheme (or a ponzi scheme) or not. The US dollar will be valueless one day. Maybe that day is when the sun burns out. Maybe that day is next week. Regardless, someone is left holding the bag. This is the definition of either of these schemes. Cryptocurrencies are no different from fiat currencies in this regard, though they may be different in terms of technical details, like emission schedule.
- lottin 6y ago
  All investments will be worthless at some point in the future, but that's not what a pyramid scheme is. A pyramid scheme is an investment scheme where the revenue streams come from the investors themselves.
  - betwixthewires 6y ago
    Yeah, but isn't that how the dollar works? Or any asset who's valuation is based on demand? We may not give money for dollars, we give work and production for it, but that's what real value is.
    - lottin 5y ago
      The return on an asset is the selling price plus any income received during the holding period minus the purchase price. A dollar provides no income and its selling and purchase price are the same in nominal terms, which means it provides a return of zero in nominal terms. In real terms, the return is minus the inflation rate, which usually is a negative number. So clearly the dollar doesn't rely on revenues from current investors to provide a return to earlier investors... because it provides no such return. Therefore I don't see how it might qualify as a pyramid scheme.
      - lowkey 5y ago
        You are forgetting that the FED can and has printed enormous sums of dollars for example over the last 18 months. This dilutes the real-world purchasing power of the dollar leading to increased inflation in scarce assets such as real estate, equities, and some cryptocurrencies. Wages are rising at the advertised inflation rate or a little better while all the scarce assets you would need to obtain healthcare, higher education, housing or retirement are all increasing at a rate that puts wage earners further and further behind.
        lottin 5y ago
        This is a series of made up facts. Real wages have increased over the last 10 years in the US [1] despite the fact that the money supply has increased substantially over the same period. [1] https://www.weforum.org/agenda/2019/04/50-years-of-us-wages-in-one-chart/ https://www.weforum.org/agenda/2019/04/50-years-of-us-wages-...
        lowkey 5y ago
        Which of my facts are made up? Real wages have fallen for the past 50 years. The fact that they may have made up some ground recently doesn't change the fact that wage growth is falling behind asset price growth and the problem is only getting worse. Also, you are measuring wage growth vs consumer price infation so ~2%. The article talks about asset price inflation which depending on how you measure it is closer to 15%.
        lottin 5y ago
        > Which of my facts are made up? All of them. You said wages were "falling behind" and I showed that was not the case. Now you say wages are "falling behind asset price growth" which is a meaningless statement because there will always be some asset prices that have increased more that wages have, just like there will always be some asset prices that have increased less than wages.
        5y ago

by lottin 6y ago

betwixthewires 6y ago

Thats not a fundamental difference with regard to whether this is a pyramid scheme (or a ponzi scheme) or not. The US dollar will be valueless one day. Maybe that day is when the sun burns out. Maybe that day is next week. Regardless, someone is left holding the bag. This is the definition of either of these schemes. Cryptocurrencies are no different from fiat currencies in this regard, though they may be different in terms of technical details, like emission schedule.

lottin 6y ago
All investments will be worthless at some point in the future, but that's not what a pyramid scheme is. A pyramid scheme is an investment scheme where the revenue streams come from the investors themselves.
- betwixthewires 6y ago
  Yeah, but isn't that how the dollar works? Or any asset who's valuation is based on demand? We may not give money for dollars, we give work and production for it, but that's what real value is.
  - lottin 5y ago
    The return on an asset is the selling price plus any income received during the holding period minus the purchase price. A dollar provides no income and its selling and purchase price are the same in nominal terms, which means it provides a return of zero in nominal terms. In real terms, the return is minus the inflation rate, which usually is a negative number. So clearly the dollar doesn't rely on revenues from current investors to provide a return to earlier investors... because it provides no such return. Therefore I don't see how it might qualify as a pyramid scheme.
    - lowkey 5y ago
      You are forgetting that the FED can and has printed enormous sums of dollars for example over the last 18 months. This dilutes the real-world purchasing power of the dollar leading to increased inflation in scarce assets such as real estate, equities, and some cryptocurrencies. Wages are rising at the advertised inflation rate or a little better while all the scarce assets you would need to obtain healthcare, higher education, housing or retirement are all increasing at a rate that puts wage earners further and further behind.
      - lottin 5y ago
        This is a series of made up facts. Real wages have increased over the last 10 years in the US [1] despite the fact that the money supply has increased substantially over the same period. [1] https://www.weforum.org/agenda/2019/04/50-years-of-us-wages-in-one-chart/ https://www.weforum.org/agenda/2019/04/50-years-of-us-wages-...
        lowkey 5y ago
        Which of my facts are made up? Real wages have fallen for the past 50 years. The fact that they may have made up some ground recently doesn't change the fact that wage growth is falling behind asset price growth and the problem is only getting worse. Also, you are measuring wage growth vs consumer price infation so ~2%. The article talks about asset price inflation which depending on how you measure it is closer to 15%.
        lottin 5y ago
        > Which of my facts are made up? All of them. You said wages were "falling behind" and I showed that was not the case. Now you say wages are "falling behind asset price growth" which is a meaningless statement because there will always be some asset prices that have increased more that wages have, just like there will always be some asset prices that have increased less than wages.
        5y ago