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If you think of all investments as a bet, what are you betting on when you buy crypto? In my opinion, you're betting that crypto will be useful as an exchange

by smt88 6y ago

If you think of all investments as a bet, what are you betting on when you buy crypto? In my opinion, you're betting that crypto will be useful as an exchange of value, which means the people exchanging it are either: A) criminals or B) living in a failed state. Personally, if crypto becomes so widely used that it justifies its market caps, that means a lot of states have failed, and I don't want to live in (or bet on) that world. It's also scary that some very rich and powerful people are betting against our society continuing to be viable.

Synaesthesia 6y ago
Crypto right now is more like something people are speculating on, but it's like a collectible piece of art or something. It's cool as an idea, but that's about it. It's not going to become the currency of a failed state, there are far more power efficient and opaque ways of doing things. Basically states print money anyway, and just hand it to the banks.
- smt88 6y ago
  > It's not going to become the currency of a failed state, there are far more power efficient and opaque ways of doing things. It's already being used as a proxy for USD in some failed states (which is exactly what every stablecoin's value proposition would be). It's certainly not widespread, but it makes sense in a society where you don't actually need/want to convert to fiat to transact.
Applejinx 6y ago
Scary but plausible. I never assume that the richest and most powerful of people are also the most moral, ethical, or even viable. Seems to me it's more likely to go the other way, and that the richest and most powerful of people are that way because they're incredibly toxic and to them, even that is not nearly enough. To someone like that, the only question about bitcoin is 'can I gain something off this in some way no matter who or what it destroys in the process?' Sounds like a natural match to me, and so I'm unsurprised that some of the richest and most powerful people are all in on bitcoin. It's just that they have no intention of bitcoin, or society, ending up viable. They see a way to game it. Period.
jl2718 6y ago
Nobody does, but it’s a possibility, and we’re hoping that self-sovereign money makes for a more peaceful transition in those places. If it’s total chaos, the criminals will have total control. We have seen this many times. To see why people buy it, understand their fear of what might happen to them if they don’t.
- smt88 6y ago
  > To see why people buy it, understand their fear of what might happen to them if they don’t. Yes, I totally understand it. My opposition to crypto speculation is as follows: 1) Investments can be a self-fulfilling prophecy if extremely powerful/wealthy people are involved. If you bet on an outcome and also have the power to create it, can we really trust you not to do that? See also: Peter Thiel buying property in NZ to prepare for societal collapse, even as he worked for the previous presidential administration. 2) This one is just personal to me -- if crypto becomes an important alternative to USD fiat, the world has likely collapsed and I'll probably either be dead or ready to die. It's hard to overstate the consequences of the US collapsing, considering the enormous amount of military power that our country has.
  - BackBlast 6y ago
    > 2) This one is just personal to me -- if crypto becomes an important alternative to USD fiat, the world has likely collapsed and I'll probably either be dead or ready to die. This is pretty fatalistic. Life goes on, even through war and grief. Just because you don't like the contemplations doesn't make them unrealistic or un-navigable. Major power transitions are historically accompanied by world war, in such a war the electrical grid will be one of the first casualties. You can't use Crypto without a functional power grid. IMHO, Cryptocurrency isn't a good fit for this scenario. War is bad for cryptocurrency. > It's hard to overstate the consequences of the US collapsing, considering the enormous amount of military power that our country has. War has ever been unthinkable, yet it is historically common. The US military needs an incredible amount of high tech supplies and upkeep to sustain, it would not survive as-is in a significant downturn.
    - 6y ago
koonsolo 6y ago
First up, there is no worldwide currency. It would be nice in an internet world, to have a worldwide currency. Next, decentralization is awesome. You can always claim that any improvement is the proof of a failed earlier system. If the success of crypto means the system has failed, maybe you should blame the problem and not the solution.
- smt88 6y ago
  > First up, there is no worldwide currency. It would be nice in an internet world, to have a worldwide currency. Crypto is not a currency, especially if it's deflationary. It's an asset. Crypto is also not even close to useful worldwide, and it's hard to imagine why it would be come useful worldwide. USD works pretty well as a global currency at the moment. It has cheaper exchange fees than crypto. > Next, decentralization is awesome. Until a 51% attack takes all your money away, or your wallet gets hacked...
  - koonsolo 6y ago
    > It's an asset. Your US government policies don't apply to the rest of the world. Wikipedia defines it as currency. It's also in the name: cryptocurrency. > USD works pretty well as a global currency Lol
Valakas_ 6y ago
I'm betting that finally there is an asset that works as store of value that doesn't deflate and which is easy to use. Let's be honest, BTC could be the best one. Owning gold (or other rare metal) is an assle. Need a safe place to store it and transport it is so risky. Or I need to trust someone else or an institution to hold it if I don't want to hold it myself. Real estate takes a lot of time and research to chose a proper investment. Besides, what I want to store 100 dollars only? Or 10000? not enough for that. And REITs again require a lot of research and are not risk-free. Then you have other assets like art and so on, but again, needs research, and what are the likelyhood of findind something exactly at my price range? Besides they can be destroyed in fire or something else. Also not stocks sorry. I don't want to risk my hard earned money. Maybe part of it, i can, and I nicely get some positive return. But not all. Also not bonds or bank interest. I don't want to have my money stuck for years. I want something where I can easily set and forget, liquid, immaterial, which is safe, and where I don't need to trust anybody but myself. It doesn't even need to appreciate, just hold its value. What do you propose besides BTC? I don't see anything that can be potentially better.
- smt88 6y ago
  How is BTC a better store of value than real estate or gold? It literally has no intrinsic value, unlike real estate or gold. Stocks are also technically valuable because they are a share of a real company and that company's profits.
  - tomputer 6y ago
    These are also a store of value / investments but Bitcoin is different. As far as I know, I can not buy small parts of real estate. Gold supply is not fixed and it’s hard to validate. Companies can go bankrupt. I can not transfer real estate, gold or stocks over the internet to someone else directly, without using a third party.
    - smt88 6y ago
      > As far as I know, I can not buy small parts of real estate. Of course you can[1]. > Gold supply is not fixed and it’s hard to validate. Gold supply is more difficult to shock than crypto supply. > Companies can go bankrupt. Yes they can, but that doesn't mean you lose your stake in them. Large, public companies go bankrupt very slowly anyway. You usually have years of warning. > I can not transfer real estate, gold or stocks over the internet to someone else directly, without using a third party. How many people self-host their wallet? Very, very few. Also, you can absolutely buy stocks without an intermediary[2]. I don't see why you'd want to, though. 1. https://www.investopedia.com/top-reits-4582128 https://www.investopedia.com/top-reits-4582128 2. https://www.investor.gov/introduction-investing/investing-basics/glossary/direct-investment-plans-buying-stock-directly https://www.investor.gov/introduction-investing/investing-ba...
cromulent 6y ago
In my somewhat limited circle, most people that I know are buying it as its price is rising. They are betting they can sell it for more than they paid. Only a few actually use it as a currency. https://en.wikipedia.org/wiki/Greater_fool_theory https://en.wikipedia.org/wiki/Greater_fool_theory
- smt88 6y ago
  Totally agree. What I was saying was theoretical: just as the value of a stock is a dividend (which some stocks will never give out to investors!), the value of crypto is its future liquidity. Those are both theoretical, of course. Most trading activity of those assets will be from speculation (assuming they'll find a "greater fool") and not a fundamental belief in the currency or in the dividend.

by smt88 6y ago

Synaesthesia 6y ago

Crypto right now is more like something people are speculating on, but it's like a collectible piece of art or something. It's cool as an idea, but that's about it. It's not going to become the currency of a failed state, there are far more power efficient and opaque ways of doing things. Basically states print money anyway, and just hand it to the banks.

smt88 6y ago
> It's not going to become the currency of a failed state, there are far more power efficient and opaque ways of doing things. It's already being used as a proxy for USD in some failed states (which is exactly what every stablecoin's value proposition would be). It's certainly not widespread, but it makes sense in a society where you don't actually need/want to convert to fiat to transact.

Applejinx 6y ago

Scary but plausible. I never assume that the richest and most powerful of people are also the most moral, ethical, or even viable. Seems to me it's more likely to go the other way, and that the richest and most powerful of people are that way because they're incredibly toxic and to them, even that is not nearly enough. To someone like that, the only question about bitcoin is 'can I gain something off this in some way no matter who or what it destroys in the process?' Sounds like a natural match to me, and so I'm unsurprised that some of the richest and most powerful people are all in on bitcoin. It's just that they have no intention of bitcoin, or society, ending up viable. They see a way to game it. Period.

jl2718 6y ago

Nobody does, but it’s a possibility, and we’re hoping that self-sovereign money makes for a more peaceful transition in those places. If it’s total chaos, the criminals will have total control. We have seen this many times. To see why people buy it, understand their fear of what might happen to them if they don’t.

smt88 6y ago
> To see why people buy it, understand their fear of what might happen to them if they don’t. Yes, I totally understand it. My opposition to crypto speculation is as follows: 1) Investments can be a self-fulfilling prophecy if extremely powerful/wealthy people are involved. If you bet on an outcome and also have the power to create it, can we really trust you not to do that? See also: Peter Thiel buying property in NZ to prepare for societal collapse, even as he worked for the previous presidential administration. 2) This one is just personal to me -- if crypto becomes an important alternative to USD fiat, the world has likely collapsed and I'll probably either be dead or ready to die. It's hard to overstate the consequences of the US collapsing, considering the enormous amount of military power that our country has.
- BackBlast 6y ago
  > 2) This one is just personal to me -- if crypto becomes an important alternative to USD fiat, the world has likely collapsed and I'll probably either be dead or ready to die. This is pretty fatalistic. Life goes on, even through war and grief. Just because you don't like the contemplations doesn't make them unrealistic or un-navigable. Major power transitions are historically accompanied by world war, in such a war the electrical grid will be one of the first casualties. You can't use Crypto without a functional power grid. IMHO, Cryptocurrency isn't a good fit for this scenario. War is bad for cryptocurrency. > It's hard to overstate the consequences of the US collapsing, considering the enormous amount of military power that our country has. War has ever been unthinkable, yet it is historically common. The US military needs an incredible amount of high tech supplies and upkeep to sustain, it would not survive as-is in a significant downturn.
  - 6y ago

koonsolo 6y ago

First up, there is no worldwide currency. It would be nice in an internet world, to have a worldwide currency. Next, decentralization is awesome. You can always claim that any improvement is the proof of a failed earlier system. If the success of crypto means the system has failed, maybe you should blame the problem and not the solution.

smt88 6y ago
> First up, there is no worldwide currency. It would be nice in an internet world, to have a worldwide currency. Crypto is not a currency, especially if it's deflationary. It's an asset. Crypto is also not even close to useful worldwide, and it's hard to imagine why it would be come useful worldwide. USD works pretty well as a global currency at the moment. It has cheaper exchange fees than crypto. > Next, decentralization is awesome. Until a 51% attack takes all your money away, or your wallet gets hacked...
- koonsolo 6y ago
  > It's an asset. Your US government policies don't apply to the rest of the world. Wikipedia defines it as currency. It's also in the name: cryptocurrency. > USD works pretty well as a global currency Lol

Valakas_ 6y ago

I'm betting that finally there is an asset that works as store of value that doesn't deflate and which is easy to use. Let's be honest, BTC could be the best one. Owning gold (or other rare metal) is an assle. Need a safe place to store it and transport it is so risky. Or I need to trust someone else or an institution to hold it if I don't want to hold it myself. Real estate takes a lot of time and research to chose a proper investment. Besides, what I want to store 100 dollars only? Or 10000? not enough for that. And REITs again require a lot of research and are not risk-free. Then you have other assets like art and so on, but again, needs research, and what are the likelyhood of findind something exactly at my price range? Besides they can be destroyed in fire or something else. Also not stocks sorry. I don't want to risk my hard earned money. Maybe part of it, i can, and I nicely get some positive return. But not all. Also not bonds or bank interest. I don't want to have my money stuck for years. I want something where I can easily set and forget, liquid, immaterial, which is safe, and where I don't need to trust anybody but myself. It doesn't even need to appreciate, just hold its value. What do you propose besides BTC? I don't see anything that can be potentially better.

smt88 6y ago
How is BTC a better store of value than real estate or gold? It literally has no intrinsic value, unlike real estate or gold. Stocks are also technically valuable because they are a share of a real company and that company's profits.
- tomputer 6y ago
  These are also a store of value / investments but Bitcoin is different. As far as I know, I can not buy small parts of real estate. Gold supply is not fixed and it’s hard to validate. Companies can go bankrupt. I can not transfer real estate, gold or stocks over the internet to someone else directly, without using a third party.
  - smt88 6y ago
    > As far as I know, I can not buy small parts of real estate. Of course you can[1]. > Gold supply is not fixed and it’s hard to validate. Gold supply is more difficult to shock than crypto supply. > Companies can go bankrupt. Yes they can, but that doesn't mean you lose your stake in them. Large, public companies go bankrupt very slowly anyway. You usually have years of warning. > I can not transfer real estate, gold or stocks over the internet to someone else directly, without using a third party. How many people self-host their wallet? Very, very few. Also, you can absolutely buy stocks without an intermediary[2]. I don't see why you'd want to, though. 1. https://www.investopedia.com/top-reits-4582128 https://www.investopedia.com/top-reits-4582128 2. https://www.investor.gov/introduction-investing/investing-basics/glossary/direct-investment-plans-buying-stock-directly https://www.investor.gov/introduction-investing/investing-ba...

cromulent 6y ago

In my somewhat limited circle, most people that I know are buying it as its price is rising. They are betting they can sell it for more than they paid. Only a few actually use it as a currency. https://en.wikipedia.org/wiki/Greater_fool_theory https://en.wikipedia.org/wiki/Greater_fool_theory

smt88 6y ago
Totally agree. What I was saying was theoretical: just as the value of a stock is a dividend (which some stocks will never give out to investors!), the value of crypto is its future liquidity. Those are both theoretical, of course. Most trading activity of those assets will be from speculation (assuming they'll find a "greater fool") and not a fundamental belief in the currency or in the dividend.