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> Have fun watching your fiat lose value to inflation Where did crypto fans get this weird idea that the only two options for storing wealth are fiat cash or c

> Have fun watching your fiat lose value to inflation Where did crypto fans get this weird idea that the only two options for storing wealth are fiat cash or cryptocurrency? It’s bizarre that these crypto investors think anyone with significant wealth is keeping it in a bank account earning 0.05% APY and losing to inflation. I suspect many of them aren’t coming from backgrounds with much, or maybe any, education about basic personal finance. I don’t understand how these crypto people can talk about their crypto prices all day in terms of fiat dollar value, yet not realize that we do the same thing for stocks, bonds, real estate, and other assets too. This idea that crypto is the only way to escape inflation is one of the weirdest and most easily disprovable myths, but every crypto thread is full of crypto holders who want to believe it’s true. It’s also silly to watch the proliferation of ever-increasing numbers of crypto currencies and crypto assets being generated out of thin air being willfully ignored in the money printing conversations. Do people really not understand that crypto currencies are being printed and injected into the crypto ecosystem all the time?

jl2718 5y ago
Here’s something to consider: Right now AMZN is worth something because it is believed that it can be sold to the next person for more than was paid to the previous holder. What about the last person that will ever hold that share? How will they profit from owning it?
- porb121 5y ago
  > Right now AMZN is worth something because it is believed that it can be sold to the next person for more than was paid to the previous holder. this is....not how stocks work
- pyrale 5y ago
  > What about the last person that will ever hold that share? How will they profit from owning it? They will have voting rights on the board and perceive dividends from one of the most successful companies in recent history? Even if the company stopped its activities today, liquidating its assets: land, patents, infrastructure, contracts, data, etc. would bar the stock from going to zero.
- imtringued 5y ago
  We have hundreds of articles complaining about companies doing stock buy backs... how companies value their shareholders more than their employees. There is even an internet myth that companies have to be maximally profitable if they don't want to be in legal trouble versus their shareholders. It's really quite simple. Companies grow and make profits. They issue dividends or do stock buybacks and return excess cash to investors. The market might be overvalued but bubbles burst eventually.
- lottin 5y ago
  > Right now AMZN is worth something because it is believed that it can be sold to the next person for more than was paid to the previous holder. This is not the reason AMZN is worth something at all. The reason is because 1. assets > liabilities and 2. it's a business that generates a stream of net income. And this is independent from what the stock market thinks AMZN is worth. For example, if the stock market thought AMZN was worth zero, you could buy the entire company for nothing and liquidate it for a profit, or keep it running and pocket the business profits, so it would still be worth something.
rvz 5y ago
> but every crypto thread is full of crypto holders who want to believe it’s true. It's because they want their crypto holdings to go to the moon. HODLing works if you got in early which in the case of BTC when it was around <$9 - $500 with more than 50,000x returns. Right now? It does not. They do not know how to trade it and take profit, so they just hold it all the way up and never take it out; even if it crashes back down, which you can buy it back at a lower price. > It’s also silly to watch the proliferation of ever-increasing numbers of crypto currencies and crypto assets being generated out of thin air being willfully ignored in the money printing conversations. Yes. Everyday there are new worthless tokens and coins being generated and listed on lesser known exchanges and NFTs being minted it out of thin air. Almost all of them have no use case or reason to exist other than having the creator dumping their creation onto the retail crypto holder. Thanks to cointool [0], now anyone can create and list their own ERC-20 scam coin and anyone can create a .PNG, .JPG NFT and mint it out of thin air. > Do people really not understand that crypto currencies are being printed and injected into the crypto ecosystem all the time? They will find out the hard way. Some are doing this very quickly until a 2018 style crash will come due to more regulations or a full crackdown. [0] https://cointool.app/dashboard https://cointool.app/dashboard
ajkdhcb2 5y ago
The issue is that people are forced to hold cash, and this disproportionately impacts the low class that are not financially educated and do not own or understand stocks, bonds, real estate. Inflationary currency is a class warfare attack on the poor. Stocks, bonds, real estate are not a potential replacement to fix this malicious situation because they are not suitable for transactions. It also allows creep into many metrics such as minimum wage which are not fairly adjusted. https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/
- imtringued 5y ago
  Inflation has been at roughly 2% for 20 years. It's been below 5% for at least 40 years. If high inflation is really that bad for the "low class" then how come they are doing so poorly despite avoiding it for so long?
  - cratermoon 5y ago
    Your insight is doubly poignant because even though inflation has been thoroughly throttled for most of the time Paul Graham has been alive, the average American worker still somehow has ended up earning less, in inflation adjusted dollars, than 40 years ago. https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us... Think about that. In 40 years the average worker hasn't even gotten a 5% raise.
    - afrodc_ 5y ago
      So that points to it not being a fiat currency issue, but more something along the lines of labor exploitation? Excluding some industries, there has been no forcing factor to increase wages and the outsourcing of labor just taking money off the table entirely. That's in stark contrast to incredible year over year profits for corps.
      - cratermoon 5y ago
        > something along the lines of labor exploitation That's a gentle way of putting it, but essentially correct.
zepolen 5y ago
While it's not wrong that there are other options for storing wealth, crypto is the first one that is easily transferable across borders and thus far has shown to be resilient at not being controllable by government. Multiple attempts have been made over a decade to control crypto. The most recent China banning miners for example showed that crypto just adapts and overcomes. This of course is scary for the people who used to have complete control over money, and even more so for countries that can no longer control their citizens by seizing their assets.
- lottin 5y ago
  Governments continue to be able to seize assets, I don't know where you get the impression that they no longer are.
  - zepolen 5y ago
    They can't seize crypto.
    - lottin 5y ago
      Crypto is tiny proportion of your assets. Even in the most favourable scenario, where you own nothing but crypto, you're still vulnerable because you have a physical body. The simple fact is that crypto does nothing to hinder the government's ability to control citizens.
    - dibdobdot 5y ago
      That’s 100% false. https://www.cnbc.com/2021/08/04/irs-has-seized-1point2-billion-worth-of-cryptocurrency-this-year-.html https://www.cnbc.com/2021/08/04/irs-has-seized-1point2-billi...
      - zepolen 5y ago
        Ok let me rephrase, they can't seize crypto from competent people.
mouzogu 5y ago
> ...real estate, and other assets too. This is why i "invest" in crypto. Because people have been treating real estate as investment and i'ts gone too far. crypto is pretty much the ONLY way i will ever afford a home without taking on soul destroying debt.
- afrodc_ 5y ago
  Can you expand on this? What about crypto will make it such that you can afford a home? That more people throwing in more money will increase your valuation such that you can exit to fiat and leave the bag for someone else to hold for them to hope people throw in more fiat?
  - dibdobdot 5y ago
    Unfortunately I think you’ve nailed it. But speculation on risky assets is a symptom of desperation amidst a growing wealth gap, I just don’t see this disappearing soon. It’s a very clever scam
w4llstr33t 5y ago
I agree that some crypto folks may not have basic personal finance education (although some people investing in stocks, and promoting that to others, also do not have basic personal finance education). I also agree though that some cryptos basically print money (as one example, go look into the inflation rate of Curve DAO, a popular DeFi protocol, which I don't invest in, due to the inflation rate). Bitcoin does not print money or have a high inflation rate, and that is the point of it (it was the original cryptocurrency that took off, so saying that the whole crypto sphere is bad is kind of like saying that because there is some bad software that all software is bad, or that because there is one stock that is bad that all stocks are bad). The max supply of Bitcoin is capped. I don't think that Bitcoin is the only digital asset worth investing in, but I also don't think it is valid to claim that all crypto is printing money, or that all crypto is bad. I am a crypto fan. I don't think that it's the only way of storing wealth. I also invest in an S&P 500 index. I do think that crypto has a higher potential to beat inflation over time, with inflation currently at 5.4% [1], vs stocks. US stocks have been propped up by The Fed printing USD (which they can due to it being the world reserve currency, which may or may not last forever) and investing it into Wall Street, as well as dropping lending rates to essentially zero, since the March 2020 crash. The Fed has already signaled their intention to raise rates in the next few years, which would damper some of the bullishness of the stock market. Crypto is a new asset class that investors can consider if they have some risk tolerance, with the potential for a high reward. The thing that I think a lot of people miss is that traditional finance is by no means perfect. There are negative interest rates in some parts of the world (i.e. see Europe). There have been synthetic assets in traditional finance like CDO's (i.e. see The Big Short), which are detached from reality (and assets like that will continue to be created because big money will continue to be bailed out). The current P/E ratios of even some popular stocks (i.e. TSLA) don't reflect traditional fundamentals, so there is a lot of speculation, just like with crypto (I don't think that speculation is bad, there are folks betting on what a company or a technology can become in the future). Also, the US Debt increases every year, with no signal that they will ever pay it back. Based on all this, I think it is worth considering some other asset classes to invest in vs purely traditional finance. Anyway, just because crypto is not perfect and the space has many digital assets (and not everyone understands them), it doesn't mean that as a whole that it's bad and should be destroyed. There's so much already invested in the crypto space, and it's not just capital, it's startups and human time invested (like any other software project or field). People will continue down this path in one way or another. Regulation will likely mature the space and more people will feel comfortable to invest in it based on that. I think that crypto will at least exist alongside traditional finance, even if it does not completely transform it, and it's worth being open to seeing how this technology can benefit us all. [1] https://www.usinflationcalculator.com/inflation/current-inflation-rates/ https://www.usinflationcalculator.com/inflation/current-infl...

jl2718 5y ago

Here’s something to consider: Right now AMZN is worth something because it is believed that it can be sold to the next person for more than was paid to the previous holder. What about the last person that will ever hold that share? How will they profit from owning it?

porb121 5y ago
> Right now AMZN is worth something because it is believed that it can be sold to the next person for more than was paid to the previous holder. this is....not how stocks work
pyrale 5y ago
> What about the last person that will ever hold that share? How will they profit from owning it? They will have voting rights on the board and perceive dividends from one of the most successful companies in recent history? Even if the company stopped its activities today, liquidating its assets: land, patents, infrastructure, contracts, data, etc. would bar the stock from going to zero.
imtringued 5y ago
We have hundreds of articles complaining about companies doing stock buy backs... how companies value their shareholders more than their employees. There is even an internet myth that companies have to be maximally profitable if they don't want to be in legal trouble versus their shareholders. It's really quite simple. Companies grow and make profits. They issue dividends or do stock buybacks and return excess cash to investors. The market might be overvalued but bubbles burst eventually.
lottin 5y ago
> Right now AMZN is worth something because it is believed that it can be sold to the next person for more than was paid to the previous holder. This is not the reason AMZN is worth something at all. The reason is because 1. assets > liabilities and 2. it's a business that generates a stream of net income. And this is independent from what the stock market thinks AMZN is worth. For example, if the stock market thought AMZN was worth zero, you could buy the entire company for nothing and liquidate it for a profit, or keep it running and pocket the business profits, so it would still be worth something.

rvz 5y ago

> but every crypto thread is full of crypto holders who want to believe it’s true. It's because they want their crypto holdings to go to the moon. HODLing works if you got in early which in the case of BTC when it was around <$9 - $500 with more than 50,000x returns. Right now? It does not. They do not know how to trade it and take profit, so they just hold it all the way up and never take it out; even if it crashes back down, which you can buy it back at a lower price. > It’s also silly to watch the proliferation of ever-increasing numbers of crypto currencies and crypto assets being generated out of thin air being willfully ignored in the money printing conversations. Yes. Everyday there are new worthless tokens and coins being generated and listed on lesser known exchanges and NFTs being minted it out of thin air. Almost all of them have no use case or reason to exist other than having the creator dumping their creation onto the retail crypto holder. Thanks to cointool [0], now anyone can create and list their own ERC-20 scam coin and anyone can create a .PNG, .JPG NFT and mint it out of thin air. > Do people really not understand that crypto currencies are being printed and injected into the crypto ecosystem all the time? They will find out the hard way. Some are doing this very quickly until a 2018 style crash will come due to more regulations or a full crackdown. [0] https://cointool.app/dashboard https://cointool.app/dashboard

ajkdhcb2 5y ago

The issue is that people are forced to hold cash, and this disproportionately impacts the low class that are not financially educated and do not own or understand stocks, bonds, real estate. Inflationary currency is a class warfare attack on the poor. Stocks, bonds, real estate are not a potential replacement to fix this malicious situation because they are not suitable for transactions. It also allows creep into many metrics such as minimum wage which are not fairly adjusted. https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/

imtringued 5y ago
Inflation has been at roughly 2% for 20 years. It's been below 5% for at least 40 years. If high inflation is really that bad for the "low class" then how come they are doing so poorly despite avoiding it for so long?
- cratermoon 5y ago
  Your insight is doubly poignant because even though inflation has been thoroughly throttled for most of the time Paul Graham has been alive, the average American worker still somehow has ended up earning less, in inflation adjusted dollars, than 40 years ago. https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us... Think about that. In 40 years the average worker hasn't even gotten a 5% raise.
  - afrodc_ 5y ago
    So that points to it not being a fiat currency issue, but more something along the lines of labor exploitation? Excluding some industries, there has been no forcing factor to increase wages and the outsourcing of labor just taking money off the table entirely. That's in stark contrast to incredible year over year profits for corps.
    - cratermoon 5y ago
      > something along the lines of labor exploitation That's a gentle way of putting it, but essentially correct.

zepolen 5y ago

While it's not wrong that there are other options for storing wealth, crypto is the first one that is easily transferable across borders and thus far has shown to be resilient at not being controllable by government. Multiple attempts have been made over a decade to control crypto. The most recent China banning miners for example showed that crypto just adapts and overcomes. This of course is scary for the people who used to have complete control over money, and even more so for countries that can no longer control their citizens by seizing their assets.

lottin 5y ago
Governments continue to be able to seize assets, I don't know where you get the impression that they no longer are.
- zepolen 5y ago
  They can't seize crypto.
  - lottin 5y ago
    Crypto is tiny proportion of your assets. Even in the most favourable scenario, where you own nothing but crypto, you're still vulnerable because you have a physical body. The simple fact is that crypto does nothing to hinder the government's ability to control citizens.
  - dibdobdot 5y ago
    That’s 100% false. https://www.cnbc.com/2021/08/04/irs-has-seized-1point2-billion-worth-of-cryptocurrency-this-year-.html https://www.cnbc.com/2021/08/04/irs-has-seized-1point2-billi...
    - zepolen 5y ago
      Ok let me rephrase, they can't seize crypto from competent people.

mouzogu 5y ago

> ...real estate, and other assets too. This is why i "invest" in crypto. Because people have been treating real estate as investment and i'ts gone too far. crypto is pretty much the ONLY way i will ever afford a home without taking on soul destroying debt.

afrodc_ 5y ago
Can you expand on this? What about crypto will make it such that you can afford a home? That more people throwing in more money will increase your valuation such that you can exit to fiat and leave the bag for someone else to hold for them to hope people throw in more fiat?
- dibdobdot 5y ago
  Unfortunately I think you’ve nailed it. But speculation on risky assets is a symptom of desperation amidst a growing wealth gap, I just don’t see this disappearing soon. It’s a very clever scam

w4llstr33t 5y ago

I agree that some crypto folks may not have basic personal finance education (although some people investing in stocks, and promoting that to others, also do not have basic personal finance education). I also agree though that some cryptos basically print money (as one example, go look into the inflation rate of Curve DAO, a popular DeFi protocol, which I don't invest in, due to the inflation rate). Bitcoin does not print money or have a high inflation rate, and that is the point of it (it was the original cryptocurrency that took off, so saying that the whole crypto sphere is bad is kind of like saying that because there is some bad software that all software is bad, or that because there is one stock that is bad that all stocks are bad). The max supply of Bitcoin is capped. I don't think that Bitcoin is the only digital asset worth investing in, but I also don't think it is valid to claim that all crypto is printing money, or that all crypto is bad. I am a crypto fan. I don't think that it's the only way of storing wealth. I also invest in an S&P 500 index. I do think that crypto has a higher potential to beat inflation over time, with inflation currently at 5.4% [1], vs stocks. US stocks have been propped up by The Fed printing USD (which they can due to it being the world reserve currency, which may or may not last forever) and investing it into Wall Street, as well as dropping lending rates to essentially zero, since the March 2020 crash. The Fed has already signaled their intention to raise rates in the next few years, which would damper some of the bullishness of the stock market. Crypto is a new asset class that investors can consider if they have some risk tolerance, with the potential for a high reward. The thing that I think a lot of people miss is that traditional finance is by no means perfect. There are negative interest rates in some parts of the world (i.e. see Europe). There have been synthetic assets in traditional finance like CDO's (i.e. see The Big Short), which are detached from reality (and assets like that will continue to be created because big money will continue to be bailed out). The current P/E ratios of even some popular stocks (i.e. TSLA) don't reflect traditional fundamentals, so there is a lot of speculation, just like with crypto (I don't think that speculation is bad, there are folks betting on what a company or a technology can become in the future). Also, the US Debt increases every year, with no signal that they will ever pay it back. Based on all this, I think it is worth considering some other asset classes to invest in vs purely traditional finance. Anyway, just because crypto is not perfect and the space has many digital assets (and not everyone understands them), it doesn't mean that as a whole that it's bad and should be destroyed. There's so much already invested in the crypto space, and it's not just capital, it's startups and human time invested (like any other software project or field). People will continue down this path in one way or another. Regulation will likely mature the space and more people will feel comfortable to invest in it based on that. I think that crypto will at least exist alongside traditional finance, even if it does not completely transform it, and it's worth being open to seeing how this technology can benefit us all. [1] https://www.usinflationcalculator.com/inflation/current-inflation-rates/ https://www.usinflationcalculator.com/inflation/current-infl...