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I think you will find in many places of life people are just trying to make a quick buck but in crypto this truth seems to cause a visceral reaction for people.

• emodendroket 5y ago
  At the very least it makes me want to check my watch is still on when someone tries to convince me it's an "anti-elite" invention, despite appearances, as this article seeks to do.
  • bogota 5y ago
    I’ll read the article again with this in mind but on first read it didn’t come across as trying to convince of anything other than using the gini coefficient isn’t insightful and he pointed out the flaws as he sees it.
  • secondaryacct 5y ago
    It's like every attempt at a great replacement: the incentive is for a group of people to replace another and get the same benefits. Be it a communist revolution, the crypto alt finance or whatever, the hardest is always to build an all encompassing compromise to let people have moderate increase in comfort while not totally shifting the balance in the opposite direction.
  • imtringued 5y ago
    I don't see how it is an anti elite invention. Deflation scales with your networth. The bigger your networth the bigger the income from deflation. The only difference is that the system is new and the elites haven't established themselves yet but it is starting to get old. Give it another 10 years and it will be just as bad as everything else. Inflation scales with your networth too but it doesn't reward you. You'll have to find an income source to cover the loss. Most inflation protected income streams rely on employing humans. If you were to pay out a fixed UBI to all people and finance it with inflation then basically people with above average deposits would see the value of their bank account decrease and approach average wealth and people with below average deposits would see the value of their bank account increase and approach average wealth as well. Assuming inflation = low unemployment holds then incomes would rise vs wealth which would be a reasonable approximation of the theoretical UBI I proposed above.
• arcticbull 5y ago
  > The same logic though could be applied to startups or any business. The first people in do a large amount of the work in helping it grow and are rewarded for that. Maybe too much but that’s hard to quantify. With a business where you hold shares, the business generates cash flow. That cash flow is invested in the business, in share re-purchases and in dividends. This cashflow increases the intrinsic value of each share of the business. The expectation is that holders of equity will be rewarded through the future performance of the business. Those early folks are rewarded by people who derive value from the system - the customers of the business, whoever they are. They're rewarded for building a business not shilling their equity. The equity value is a consequence of the business being built. On the other hand the sole source of gains from crypto come from future buyers. Worse, miners, especially on PoW chains, have to be paid and so constantly extract huge quantities of welfare from the system. With Bitcoin, it's something like 20-30 million dollars per day. That gets turned almost directly into CO2 and e-waste. 67MT of CO2 and 6.5kT on e-waste per year. Early holders are simply rewarded for shilling, hoping someone else will grab their coins for a higher price. It's just an MLM scheme which yields zero intrinsic value. Ergo, bitcoin is strongly negative sum while equities are positive sum vehicles. The thing is, most people don't understand the economics or the fundamentals. Those who do get it (especially bankers, ex-wallstreet folks) intentionally downplay it rather than educating folks because they know their paycheck depends on people not understanding. The community pretends or fails to understand and looks the other way. They're all convinced they're "getting in early, on the ground floor of the future of money" - classic MLM stuff. They're really only superficially similar, in the sense they're traded on brokerage-like services.
  • mcherm 5y ago
    Not necessarily. I work for a bank. Applying your analysis, one could argue that banks offer zero intrinsic value. After all, all they allow you to do is to move money around back and forth between different people. But, as it turns out, moving money back and forth between different people is a very valuable service. Let me be clear: there are many activities practiced by banks that add very little value to the world. For example, one could argue that high frequency trading (beyond the point needed to provide market liquidity) adds very little value. But banks allow people to exchange goods and services without having to barter. Banks allow people to store wealth and transport wealth and exchange both with other people without having to move around carts laden with gold and higher huge numbers of guards to keep it safe. Banks help to match together people who have capital ("investors", "savers") with people who could accomplish things if only they had capital ("borrowers","entrepreneurs") and facilitates them working together through interest payments. Just as banks are far from useless (although some of the things they do add little value to humanity), so cryptocurrencies *MAY* be far from useless (although I agree the majority of people involved at this point are doing little more than engaging in a broad Ponzi scheme).