15 ms·

What the Crypto Crowd Doesn’t Understand About Economics

42 points by matthewsinclair 5y ago

B4CKlash 5y ago
Is there a workaround for this paywall?
- Miner49er 5y ago
  Disable javascript.
- arberx 5y ago
  Pay for a subscription. Good luck getting unbiased non-clickbait news when journalists only source of revenue is directly tied to advertisment in an article.
  - B4CKlash 5y ago
    Paywalls with workarounds are the only type of paywalls allowed on HN. Asking for a workaround is an acceptable practice. https://hn.algolia.com/?query=paywalls%20by:dang&dateRange=all&page=0&prefix=false&sort=byDate&type=comment https://hn.algolia.com/?query=paywalls%20by:dang&dateRange=a...
    - arberx 5y ago
      Cool-doesn't mean it's right.
      - B4CKlash 5y ago
        You realize Tyler Cowen posted three quarters of this piece on his website: https://marginalrevolution.com/marginalrevolution/2021/06/what-crypto-people-get-wrong.html https://marginalrevolution.com/marginalrevolution/2021/06/wh... I will happily pay for quality content - Bloomberg is not one of those sources. You're defending a company that will happily use it's monopolistic edge to charge 24,000 a year for an API. Get off your high horse.
        walltowall 5y ago
        You're still increasing demand by reading the article, posting links to it, discussing it, upvoting the post, etc. Don't consume and promote the content. You don't want to compromise the ethical stance you've taken against their monopoly do you?!
    - walltowall 5y ago
      Featuring one of dang's most nuanced arguments > Yes, this sucks, but the loss of many substantive articles would suck worse. Yes, me using open-source code without the author's permission, license, or attribution sucks, but the loss of the software I make with it would "suck worse." So I'm using your code for free, you put it on the internet anyway silly!
  - madsbuch 5y ago
    I would be super interested in truly unbiased news and I am willing to pay quite a fortune for it -- through I am quite sure it wouldn't, philosophically, be possible to find.
  - beervirus 5y ago
    Good luck getting unbiased news at any price.
- marcus_holmes 5y ago
  I just spent a couple of minutes in dev tools deleting about 50 script, iframe and div tags that didn't contain the actual text. Then remove the "overflow:hidden" css style on the top div. Utterly miserable waste of everyone's bandwidth. But that's media for you...
  - deleted 5y ago
    [deleted]
  - lamestream 5y ago
    Right?! They seem desperate for income, I can't figure out why. Oh here's a link to skip paying them for a subscription btw.
    - marcus_holmes 5y ago
      It's not the business model I object to. Though they'll probably need to do something different to actually make it work: you can't write clickbaity shite that optimises for ad revenue and then expect people to pay for it. It's the horrible inefficiency and ineffectiveness of their markup that I object to. Megabytes of script and tags that achieves nothing except using up bandwidth and cpu cycles. Why are there 3 iframes (iirc) in there? Why are there so many script tags? Can't they use a packer? It's all so badly done.
      - lamestream 5y ago
        Yeah, why optimize for ad revenue when they have a paywall?! Sounds like you went through a lot of work to read that "clickbaity shite." It's not worth paying for, surely it's not worth the time you spent doing that?
        marcus_holmes 5y ago
        I used to run a newspaper. The business model question is very hard. There's basically a choice: You can write clickbaity ad-revenue-optimised shite, which draws people in, gets them to open the article (and get served the ads). But once they've done that then there's no point in getting them engaged further - from a business point of view there's nothing gained by getting them to read stuff once the ads have been served. So you target the journos for 5 articles a day, minimum, knowing that that's not enough time for them to write decent articles, and get your editors to make the headers clickbaity. Job done. Except ad revenue is declining year-on-year and you're trashing your reputation for journalism. Or you can do "proper" journalism, which involves paying journalists for good articles, investigative journalism, Pulitzer prize stuff. It costs a fortune. It's not worth doing for ad revenue because the clickbaity stuff actually earns more money. But it does increase your reputation. And if you get your reputation high enough, people will start paying to access the stuff you're writing. At least that's the theory. No-one (as far as I'm aware) has actually made a profit from either model since about 2000. The Guardian has done very well out of the Wikipedia model, but all the opinions I hear is that that's probably not sustainable, and is anyway very specific to them because they cater to a niche that is very politically aware and fairly well-off. i.e. they have money to spare to support the Grauniad, and identify with its political stance. So, yes, optimising for ad revenue when you have a paywall is stupid - people who are drawn there by the clickbait header won't pay the paywall. And people who have paid for the paywall will be annoyed if the article is optimised for clickbait (ad-revenue). I hope that makes sense? Let me know if not and I can explain it again. I'm a geek, I enjoy messing with this stuff. The enjoyment of the technical challenge of "hacking" their paywall was more than worth the time it took. The article was probably not. Not sure I'd do it again.
- brodouevencode 5y ago
  Incognito mode works most times.
- xaduha 5y ago
  Use a browser with a "stop loading" button and press it before overlay obscures the page. Esc works too. I guess it helps if your internet isn't blazing fast, it depends on the site and needs a bit of practice, but on this one it works just fine.
- Syzygies 5y ago
  I recently switched to the Brave browser, and had no issues reading the article. It would nevertheless be wonderful if HN readers could manage whitelists or blacklists related to paywalls, so by choice we could never see posts for content we can't read. Publishers shouldn't get the publicity for articles they won't share.
greyface- 5y ago
https://archive.is/79AXn https://archive.is/79AXn
jMyles 5y ago
Given the somewhat clickbaity headline, this piece is straight to the point and surprisingly sober. I found this to be the central thesis: > If anything, crypto is more likely to hurt the currencies of countries that are doing very poorly, such as Venezuela. Fiat currency won’t just go away, so over the long run crypto could actually boost the value of the dollar by stifling the rise of potential competitors. ...and the author is absolutely correct: much of the crypto crowd, whether or not they understand this, seems wont to ignore it. I view blockchain tech - and even crypto assets - as a wonderful, peaceful, transformative technology in the long-term. But I also think that the need for calm analysis, thinking about much, much longer timeframes, is sorely needed in the 'crypto crowd' today. > A second point, oft neglected in the crypto community, is that crypto prices won’t continue to go up forever at high rates. It doesn’t matter whether money supply deflation is built into a crypto system, or that new and valuable uses will be discovered each year. Here I again I agree, but I do want to add something important: New and valuable uses are very important right now. I work at NuCypher, and we are very proud of having deployed proxy re-encryption as an access management tool. But nobody is using it, for two reasons: 1) gas prices, 2) there are no other "new and valuable uses" which make access management worthwhile at the moment. Whether or not you see a rich future for blockchain tech, I hope we can all agree that solid uses - especially those which advantage groups marginalized by yesterday's internet - are the real driver of the eventual equilibrium the author describes here.
- mech422 5y ago
  Anyone who thinks crypto prices will continue to rise forever is not 'the crypto crowd'. 'The crypto crowd' has seen bitcoin go up and down countless times. The problem is, everyone seems to equate noobs getting suckered by Musk with the 'crypto crowd'. I feel bad for them, but it's like saying /r/wallstreetbets are 'investors'. P.S. - And where do they keep getting this 'fiat is going away' bull from? I honestly don't know anyone in crypto that thinks this? Yes, I see crap on youtube pumping stuff like this - is that now what the bar is? "I saw it on youtube" ?
  - UIGYUIUYG 5y ago
    >is that now what the bar is? "I saw it on youtube" ? In todays society? Sadly, yes.
runbathtime 5y ago
Most people in crypto do not understand anything about economics. They understand ponzi/ greater fool theory and how to obfuscate to the public and regulators to pull the wool over someone's eyes.
- arberx 5y ago
  Most people do not understand anything about economics-in fact most economics is a work in progress.
  - TheFreim 5y ago
    I'd go farther and take the Taleb route that NOBODY understands economics due to its random nature.
    - walkedaway 5y ago
      Thomas Sowell seems to have a solid grasp on economics. Too bad people don't study his work. Maybe if he wasn't black people in the US would listen to him.
      - bun_at_work 5y ago
        This is an outrageous statement. Thomas Sowell is a widely cited and studied economist. Many people study his work (including myself!). What does his being black have to do with anything? There is no group of people ignoring him for being black. In fact, the contemporary politics would suggest that, since he's black, he'd be democrat, but his economics are very libertarian, a group more associated with racists. So what are you on about? People don't "listen" to him because he's incredibly biased towards free-market economics, not because his skin color.
      - TheFreim 5y ago
        I don't understand what you mean, Sowell is very well regarded here in the United States in a variety of political environments.
      - 5y ago
johnklos 5y ago
This is about cryptocurrency, NOT crypto. The article name, at least, should have "sic" to indicate that it's a copy of something which is incorrect.
- haste410 5y ago
  Crypto has become a shorthand for cryptocurrency. Google "crypto" and see what comes up.
  - ape4 5y ago
    Yeah sadly, it bugs me too. Also when somebody says "turn on the air" they probably are referring to air conditioning.
- xyzzyz 5y ago
  You are fighting a war for good cause, but this war has already been lost. Crypto means crypto currencies at this point, whether you want it or not.
- brujoand 5y ago
  Times (and words) are changing
- OskarS 5y ago
  It's standard usage at this point, adding a [sic] would not be correct. You should climb down from this hill.
- deleted 5y ago
  [deleted]
  - deleted 5y ago
    [deleted]
- ska 5y ago
  For what it is worth “[sic]” does not mean that something is incorrect, just indicates it is a direct copy of another source. Could be an error or typo, could just be idiosyncratic, archaic, or potentially confusing. In your case it would not be appropriate, because like it or not the quote usage has become normal usage. I understand why that annoys people, but it’s done.
sna1l 5y ago
It is sad that the biggest influencers in crypto are like Pomp + Ran Neuner who constantly say shit like the "dollar is collapsing." You go be pro cryptocurrency and still hate cryptocurrency
koheripbal 5y ago
The fact that having a deflationary money supply is bad, is even debated in cryptocurrency forums is the clearest indication that they have no idea how economics works. ...also, the point of a currency is to act as a STABLE unit of exchange, not some speculative moon-shot. Once these money supply and stability issues are ironed out, and once the scalability problem is solved, I think we might really have something.
- JumpCrisscross 5y ago
  > the point of a currency is to act as a STABLE unit of exchange Very few informed observers seriously expect crypto to become a general-use currency. That's a role it detached from years ago, first in practice and then in rhetoric. The closest analog to what crypto seems to want to become in our financial markets is in risk-free assets. Universal collateral. This used to be gold. Now it's Treasuries and Bunds. None of those markets are terrifically efficient or universalized. And neither requires long-term price stability; just predictability. (Note: it does not follow that crypto will be as valuable as e.g. the Treasury market. Treasuries serve as a safe asset. They also finance the U.S. government. Figuring out the worth of the former detached from the latter is difficult.)
  - danaris 5y ago
    It may not be what informed observers want it to be, but it's still what every single person I've seen trumpeting the virtues of cryptocurrency here on HN has been shooting for. The argument is invariably "the value of cryptocurrency is giving us a currency that's not controlled by central banks". Never have I seen someone saying cryptocurrency should be used because it's highly volatile and great for speculating. So there seems to be a significant divide between the people who use cryptocurrency (but don't attach a moral value to it) and the people who believe in cryptocurrency (but ignore what it's actually used for).
  - nradov 5y ago
    The closest analog to what crypto seems to want to become in our financial markets is cash hidden in a briefcase. The value is primarily in evading currency controls for smuggling wealth out of China and other authoritarian states.
tfehring 5y ago
I still don't see how you get to a cryptocurrency that's broadly useful as a currency without enough price stability for it to be a unit of account in some sense. Tesla may have accepted BTC for payment, and it might do so again, but is it really going to commit to pricing its next model at (say) 1 BTC and just let the dollar-denominated price swing wildly? Probably not - its competitors price in dollars, so if BTC goes up it would become less attractive, and its suppliers price in dollars and other fiat currencies, so if BTC goes down its marginal revenue could fall below its marginal cost. On top of that, BTC-denominated debt is potentially toxic for the holder. Imagine if you bought a house for, say, 1000 BTC in 2016 and your mortgage was denominated in BTC. Gradual devaluation of debt is one reason that central bank inflation targets in developed countries tend to be small positive numbers. Monetary policy is hard, and despite (totally valid) criticisms of central banks' monetary policy decisions in recent years, I'm still skeptical that anyone can do it purely algorithmically and have better results than the Fed. I still think Libra was the only token (besides explicitly fiat-denominated stablecoins) I've seen that had a real shot at being broadly used as a currency, though I'm glad that FB won't be the ones to "own" a global currency. The "problem" is that any token that's stable enough to use as a currency is inherently too stable to have potential for large speculative gains (except if you lever it to the hilt as FX traders do today) - and IMO demand in the crypto space is still predominantly driven by speculative potential.
- martin1975 5y ago
  Doing a stablecoin to replace something like the USD is an extremely difficult problem. Reserve.org is one company which understands the gravity of the issue and is committed to producing a stablecoin for anyone, worthy enough to replace the USD.
  - tfehring 5y ago
    At a glance it looks like that's materially the same mechanism that was used by IRON [0], which blew up last week after they had to mint too many of the stabilizing tokens to try to retain the USD peg. Am I missing something? [0] https://docs.iron.finance https://docs.iron.finance
  - 5y ago
sadfasf122 5y ago
lol here comes the FUD
jonstaab 5y ago
Both things are well understood by the bitcoin community, at least. Bitcoin's utility doesn't depend solely on inflation or replacing the dollar as the global reserve currency, though that's a popular topic, since the collapse of the dollar would prove Bitcoin's place. For the second point, HODLing seems like it's forever, but it's only for the next decade or two; the expected growth comes from getting in early - just like if you bought an Warhol painting while he was still active. So I agree, but the author of the article is using these arguments to strawman the crypto community, which is full of really smart people as well as idiots.
reidjs 5y ago
One thing I like about crypto is you can simulate economics experiments with funny money online. Ponzi Scheme? There are plenty of these going on. Want to investigate Harberger's triangle/deadweight tax loss? Create a small game. Prediction markets? See auger. As long as you approach it from the perspective of 'this money is probably worthless' it's all just a fun learning experience about economic theory. The only problem is some people "invest" more than they are comfortable losing. And that causes some tragedy.
Syzygies 5y ago
I'm an author cited by the original bitcoin paper. I considered becoming an economist rather than a mathematician. Cryptocurrencies are a carbon-load environmental crime. Figuring a way around this is the major unsolved problem in the field. Are you a vegetarian in the crypto-crowd? You'd be doing the planet a favor to start eating meat and abandoning cryptocurrencies. National currencies used to be backed by gold; now they're backed by the nation's resolve to support the currency. Cryptocurrencies are not Ponzi schemes; they can stabilize, while Ponzi schemes collapse. Cryptocurrencies however are backed entirely by convention. One could argue that nations are conventions, but they are bound together by a constellation of motives beyond their currency. Cryptocurrencies are isolated conventions. That is their appeal and their vulnerability. We are a cripplingly conventional species. Our ability to organize allowed us to scale past the Neanderthals. However, many of us don't trust convention enough to trust cryptocurrencies.
- DethNinja 5y ago
  So what you are saying is we should move to communism and let members of federal reserve control people like slaves by printing money and handing it to their buddies? How come as a business owner I never received a dime of those printed out money? Entire economy is a huge scam just to let richest people live like kings at the expense of billions of humans. At least bitcoin is a good alternative against institutional corruption going on at the highest levels of the government.
  - amanaplanacanal 5y ago
    Not sure how it’s different. In both cases, the people who make the currency and their friends get rich, and the average Joe gets nothing.
  - dang 5y ago
    Please don't take HN threads into ideological flamewar. It makes discussions more predictable and nastier, and we're trying for the opposites here. If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and taking the intended spirit of the site more to heart, we'd be grateful. Note these ones: "Please don't use Hacker News for political or ideological battle. It tramples curiosity." "Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith."
black6 5y ago
> A second point, oft neglected in the crypto community, is that crypto prices won’t continue to go up forever at high rates. The True Believers expect and want this to happen. It has to level out to be a currency. Cryptocurrency is useless as a currency with the current volatility as a result of ignorant and rank speculation.
endisneigh 5y ago
The problem with cryptocurrencies is very simple. At some point X-COIN will reach a maximum price, $MAX. Why would anyone buy X-COIN at $MAX? By definition it will lose you money. You can repeat this argument with any amount, because ultimately you're just going to subject someone else to the same situation. Regress this to its logical extreme and you see there's no point of buying it at all, unless crypto itself has some meaningful value beyond its converted price to fiat. That itself has yet to be proven.
- shawnb576 5y ago
  Isn't this just the Greater Fool Theory [1] [1] https://www.investopedia.com/terms/g/greaterfooltheory.asp https://www.investopedia.com/terms/g/greaterfooltheory.asp

B4CKlash 5y ago

Is there a workaround for this paywall?

Miner49er 5y ago
Disable javascript.
arberx 5y ago
Pay for a subscription. Good luck getting unbiased non-clickbait news when journalists only source of revenue is directly tied to advertisment in an article.
- B4CKlash 5y ago
  Paywalls with workarounds are the only type of paywalls allowed on HN. Asking for a workaround is an acceptable practice. https://hn.algolia.com/?query=paywalls%20by:dang&dateRange=all&page=0&prefix=false&sort=byDate&type=comment https://hn.algolia.com/?query=paywalls%20by:dang&dateRange=a...
  - arberx 5y ago
    Cool-doesn't mean it's right.
    - B4CKlash 5y ago
      You realize Tyler Cowen posted three quarters of this piece on his website: https://marginalrevolution.com/marginalrevolution/2021/06/what-crypto-people-get-wrong.html https://marginalrevolution.com/marginalrevolution/2021/06/wh... I will happily pay for quality content - Bloomberg is not one of those sources. You're defending a company that will happily use it's monopolistic edge to charge 24,000 a year for an API. Get off your high horse.
      - walltowall 5y ago
        You're still increasing demand by reading the article, posting links to it, discussing it, upvoting the post, etc. Don't consume and promote the content. You don't want to compromise the ethical stance you've taken against their monopoly do you?!
  - walltowall 5y ago
    Featuring one of dang's most nuanced arguments > Yes, this sucks, but the loss of many substantive articles would suck worse. Yes, me using open-source code without the author's permission, license, or attribution sucks, but the loss of the software I make with it would "suck worse." So I'm using your code for free, you put it on the internet anyway silly!
- madsbuch 5y ago
  I would be super interested in truly unbiased news and I am willing to pay quite a fortune for it -- through I am quite sure it wouldn't, philosophically, be possible to find.
- beervirus 5y ago
  Good luck getting unbiased news at any price.
marcus_holmes 5y ago
I just spent a couple of minutes in dev tools deleting about 50 script, iframe and div tags that didn't contain the actual text. Then remove the "overflow:hidden" css style on the top div. Utterly miserable waste of everyone's bandwidth. But that's media for you...
- deleted 5y ago
  [deleted]
- lamestream 5y ago
  Right?! They seem desperate for income, I can't figure out why. Oh here's a link to skip paying them for a subscription btw.
  - marcus_holmes 5y ago
    It's not the business model I object to. Though they'll probably need to do something different to actually make it work: you can't write clickbaity shite that optimises for ad revenue and then expect people to pay for it. It's the horrible inefficiency and ineffectiveness of their markup that I object to. Megabytes of script and tags that achieves nothing except using up bandwidth and cpu cycles. Why are there 3 iframes (iirc) in there? Why are there so many script tags? Can't they use a packer? It's all so badly done.
    - lamestream 5y ago
      Yeah, why optimize for ad revenue when they have a paywall?! Sounds like you went through a lot of work to read that "clickbaity shite." It's not worth paying for, surely it's not worth the time you spent doing that?
      - marcus_holmes 5y ago
        I used to run a newspaper. The business model question is very hard. There's basically a choice: You can write clickbaity ad-revenue-optimised shite, which draws people in, gets them to open the article (and get served the ads). But once they've done that then there's no point in getting them engaged further - from a business point of view there's nothing gained by getting them to read stuff once the ads have been served. So you target the journos for 5 articles a day, minimum, knowing that that's not enough time for them to write decent articles, and get your editors to make the headers clickbaity. Job done. Except ad revenue is declining year-on-year and you're trashing your reputation for journalism. Or you can do "proper" journalism, which involves paying journalists for good articles, investigative journalism, Pulitzer prize stuff. It costs a fortune. It's not worth doing for ad revenue because the clickbaity stuff actually earns more money. But it does increase your reputation. And if you get your reputation high enough, people will start paying to access the stuff you're writing. At least that's the theory. No-one (as far as I'm aware) has actually made a profit from either model since about 2000. The Guardian has done very well out of the Wikipedia model, but all the opinions I hear is that that's probably not sustainable, and is anyway very specific to them because they cater to a niche that is very politically aware and fairly well-off. i.e. they have money to spare to support the Grauniad, and identify with its political stance. So, yes, optimising for ad revenue when you have a paywall is stupid - people who are drawn there by the clickbait header won't pay the paywall. And people who have paid for the paywall will be annoyed if the article is optimised for clickbait (ad-revenue). I hope that makes sense? Let me know if not and I can explain it again. I'm a geek, I enjoy messing with this stuff. The enjoyment of the technical challenge of "hacking" their paywall was more than worth the time it took. The article was probably not. Not sure I'd do it again.
brodouevencode 5y ago
Incognito mode works most times.
xaduha 5y ago
Use a browser with a "stop loading" button and press it before overlay obscures the page. Esc works too. I guess it helps if your internet isn't blazing fast, it depends on the site and needs a bit of practice, but on this one it works just fine.
Syzygies 5y ago
I recently switched to the Brave browser, and had no issues reading the article. It would nevertheless be wonderful if HN readers could manage whitelists or blacklists related to paywalls, so by choice we could never see posts for content we can't read. Publishers shouldn't get the publicity for articles they won't share.

greyface- 5y ago

https://archive.is/79AXn https://archive.is/79AXn

jMyles 5y ago

Given the somewhat clickbaity headline, this piece is straight to the point and surprisingly sober. I found this to be the central thesis: > If anything, crypto is more likely to hurt the currencies of countries that are doing very poorly, such as Venezuela. Fiat currency won’t just go away, so over the long run crypto could actually boost the value of the dollar by stifling the rise of potential competitors. ...and the author is absolutely correct: much of the crypto crowd, whether or not they understand this, seems wont to ignore it. I view blockchain tech - and even crypto assets - as a wonderful, peaceful, transformative technology in the long-term. But I also think that the need for calm analysis, thinking about much, much longer timeframes, is sorely needed in the 'crypto crowd' today. > A second point, oft neglected in the crypto community, is that crypto prices won’t continue to go up forever at high rates. It doesn’t matter whether money supply deflation is built into a crypto system, or that new and valuable uses will be discovered each year. Here I again I agree, but I do want to add something important: New and valuable uses are very important right now. I work at NuCypher, and we are very proud of having deployed proxy re-encryption as an access management tool. But nobody is using it, for two reasons: 1) gas prices, 2) there are no other "new and valuable uses" which make access management worthwhile at the moment. Whether or not you see a rich future for blockchain tech, I hope we can all agree that solid uses - especially those which advantage groups marginalized by yesterday's internet - are the real driver of the eventual equilibrium the author describes here.

mech422 5y ago
Anyone who thinks crypto prices will continue to rise forever is not 'the crypto crowd'. 'The crypto crowd' has seen bitcoin go up and down countless times. The problem is, everyone seems to equate noobs getting suckered by Musk with the 'crypto crowd'. I feel bad for them, but it's like saying /r/wallstreetbets are 'investors'. P.S. - And where do they keep getting this 'fiat is going away' bull from? I honestly don't know anyone in crypto that thinks this? Yes, I see crap on youtube pumping stuff like this - is that now what the bar is? "I saw it on youtube" ?
- UIGYUIUYG 5y ago
  >is that now what the bar is? "I saw it on youtube" ? In todays society? Sadly, yes.

runbathtime 5y ago

Most people in crypto do not understand anything about economics. They understand ponzi/ greater fool theory and how to obfuscate to the public and regulators to pull the wool over someone's eyes.

arberx 5y ago
Most people do not understand anything about economics-in fact most economics is a work in progress.
- TheFreim 5y ago
  I'd go farther and take the Taleb route that NOBODY understands economics due to its random nature.
  - walkedaway 5y ago
    Thomas Sowell seems to have a solid grasp on economics. Too bad people don't study his work. Maybe if he wasn't black people in the US would listen to him.
    - bun_at_work 5y ago
      This is an outrageous statement. Thomas Sowell is a widely cited and studied economist. Many people study his work (including myself!). What does his being black have to do with anything? There is no group of people ignoring him for being black. In fact, the contemporary politics would suggest that, since he's black, he'd be democrat, but his economics are very libertarian, a group more associated with racists. So what are you on about? People don't "listen" to him because he's incredibly biased towards free-market economics, not because his skin color.
    - TheFreim 5y ago
      I don't understand what you mean, Sowell is very well regarded here in the United States in a variety of political environments.
    - 5y ago

johnklos 5y ago

This is about cryptocurrency, NOT crypto. The article name, at least, should have "sic" to indicate that it's a copy of something which is incorrect.

haste410 5y ago
Crypto has become a shorthand for cryptocurrency. Google "crypto" and see what comes up.
- ape4 5y ago
  Yeah sadly, it bugs me too. Also when somebody says "turn on the air" they probably are referring to air conditioning.
xyzzyz 5y ago
You are fighting a war for good cause, but this war has already been lost. Crypto means crypto currencies at this point, whether you want it or not.
brujoand 5y ago
Times (and words) are changing
OskarS 5y ago
It's standard usage at this point, adding a [sic] would not be correct. You should climb down from this hill.
deleted 5y ago
[deleted]
- deleted 5y ago
  [deleted]
ska 5y ago
For what it is worth “[sic]” does not mean that something is incorrect, just indicates it is a direct copy of another source. Could be an error or typo, could just be idiosyncratic, archaic, or potentially confusing. In your case it would not be appropriate, because like it or not the quote usage has become normal usage. I understand why that annoys people, but it’s done.

sna1l 5y ago

It is sad that the biggest influencers in crypto are like Pomp + Ran Neuner who constantly say shit like the "dollar is collapsing." You go be pro cryptocurrency and still hate cryptocurrency

koheripbal 5y ago

The fact that having a deflationary money supply is bad, is even debated in cryptocurrency forums is the clearest indication that they have no idea how economics works. ...also, the point of a currency is to act as a STABLE unit of exchange, not some speculative moon-shot. Once these money supply and stability issues are ironed out, and once the scalability problem is solved, I think we might really have something.

JumpCrisscross 5y ago
> the point of a currency is to act as a STABLE unit of exchange Very few informed observers seriously expect crypto to become a general-use currency. That's a role it detached from years ago, first in practice and then in rhetoric. The closest analog to what crypto seems to want to become in our financial markets is in risk-free assets. Universal collateral. This used to be gold. Now it's Treasuries and Bunds. None of those markets are terrifically efficient or universalized. And neither requires long-term price stability; just predictability. (Note: it does not follow that crypto will be as valuable as e.g. the Treasury market. Treasuries serve as a safe asset. They also finance the U.S. government. Figuring out the worth of the former detached from the latter is difficult.)
- danaris 5y ago
  It may not be what informed observers want it to be, but it's still what every single person I've seen trumpeting the virtues of cryptocurrency here on HN has been shooting for. The argument is invariably "the value of cryptocurrency is giving us a currency that's not controlled by central banks". Never have I seen someone saying cryptocurrency should be used because it's highly volatile and great for speculating. So there seems to be a significant divide between the people who use cryptocurrency (but don't attach a moral value to it) and the people who believe in cryptocurrency (but ignore what it's actually used for).
- nradov 5y ago
  The closest analog to what crypto seems to want to become in our financial markets is cash hidden in a briefcase. The value is primarily in evading currency controls for smuggling wealth out of China and other authoritarian states.

tfehring 5y ago

I still don't see how you get to a cryptocurrency that's broadly useful as a currency without enough price stability for it to be a unit of account in some sense. Tesla may have accepted BTC for payment, and it might do so again, but is it really going to commit to pricing its next model at (say) 1 BTC and just let the dollar-denominated price swing wildly? Probably not - its competitors price in dollars, so if BTC goes up it would become less attractive, and its suppliers price in dollars and other fiat currencies, so if BTC goes down its marginal revenue could fall below its marginal cost. On top of that, BTC-denominated debt is potentially toxic for the holder. Imagine if you bought a house for, say, 1000 BTC in 2016 and your mortgage was denominated in BTC. Gradual devaluation of debt is one reason that central bank inflation targets in developed countries tend to be small positive numbers. Monetary policy is hard, and despite (totally valid) criticisms of central banks' monetary policy decisions in recent years, I'm still skeptical that anyone can do it purely algorithmically and have better results than the Fed. I still think Libra was the only token (besides explicitly fiat-denominated stablecoins) I've seen that had a real shot at being broadly used as a currency, though I'm glad that FB won't be the ones to "own" a global currency. The "problem" is that any token that's stable enough to use as a currency is inherently too stable to have potential for large speculative gains (except if you lever it to the hilt as FX traders do today) - and IMO demand in the crypto space is still predominantly driven by speculative potential.

martin1975 5y ago
Doing a stablecoin to replace something like the USD is an extremely difficult problem. Reserve.org is one company which understands the gravity of the issue and is committed to producing a stablecoin for anyone, worthy enough to replace the USD.
- tfehring 5y ago
  At a glance it looks like that's materially the same mechanism that was used by IRON [0], which blew up last week after they had to mint too many of the stabilizing tokens to try to retain the USD peg. Am I missing something? [0] https://docs.iron.finance https://docs.iron.finance
- 5y ago

sadfasf122 5y ago

lol here comes the FUD

jonstaab 5y ago

Both things are well understood by the bitcoin community, at least. Bitcoin's utility doesn't depend solely on inflation or replacing the dollar as the global reserve currency, though that's a popular topic, since the collapse of the dollar would prove Bitcoin's place. For the second point, HODLing seems like it's forever, but it's only for the next decade or two; the expected growth comes from getting in early - just like if you bought an Warhol painting while he was still active. So I agree, but the author of the article is using these arguments to strawman the crypto community, which is full of really smart people as well as idiots.

reidjs 5y ago

One thing I like about crypto is you can simulate economics experiments with funny money online. Ponzi Scheme? There are plenty of these going on. Want to investigate Harberger's triangle/deadweight tax loss? Create a small game. Prediction markets? See auger. As long as you approach it from the perspective of 'this money is probably worthless' it's all just a fun learning experience about economic theory. The only problem is some people "invest" more than they are comfortable losing. And that causes some tragedy.

Syzygies 5y ago

I'm an author cited by the original bitcoin paper. I considered becoming an economist rather than a mathematician. Cryptocurrencies are a carbon-load environmental crime. Figuring a way around this is the major unsolved problem in the field. Are you a vegetarian in the crypto-crowd? You'd be doing the planet a favor to start eating meat and abandoning cryptocurrencies. National currencies used to be backed by gold; now they're backed by the nation's resolve to support the currency. Cryptocurrencies are not Ponzi schemes; they can stabilize, while Ponzi schemes collapse. Cryptocurrencies however are backed entirely by convention. One could argue that nations are conventions, but they are bound together by a constellation of motives beyond their currency. Cryptocurrencies are isolated conventions. That is their appeal and their vulnerability. We are a cripplingly conventional species. Our ability to organize allowed us to scale past the Neanderthals. However, many of us don't trust convention enough to trust cryptocurrencies.

DethNinja 5y ago
So what you are saying is we should move to communism and let members of federal reserve control people like slaves by printing money and handing it to their buddies? How come as a business owner I never received a dime of those printed out money? Entire economy is a huge scam just to let richest people live like kings at the expense of billions of humans. At least bitcoin is a good alternative against institutional corruption going on at the highest levels of the government.
- amanaplanacanal 5y ago
  Not sure how it’s different. In both cases, the people who make the currency and their friends get rich, and the average Joe gets nothing.
- dang 5y ago
  Please don't take HN threads into ideological flamewar. It makes discussions more predictable and nastier, and we're trying for the opposites here. If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and taking the intended spirit of the site more to heart, we'd be grateful. Note these ones: "Please don't use Hacker News for political or ideological battle. It tramples curiosity." "Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith."

black6 5y ago

> A second point, oft neglected in the crypto community, is that crypto prices won’t continue to go up forever at high rates. The True Believers expect and want this to happen. It has to level out to be a currency. Cryptocurrency is useless as a currency with the current volatility as a result of ignorant and rank speculation.

endisneigh 5y ago

The problem with cryptocurrencies is very simple. At some point X-COIN will reach a maximum price, $MAX. Why would anyone buy X-COIN at $MAX? By definition it will lose you money. You can repeat this argument with any amount, because ultimately you're just going to subject someone else to the same situation. Regress this to its logical extreme and you see there's no point of buying it at all, unless crypto itself has some meaningful value beyond its converted price to fiat. That itself has yet to be proven.

shawnb576 5y ago
Isn't this just the Greater Fool Theory [1] [1] https://www.investopedia.com/terms/g/greaterfooltheory.asp https://www.investopedia.com/terms/g/greaterfooltheory.asp