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Since this seems to be yet another HN comment thread filled with people who feel really smart for dismissing the potential of cryptographic digital currencies a

by numair 5y ago

Since this seems to be yet another HN comment thread filled with people who feel really smart for dismissing the potential of cryptographic digital currencies and the emerging liquid market for these digital assets, I'll just copy and paste my thoughts (which I might end up having to do often, since these sort of crypto-hate-fests are now popping up on HN at a rate of several per day): > Money moves fast in the crypto world. It’s “minted.” It’s “burned.” It’s earned. It’s hacked. It’s fundraised. It’s parked into a failed DAO. It’s gambled away. It’s up on a 100x leveraged return. It’s wiped out in a margin call. It’s up 20% — oh wait, now it’s flash-crashed down 30%. It’s unstable, risky, prone to failure — and it’s exactly what the global economy needs. We need ways to convince capital to move around in new and weird ways. We need to get money into the hands of different sets of hands way more often than we’ve been doing. We need to experiment, to be right, to be wrong, to be doing things with money. That’s what capital productivity is all about. Money isn’t supposed to sit in a bank feeling “safe;” it’s supposed to be running around, acting young and risky, learning new things and creating new opportunities. https://numair.medium.com/the-intelligent-case-for-crypto-43e60cfb57f3 https://numair.medium.com/the-intelligent-case-for-crypto-43...

Gys 5y ago
> Money isn’t supposed to sit in a bank feeling “safe;” it’s supposed to be running around, acting young and risky, learning new things and creating new opportunities. But how is this different for crypto currencies compared to fiat currencies? From what I understand by far most crypto capital does not move at all?
- numair 5y ago
  Quite the opposite. Check the moves on the exchanges, and you’ll see that the velocity of capital is truly unmatched. This is exactly why lots of very serious asset managers and quant shops have jumped in — crypto is becoming the major leagues, and making TradFi look like a minor league game, scary-fast.
vanusa 5y ago
That’s what capital productivity is all about. No, it's about investing money (and other resources) into endeavors that create actual goods and and services. The crypto world is (absent a few marginal use cases) almost entirely about derivatives and speculation - and of course money laundering and ransomware. That is to to say: the very opposite of the intrinsic purpose (to the extent that it has one) of capital. It’s unstable, risky, prone to failure — and it’s exactly what the global economy needs. I have an even better catchphrase for you: "It’s unstable, risky, prone to failure — in other words, pure nihilism, baby! And it’s exactly what the global economy needs."
- numair 5y ago
  That is a very simplistic view of a large, rapidly evolving asset class. Your “few marginal use cases” will grow into the most important use cases of the entire economy — and no, we don’t yet know exactly what those are. Surely you understand how compounding growth works, right?
tsimionescu 5y ago
> Money isn’t supposed to sit in a bank feeling “safe;” it’s supposed to be running around, acting young and risky, learning new things and creating new opportunities. Money is supposed to go into Capex and Opex - those are proof that people are producing things. When money is put into a bank, or stock, or a Blockchain, the company who put it there is not doing anything useful with it. Sure, it's possible that someone lending, or selling shares, or selling crypto, is going to do something with that money, but those are already second-order effects. And of course, the ones on the other side of the transaction may well be putting it back again into banking, stocks, or crypto speculation - money spinning endlessly around, going nowhere.
- numair 5y ago
  Unless you have a birds’-eye view of the entire global economy and all uses of crypto in the market right now, there is no way you can make such a blanket statement with such certainty.
  - tsimionescu 5y ago
    The same is true for the original claim. Unless we have a bird's eye view of the entire economy, the only direct measure of money getting converted to useful economic activity is Capex (and Opex). The volume of BTC, or bank deposits/lending, or stock markets - they are all hard to correlate with economic activity.
kungito 5y ago
It's about doing things for money, not with the money itself. Moving cash around does not benefit anyone. My biggest fear is tax avoidance with crypto. You lose the main way to continuously return the money into the "people money pool". People say governments waste and steal money, but it's a people problem and this is the best mechanism we have

by numair 5y ago

Gys 5y ago

> Money isn’t supposed to sit in a bank feeling “safe;” it’s supposed to be running around, acting young and risky, learning new things and creating new opportunities. But how is this different for crypto currencies compared to fiat currencies? From what I understand by far most crypto capital does not move at all?

numair 5y ago
Quite the opposite. Check the moves on the exchanges, and you’ll see that the velocity of capital is truly unmatched. This is exactly why lots of very serious asset managers and quant shops have jumped in — crypto is becoming the major leagues, and making TradFi look like a minor league game, scary-fast.

vanusa 5y ago

That’s what capital productivity is all about. No, it's about investing money (and other resources) into endeavors that create actual goods and and services. The crypto world is (absent a few marginal use cases) almost entirely about derivatives and speculation - and of course money laundering and ransomware. That is to to say: the very opposite of the intrinsic purpose (to the extent that it has one) of capital. It’s unstable, risky, prone to failure — and it’s exactly what the global economy needs. I have an even better catchphrase for you: "It’s unstable, risky, prone to failure — in other words, pure nihilism, baby! And it’s exactly what the global economy needs."

numair 5y ago
That is a very simplistic view of a large, rapidly evolving asset class. Your “few marginal use cases” will grow into the most important use cases of the entire economy — and no, we don’t yet know exactly what those are. Surely you understand how compounding growth works, right?

tsimionescu 5y ago

> Money isn’t supposed to sit in a bank feeling “safe;” it’s supposed to be running around, acting young and risky, learning new things and creating new opportunities. Money is supposed to go into Capex and Opex - those are proof that people are producing things. When money is put into a bank, or stock, or a Blockchain, the company who put it there is not doing anything useful with it. Sure, it's possible that someone lending, or selling shares, or selling crypto, is going to do something with that money, but those are already second-order effects. And of course, the ones on the other side of the transaction may well be putting it back again into banking, stocks, or crypto speculation - money spinning endlessly around, going nowhere.

numair 5y ago
Unless you have a birds’-eye view of the entire global economy and all uses of crypto in the market right now, there is no way you can make such a blanket statement with such certainty.
- tsimionescu 5y ago
  The same is true for the original claim. Unless we have a bird's eye view of the entire economy, the only direct measure of money getting converted to useful economic activity is Capex (and Opex). The volume of BTC, or bank deposits/lending, or stock markets - they are all hard to correlate with economic activity.

kungito 5y ago

It's about doing things for money, not with the money itself. Moving cash around does not benefit anyone. My biggest fear is tax avoidance with crypto. You lose the main way to continuously return the money into the "people money pool". People say governments waste and steal money, but it's a people problem and this is the best mechanism we have