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All these coins are proven to be worthless. When speculation is making everyone money, the money isn't worth much. Edit: Love the immediate fear downvote. No o

by dexwiz 5y ago

All these coins are proven to be worthless. When speculation is making everyone money, the money isn't worth much. Edit: Love the immediate fear downvote. No one wants to hear their gold is really just shiny dirt.

dragontamer 5y ago
The downvotes are because "worthless" is hyperbolic and unhelpful. Clearly, the coins have value because someone out there feels like paying money for them. More importantly: we _HAVE_ to understand the market dynamics here. What's going on is very human and very important to realize. Matt Levine from Bloomberg has a very simple explanation: the cryptocoin world has discovered "senior debt vs junior debt", and are using this concept to create stablecoins. ------------------ The issue is, the rest of the world _REMEMBERS_ 2008, and what happened the last time we relied upon the senior/junior debt split. The concept is simple: Junior debt is high-risk. Senior debt is low-risk. Through the use of structuring your economy around this concept, your junior debt "supports" senior debt. A stable-coin, is simply the senior-debt on some other cryptocoin. ------- Lets take BTC for example. Lets say I want to "create" a stablecoin out of BTC, despite its widely varying valuation. Lets say I set up a senior set of notes: it stays at $1 as long as BTC stays above $10,000. But what about all the "risky part" ? Well, someone out there in the world wants to bet it all on the risky part. When BTC rises from $10,000 to $50,000, they want to make $40,000 with $0 investment. Because the "senior" guy already took the risks for $10,000 and below, I can now offer the "rest of the gains" to the junior guy, who can play with all the values of BTC above $10,000 (except, without having to pay any money in the first place). When BTC goes up to $20,000, the junior guy spent $0 and made $10,000. Senior guy still has $10,000. When BTC goes up to $50,000, junior guy now has $40,000 and senior guy has $10,000. This sounds hypothetical, but its in fact very similar to how the stablecoin TITAN / IRON was structured, with Titan as the "senior" stablecoin and Iron as the junior. Now just wrap it all up in a smart contract, maybe tie the concept to Ethereum (or whatever other cryptocoin suits your fancy), and you too can reinvent senior/junior debt structures and pretend you're a genius. ------ You see? Senior is "just" the stablecoin guy. Junior is the WSB idiot who might lose all of his money. Or in other terms: your CDO of CDOs is truly and 100% secure. You may have a pile of shit, but you can extract stable values out of it. Or at least, so went the theory of 2008 housing crisis, CDOs, and CDSes and all that. We know where that went however. It hasn't even been 13 years and everyone's forgotten about the underlying assumptions that broke the market in the 00s.
- null_object 5y ago
  > When BTC goes up to $20,000, the junior guy spent $0 and made $10,000. Senior guy still has $10,000. When BTC goes up to $50,000, junior guy now has $40,000 and senior guy has $10,000. You used a lot of words to describe a Ponzi scheme.
  - dragontamer 5y ago
    I'm describing a CDO scheme. Its important to remember the difference. Ponzi is a very, very different structure. CDOs do well as long as the underlyings don't crash beyond a certain value. The "junior" guys have lots of risk (and they _WANT_ the risk and enjoy it). The "senior guys" think they're safe. Indeed: senior/junior is roughly how we split up fiat dollars: banks do this with our money all the time (under tight regulations of course, to ensure that the banks are following the rules). Senior/junior can work, but in practice... someone out there will want to cheat the system. At that point, it all comes crashing down. Regulating the heck out of banks to ensure that no one cheats is a big part of the solution.
    - hestefisk 5y ago
      Very interesting. Can you recommend any good books on this topic to learn more?
      - dragontamer 5y ago
        For 2008, I think one of the most approachable references is the PBS "Inside the Meltdown": https://www.pbs.org/wgbh/pages/frontline/meltdown/ https://www.pbs.org/wgbh/pages/frontline/meltdown/ * https://www.pbs.org/wgbh/frontline/film/meltdown/ https://www.pbs.org/wgbh/frontline/film/meltdown/ The 2012 lookback has a bit more depth, since it had more time to do interviews and stuff: https://www.pbs.org/wgbh/frontline/film/money-power-wall-street/ https://www.pbs.org/wgbh/frontline/film/money-power-wall-str... There's of course, "The Big Short" if you want a stupid 2-hour movie. But that movie glosses over so many details and is straight up hyperbole at many points... so its not "realistic" but maybe a better thing to watch if you really don't want to put in much effort? ------- I guess my post was based off of the Bloomberg blogpost "Looking for Tether’s Money" by Matt Levine. So read that for my original inspiration, though you may need a Bloomberg subscription to be able to read it.
seph-reed 5y ago
Even less than people want to hear that gold is just shiny dirt, people don't want to hear that almost all perceptions of value are inherently subjective and meaningless. That social credit, and money, and everything we hold dear and true is just narrative we've crafted around ourselves to cope with the uncaring void that is the cosmos. So -- my guess -- people are probably going to keep thinking that things are valuable so long as everyone else around them does. And technically everything can be reduced to nothing more than a set worthless human brain farts. Edit: except for your values of course. Whoever you are, your values are certainly meaningful, and your life is a story that really matters.
- playpause 5y ago
  Where do you get that people “don’t want to hear” this? I find it’s a tedious revelation that people seem to love having. Yes, things are only valuable if people believe they’re valuable. Deep. So what though?
  - seph-reed 5y ago
    So every emotion except confusion is inherently just a person over-simplifying their reality. All the fighting: it's fucking stupid.
Oberbaumbrucke 5y ago
A Pet rock
silentsea90 5y ago
There's a canonical toxic response to this = HFSP. I don't like that because we're all still learning. I hope you see how the money printer is making scarce assets outside of Govt manipulation more valuable. The Bitcoin rabbit hole goes deep. You're right in that stablecoins might actually be worthless in the long run since they're backed by USD which might be worthless in due course of time. Zoom out of the day to day movement - we're in price discovery stage where nothing makes sense in the short term.
- NikolaNovak 5y ago
  >>There's a canonical toxic response to this = HFSP. I don't feel this was your actual response, but I still need to address it because I don't understand how anybody ever can have that as a remotely legitimate, thought-out response. How can any financial instrument/currency make everybody "rich", in any real terms? If you gave everybody million USD tomorrow, it'd crash so bad that we'd be right back where we came from. Is there anybody that believes that we could all invest fiat money into X.coin, and after some period of time, we'd all be rich? If so, how? What wonderful value does it produce, what mechanism would magically elevate all without disruption? From where I'm sitting, any currency or investment is a re-distribution of wealth/money/value. A person who bought X.coin yesterday can only derive/extract value tomorrow if somebody else buys it for more. We didn't gain/extract/create value out of thin air by virtua of fintech, it's a simple exchange. So what if everybody DID get some X.coin, so that nobody did "HFSP"? What'd happen then?
  - whatshisface 5y ago
    >How can any financial instrument/currency make everybody "rich", in any real terms? By organizing economic activity in a more efficient way than our present system of centrally planned debt supplies. That's what currency is "for" - organizing real activities.
    - Muromec 5y ago
      So what kinds of economic activities, besides ransom, drug sales and donations to wikileaks and others not liked by u.s. government does bitcoin facilitate? Remittances to countries under repressive economical regime or under embargo? Not saying those are good or bad, just aiming to quantify the market size.
satellite2 5y ago
You have to be careful with your choice of words. Especially on an engineering / science forum. The word "proven" implies a definitive certainty backed by solid theoretical foundation and a massive body of evidence. Very few things are proven in social science and economics. And most of them are simply definition. You are free to express your opinion though, but please mark it as such and make at least a small effort to explain how you reached it as otherwise your post is not adding value to the conversation.
- mmaunder 5y ago
  This public official laying down rules “you are free to… but please” tone has become commonplace on HN in the past few years. Anyone know the origin? Perhaps a shift in public enthusiasm for controlling speech? Did it start at universities? It seemed to just show up one day around 2018. It’s incredibly distracting.
  - alonsonic 5y ago
    The audience of hackernews has grown and old users are trying to maintain the culture of the site. The value of this site comes from its community. Let's not turn it into reddit. I personally welcome this type of policing.
    - nostrademons 5y ago
      There's a certain irony in creation dates here: mmaunder: 2007. satellite2: 11 months ago. dexwiz: 2015. alonsonic: 2016. burnished: 8 months ago. nostrademons: 2007. Anyway, I don't think such tone-policing is all that off-culture for HN, nor do I mind it all that much. PG explicitly said back around 2008 that posts which keep the discourse civil and intellectually honest are welcome even if they don't directly add content. I just thought that there's a certain irony about "old users trying to maintain the culture of this site" when the users in question are less than a year old and are responding to someone who's been here for 14 years.
      - 5y ago
biztos 5y ago
I just went through the process of buying something expensive in a "trustless" system in an IRL country. It was pretty painful and very expensive -- I paid $300 just to get a guaranteed check cut! Of course this is a trivial problem to solve with smart contracts, if you can have things like real-life identity and real-life money mapped to them. While I don't think any of the crypto stuff out there today solves any of these problems realistically, at least Ethereum sure looks like an experiment in that direction. That a lot of people are getting rich speculating on crypto absolutely triggers my FOMO, and sometimes my disdain (cf. certain NFT sales) -- but I definitely wouldn't call it worthless. Some day we may have free, secure, trustless escrow via smart contracts, and a bunch of other neat stuff. I think that's unlikely to be on any of the current networks, but I also think we'll get it decades earlier because of them.
- throwawaygh 5y ago
  > Of course this is a trivial problem to solve with smart contracts, if you can have things like real-life identity and real-life money mapped to them. This reminds me of talking to a salesperson at $BIG_CO about their "blockchain platform cloud" offering for "ending inventory tracking system inaccuracy problems once and for all". I could never figure out how cryptography was supposed to help with the "is the physical thing actually where it's supposed to be in the physical warehouse" problem. That seemed like the non-trivial part. Everything else you could just do with a flat-file CSV or whatever. The free drinks were nice.
- jollybean 5y ago
  "Of course this is a trivial problem to solve with smart contracts, " No, it doesn't. The 'contract' was never the issue really. We need a judicicial and regulatory system in which the contract is valid, the means to redress issues, undo transactions. Now, $300 is probably too much to move money and speaks to the incumbency of financial actors ... but a good chunk of that cost is actually the reality of the fact that it takes a lot of very smart, very conscientious and super 'small-c' conservative running financial infrastructure. I think regular fintech startups will beat down that $300 cost faster than crypto will.
nscalf 5y ago
Amazing how many people are die hard advocates of being closed minded. The net market for crypto hits over a trillion dollars, and you still say things like this declaring they are proven to be worthless. This is posted on a report by the US government on a technology that is effectively a digital wrapper to use the US dollar easily online. How is there no worth in that? Out of curiosity, what would it take to change your mind on this? Is there not even a single dollar of real value in the crypto world?
- ForHackernews 5y ago
  Monero and other privacy coins have some real utility for enabling drug sales, tax evasion and ransomware. In terms of above-board use cases, I'm deeply skeptical.
- mosdl 5y ago
  I can already use the us dollar easily online.
  - lowkey 5y ago
    Yes, but you likely live in a first-world country with generous options for banking. Bitcoin can serve anyone anywhere, regardless if they live in a privileged country or not. Try using your USD bank to send/receive money as a citizen of Iran or Libya or Nigeria. There are over 1 billion unbanked in the world today. They cannot use the US dollar easily online.
    - SavantIdiot 5y ago
      This is the fallback argument crypto enthusiasts use when their primary arguments fail. I'd like to learn more about the truth to this claim.
      - lowkey 5y ago
        I work on an international team and 2 of our devs are based in Nigeria. Nigeria currently suffers from 16% annual inflation and so the people have flocked to crypto as a store of value. Over 20% of the population uses cryptocurrencies. There are many more examples including Venezuela, Iran, the West Bank, and El Salvador.
sharperguy 5y ago
I think it would be helpful here to compare the theory of a ponzi scheme to that of bitcoin. In the beginning, buyers buy into a ponzi scheme because of a story that the creators are telling about their scheme. As time goes on, people buy in because the early investors are making a ton of money, as the value of the asset begins to skyrocket. Later on, people buy in because of previous hype, even though returns are actually beginning to level off, people don't notice. In the end, returns start to go negative, and the asset plummets, because nobody else has any reason to buy the asset anymore. With bitcoin the theory goes: In the beginning, buyers buy into bitcoin because of the vision and idea of a decentralized currency made by an anonymous hacker on the internet. As time goes on, people buy in because the early investors are making a ton of money, as the value of the asset begins to skyrocket. Later on, people buy in because of previous hype, even though returns are actually beginning to level off. In the end, however, due to the properties of the currency, and its penetration throughout the population, people continue to buy even though there is little profit to be made anymore. It has been shown to be a better long term store of value than fiat currency, but with similar liquidity, unlike other assets with higher returns such as bonds and real estate. It can be easily transferred around the globe and is highly divisible, making it useful for payments large and small, avoiding complex VISA networks and regulatory red tape. Due to its enforced scarcity, it isn't possible to create any more of it, and so it maintains its high price rather than simply being overproduced back down to a lower valuation.
- neaanopri 5y ago
  Nice balanced take, though you're leaving out the incredibly harmful environmental impact
- swader999 5y ago
  A ponsi scheme is fundamentally different than a market. With a market one day you trade five USD for one BTC. The next the best offer your able to get from anyone might be two USD for one BTC. That's just the nature of any market for anything. Value for anything depends on who comes to the market and their bias. A ponsi scheme is nefarious and more of a shell game. When the asset is gone, it's really gone and not coming back. There eventually aren't units to redeem because the originator took the aasset. If BTC or crypto were a ponsi the analogy would be satoshi hacking your wallet and draining your funds. In traditional crypto there aren't returns, there's just potential for it's perceived value relative to a base like the USD to change.
swarnie 5y ago
While absolutely correct you've picked the wrong audience and you know it.
deleted 5y ago
[deleted]
dang 5y ago
You broke the site guidelines badly — first with the shallow dismissal, and then with the off-topic complaint about downvotes and name-calling. If you'd please review https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and stick to the rules when posting here, we'd appreciate it. We detached this subthread from https://news.ycombinator.com/item?id=29072552 https://news.ycombinator.com/item?id=29072552. (p.s. This is just about comment quality and HN guidelines - not any position on the underlying topic)
young_unixer 5y ago
Who said speculation is making everyone money? Some people are going to lose money, specially those who buy at the top. And the fact that millions of people are willing to pay 60000 USD for one of these coins proves that they aren't really "worthless". Is the dollar worthless because you can't use it to buy the same things you could buy in 1995 with the same amount?

by dexwiz 5y ago

dragontamer 5y ago

The downvotes are because "worthless" is hyperbolic and unhelpful. Clearly, the coins have value because someone out there feels like paying money for them. More importantly: we _HAVE_ to understand the market dynamics here. What's going on is very human and very important to realize. Matt Levine from Bloomberg has a very simple explanation: the cryptocoin world has discovered "senior debt vs junior debt", and are using this concept to create stablecoins. ------------------ The issue is, the rest of the world _REMEMBERS_ 2008, and what happened the last time we relied upon the senior/junior debt split. The concept is simple: Junior debt is high-risk. Senior debt is low-risk. Through the use of structuring your economy around this concept, your junior debt "supports" senior debt. A stable-coin, is simply the senior-debt on some other cryptocoin. ------- Lets take BTC for example. Lets say I want to "create" a stablecoin out of BTC, despite its widely varying valuation. Lets say I set up a senior set of notes: it stays at $1 as long as BTC stays above $10,000. But what about all the "risky part" ? Well, someone out there in the world wants to bet it all on the risky part. When BTC rises from $10,000 to $50,000, they want to make $40,000 with $0 investment. Because the "senior" guy already took the risks for $10,000 and below, I can now offer the "rest of the gains" to the junior guy, who can play with all the values of BTC above $10,000 (except, without having to pay any money in the first place). When BTC goes up to $20,000, the junior guy spent $0 and made $10,000. Senior guy still has $10,000. When BTC goes up to $50,000, junior guy now has $40,000 and senior guy has $10,000. This sounds hypothetical, but its in fact very similar to how the stablecoin TITAN / IRON was structured, with Titan as the "senior" stablecoin and Iron as the junior. Now just wrap it all up in a smart contract, maybe tie the concept to Ethereum (or whatever other cryptocoin suits your fancy), and you too can reinvent senior/junior debt structures and pretend you're a genius. ------ You see? Senior is "just" the stablecoin guy. Junior is the WSB idiot who might lose all of his money. Or in other terms: your CDO of CDOs is truly and 100% secure. You may have a pile of shit, but you can extract stable values out of it. Or at least, so went the theory of 2008 housing crisis, CDOs, and CDSes and all that. We know where that went however. It hasn't even been 13 years and everyone's forgotten about the underlying assumptions that broke the market in the 00s.

null_object 5y ago
> When BTC goes up to $20,000, the junior guy spent $0 and made $10,000. Senior guy still has $10,000. When BTC goes up to $50,000, junior guy now has $40,000 and senior guy has $10,000. You used a lot of words to describe a Ponzi scheme.
- dragontamer 5y ago
  I'm describing a CDO scheme. Its important to remember the difference. Ponzi is a very, very different structure. CDOs do well as long as the underlyings don't crash beyond a certain value. The "junior" guys have lots of risk (and they _WANT_ the risk and enjoy it). The "senior guys" think they're safe. Indeed: senior/junior is roughly how we split up fiat dollars: banks do this with our money all the time (under tight regulations of course, to ensure that the banks are following the rules). Senior/junior can work, but in practice... someone out there will want to cheat the system. At that point, it all comes crashing down. Regulating the heck out of banks to ensure that no one cheats is a big part of the solution.
  - hestefisk 5y ago
    Very interesting. Can you recommend any good books on this topic to learn more?
    - dragontamer 5y ago
      For 2008, I think one of the most approachable references is the PBS "Inside the Meltdown": https://www.pbs.org/wgbh/pages/frontline/meltdown/ https://www.pbs.org/wgbh/pages/frontline/meltdown/ * https://www.pbs.org/wgbh/frontline/film/meltdown/ https://www.pbs.org/wgbh/frontline/film/meltdown/ The 2012 lookback has a bit more depth, since it had more time to do interviews and stuff: https://www.pbs.org/wgbh/frontline/film/money-power-wall-street/ https://www.pbs.org/wgbh/frontline/film/money-power-wall-str... There's of course, "The Big Short" if you want a stupid 2-hour movie. But that movie glosses over so many details and is straight up hyperbole at many points... so its not "realistic" but maybe a better thing to watch if you really don't want to put in much effort? ------- I guess my post was based off of the Bloomberg blogpost "Looking for Tether’s Money" by Matt Levine. So read that for my original inspiration, though you may need a Bloomberg subscription to be able to read it.

seph-reed 5y ago

Even less than people want to hear that gold is just shiny dirt, people don't want to hear that almost all perceptions of value are inherently subjective and meaningless. That social credit, and money, and everything we hold dear and true is just narrative we've crafted around ourselves to cope with the uncaring void that is the cosmos. So -- my guess -- people are probably going to keep thinking that things are valuable so long as everyone else around them does. And technically everything can be reduced to nothing more than a set worthless human brain farts. Edit: except for your values of course. Whoever you are, your values are certainly meaningful, and your life is a story that really matters.

playpause 5y ago
Where do you get that people “don’t want to hear” this? I find it’s a tedious revelation that people seem to love having. Yes, things are only valuable if people believe they’re valuable. Deep. So what though?
- seph-reed 5y ago
  So every emotion except confusion is inherently just a person over-simplifying their reality. All the fighting: it's fucking stupid.

Oberbaumbrucke 5y ago

A Pet rock

silentsea90 5y ago

There's a canonical toxic response to this = HFSP. I don't like that because we're all still learning. I hope you see how the money printer is making scarce assets outside of Govt manipulation more valuable. The Bitcoin rabbit hole goes deep. You're right in that stablecoins might actually be worthless in the long run since they're backed by USD which might be worthless in due course of time. Zoom out of the day to day movement - we're in price discovery stage where nothing makes sense in the short term.

NikolaNovak 5y ago
>>There's a canonical toxic response to this = HFSP. I don't feel this was your actual response, but I still need to address it because I don't understand how anybody ever can have that as a remotely legitimate, thought-out response. How can any financial instrument/currency make everybody "rich", in any real terms? If you gave everybody million USD tomorrow, it'd crash so bad that we'd be right back where we came from. Is there anybody that believes that we could all invest fiat money into X.coin, and after some period of time, we'd all be rich? If so, how? What wonderful value does it produce, what mechanism would magically elevate all without disruption? From where I'm sitting, any currency or investment is a re-distribution of wealth/money/value. A person who bought X.coin yesterday can only derive/extract value tomorrow if somebody else buys it for more. We didn't gain/extract/create value out of thin air by virtua of fintech, it's a simple exchange. So what if everybody DID get some X.coin, so that nobody did "HFSP"? What'd happen then?
- whatshisface 5y ago
  >How can any financial instrument/currency make everybody "rich", in any real terms? By organizing economic activity in a more efficient way than our present system of centrally planned debt supplies. That's what currency is "for" - organizing real activities.
  - Muromec 5y ago
    So what kinds of economic activities, besides ransom, drug sales and donations to wikileaks and others not liked by u.s. government does bitcoin facilitate? Remittances to countries under repressive economical regime or under embargo? Not saying those are good or bad, just aiming to quantify the market size.

satellite2 5y ago

You have to be careful with your choice of words. Especially on an engineering / science forum. The word "proven" implies a definitive certainty backed by solid theoretical foundation and a massive body of evidence. Very few things are proven in social science and economics. And most of them are simply definition. You are free to express your opinion though, but please mark it as such and make at least a small effort to explain how you reached it as otherwise your post is not adding value to the conversation.

mmaunder 5y ago
This public official laying down rules “you are free to… but please” tone has become commonplace on HN in the past few years. Anyone know the origin? Perhaps a shift in public enthusiasm for controlling speech? Did it start at universities? It seemed to just show up one day around 2018. It’s incredibly distracting.
- alonsonic 5y ago
  The audience of hackernews has grown and old users are trying to maintain the culture of the site. The value of this site comes from its community. Let's not turn it into reddit. I personally welcome this type of policing.
  - nostrademons 5y ago
    There's a certain irony in creation dates here: mmaunder: 2007. satellite2: 11 months ago. dexwiz: 2015. alonsonic: 2016. burnished: 8 months ago. nostrademons: 2007. Anyway, I don't think such tone-policing is all that off-culture for HN, nor do I mind it all that much. PG explicitly said back around 2008 that posts which keep the discourse civil and intellectually honest are welcome even if they don't directly add content. I just thought that there's a certain irony about "old users trying to maintain the culture of this site" when the users in question are less than a year old and are responding to someone who's been here for 14 years.
    - 5y ago

biztos 5y ago

I just went through the process of buying something expensive in a "trustless" system in an IRL country. It was pretty painful and very expensive -- I paid $300 just to get a guaranteed check cut! Of course this is a trivial problem to solve with smart contracts, if you can have things like real-life identity and real-life money mapped to them. While I don't think any of the crypto stuff out there today solves any of these problems realistically, at least Ethereum sure looks like an experiment in that direction. That a lot of people are getting rich speculating on crypto absolutely triggers my FOMO, and sometimes my disdain (cf. certain NFT sales) -- but I definitely wouldn't call it worthless. Some day we may have free, secure, trustless escrow via smart contracts, and a bunch of other neat stuff. I think that's unlikely to be on any of the current networks, but I also think we'll get it decades earlier because of them.

throwawaygh 5y ago
> Of course this is a trivial problem to solve with smart contracts, if you can have things like real-life identity and real-life money mapped to them. This reminds me of talking to a salesperson at $BIG_CO about their "blockchain platform cloud" offering for "ending inventory tracking system inaccuracy problems once and for all". I could never figure out how cryptography was supposed to help with the "is the physical thing actually where it's supposed to be in the physical warehouse" problem. That seemed like the non-trivial part. Everything else you could just do with a flat-file CSV or whatever. The free drinks were nice.
jollybean 5y ago
"Of course this is a trivial problem to solve with smart contracts, " No, it doesn't. The 'contract' was never the issue really. We need a judicicial and regulatory system in which the contract is valid, the means to redress issues, undo transactions. Now, $300 is probably too much to move money and speaks to the incumbency of financial actors ... but a good chunk of that cost is actually the reality of the fact that it takes a lot of very smart, very conscientious and super 'small-c' conservative running financial infrastructure. I think regular fintech startups will beat down that $300 cost faster than crypto will.

nscalf 5y ago

Amazing how many people are die hard advocates of being closed minded. The net market for crypto hits over a trillion dollars, and you still say things like this declaring they are proven to be worthless. This is posted on a report by the US government on a technology that is effectively a digital wrapper to use the US dollar easily online. How is there no worth in that? Out of curiosity, what would it take to change your mind on this? Is there not even a single dollar of real value in the crypto world?

ForHackernews 5y ago
Monero and other privacy coins have some real utility for enabling drug sales, tax evasion and ransomware. In terms of above-board use cases, I'm deeply skeptical.
mosdl 5y ago
I can already use the us dollar easily online.
- lowkey 5y ago
  Yes, but you likely live in a first-world country with generous options for banking. Bitcoin can serve anyone anywhere, regardless if they live in a privileged country or not. Try using your USD bank to send/receive money as a citizen of Iran or Libya or Nigeria. There are over 1 billion unbanked in the world today. They cannot use the US dollar easily online.
  - SavantIdiot 5y ago
    This is the fallback argument crypto enthusiasts use when their primary arguments fail. I'd like to learn more about the truth to this claim.
    - lowkey 5y ago
      I work on an international team and 2 of our devs are based in Nigeria. Nigeria currently suffers from 16% annual inflation and so the people have flocked to crypto as a store of value. Over 20% of the population uses cryptocurrencies. There are many more examples including Venezuela, Iran, the West Bank, and El Salvador.

sharperguy 5y ago

I think it would be helpful here to compare the theory of a ponzi scheme to that of bitcoin. In the beginning, buyers buy into a ponzi scheme because of a story that the creators are telling about their scheme. As time goes on, people buy in because the early investors are making a ton of money, as the value of the asset begins to skyrocket. Later on, people buy in because of previous hype, even though returns are actually beginning to level off, people don't notice. In the end, returns start to go negative, and the asset plummets, because nobody else has any reason to buy the asset anymore. With bitcoin the theory goes: In the beginning, buyers buy into bitcoin because of the vision and idea of a decentralized currency made by an anonymous hacker on the internet. As time goes on, people buy in because the early investors are making a ton of money, as the value of the asset begins to skyrocket. Later on, people buy in because of previous hype, even though returns are actually beginning to level off. In the end, however, due to the properties of the currency, and its penetration throughout the population, people continue to buy even though there is little profit to be made anymore. It has been shown to be a better long term store of value than fiat currency, but with similar liquidity, unlike other assets with higher returns such as bonds and real estate. It can be easily transferred around the globe and is highly divisible, making it useful for payments large and small, avoiding complex VISA networks and regulatory red tape. Due to its enforced scarcity, it isn't possible to create any more of it, and so it maintains its high price rather than simply being overproduced back down to a lower valuation.

neaanopri 5y ago
Nice balanced take, though you're leaving out the incredibly harmful environmental impact
swader999 5y ago
A ponsi scheme is fundamentally different than a market. With a market one day you trade five USD for one BTC. The next the best offer your able to get from anyone might be two USD for one BTC. That's just the nature of any market for anything. Value for anything depends on who comes to the market and their bias. A ponsi scheme is nefarious and more of a shell game. When the asset is gone, it's really gone and not coming back. There eventually aren't units to redeem because the originator took the aasset. If BTC or crypto were a ponsi the analogy would be satoshi hacking your wallet and draining your funds. In traditional crypto there aren't returns, there's just potential for it's perceived value relative to a base like the USD to change.

swarnie 5y ago

While absolutely correct you've picked the wrong audience and you know it.

deleted 5y ago

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dang 5y ago

You broke the site guidelines badly — first with the shallow dismissal, and then with the off-topic complaint about downvotes and name-calling. If you'd please review https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and stick to the rules when posting here, we'd appreciate it. We detached this subthread from https://news.ycombinator.com/item?id=29072552 https://news.ycombinator.com/item?id=29072552. (p.s. This is just about comment quality and HN guidelines - not any position on the underlying topic)

young_unixer 5y ago

Who said speculation is making everyone money? Some people are going to lose money, specially those who buy at the top. And the fact that millions of people are willing to pay 60000 USD for one of these coins proves that they aren't really "worthless". Is the dollar worthless because you can't use it to buy the same things you could buy in 1995 with the same amount?