5 ms·

Capital in general is a paperclip maximizer, not just Bitcoin. All investors are slaves to their capital that takes a mind of its own, a sort of real-world Egre

Capital in general is a paperclip maximizer, not just Bitcoin. All investors are slaves to their capital that takes a mind of its own, a sort of real-world Egregore. Bitcoin is a flagrant example of this property of capital.

mib32 5y ago
I also like to think of it as something analogous to drug addiction with the dopamine positive feedback loop.
- arcticbull 5y ago
  Crypto is the crystal meth of finance. Capital completely divorced from labor.
  - dvt 5y ago
    In that sense, crypto is exactly the same as forex, money markets, equities markets, futures markets, derivatives markets, etc. We haven't been coupling markets with labor for like 300 years now.
    - arcticbull 5y ago
      Not at all. Forex yes, futures yes, derivatives yes - these are speculative or hedging instruments. Not investments. I've never heard anyone advocate people HODL /NQ futures in their investment account and borrow against them as an investment strategy. Let alone calling them "the future of money." But this is basically what crypto is. Money market funds aren't investments, they're cash equivalents, but they still facilitate lending. They're the present of money. Equities are positive-sum instruments where you purchase a fractional ownership stake in a business that employs people and uses the revenue from their business to return capital to investors in the form of dividends, buybacks or intrinsic value appreciation. Their performance is inherently tied to labor. These are not at all the same thing.
      - dvt 5y ago
        > Not investments. The idea that there's any viable technical reasoning behind TSLA trading as high as it is, or behind what happened with GME and AMC last year is simply fanciful. It's like you've never seen an IPO pump and dump. It's literally the exact same market behavior you saw with ICOs; side-note: it's even worsened now with the advent of SPACs. Yeah, you can argue until the cows come home that "equities are positive-sum instruments where you purchase a fractional ownership stake in a business," but that doesn't mean that hedge funds won't treat them as speculative instruments, particularly around earnings calls. Or that hedge funds won't try to spin the narrative to justify their risky positions (e.g.: the short squeeze on GME). Again, just to reiterate: the markets are almost completely decoupled from labor (for better or for worse). It's all speculation (to certain degrees).
        arcticbull 5y ago
        Again you're conflating a bunch of unrelated concepts. Equities may trade above a fair valuation - individually, or as a group. That doesn't mean they're not as a group positive-sum instruments. You may lose money on a positive-sum instrument. They're also not money, and never claimed to be. You're forcing a narrative around short timeframes. Equity markets are tied to the performance of the business in the full course of time which is tied to labor. Crypto like futures and options are zero-sum or negative-sum instruments if you include the rake. Every dollar in appreciation comes from a new investor. Every, single, one. That's the difference. It's just trading bags of air back and forth.
        dvt 5y ago
        > Equity markets are tied to the performance of the business in the full course of time which is tied to labor. They're not though, and they haven't been for centuries. I gave you 3 examples off the top of my head. Markets are tied to sentiment; let me refer you to the Keynesian beauty contest[1]. This is very basic economic theory. > Crypto like futures and options are zero-sum or negative-sum instruments if you include the rake. Every dollar in appreciation comes from a new investor. Every, single, one. That's the difference. There is no "rake" in crypto, so I'm not even sure what you mean by that. Second, every dollar in appreciation on a decentralized exchange (say, SushiSwap) is a result of the automated market maker's supply and demand response. This is functionally exactly the same as what happens with order books (like on the stock market) but it just happens to use liquidity pools to facilitate this (because volume is much lower). For every seller, there's a buyer, and for every buyer, there's a seller: that's how markets work. Third, crypto is actually not at all like options because whereas option contracts can expire worthless (e.g. they run out of time and can no longer be exercised), if you buy some poopcoin, even if it tanks, you'll still own said coin (kind of like a penny stock). > It's just trading bags of air back and forth. This might be true, but people trade all kinds of things I personally find dumb (Pokémon cards, rare sneakers, etc.). Looks like a lot of people see value in cryptocurrency, who am I to judge. [1] https://en.wikipedia.org/wiki/Keynesian_beauty_contest https://en.wikipedia.org/wiki/Keynesian_beauty_contest
unkulunkulu 5y ago
I will risk taking downvotes for not meaningful post, but thank you for this message, really. It is a good connection (the paper clip maximizer <-> capital, I will have to familiarize myself with Egrogore still :) up: Oh my god, capital as an emergent bigger entity, ok, ok, now I'm scared, thank you :) up2: So you either fuel it or not, choices choices up3: This is such a beautiful thing we are all mixed up in, don't you think?
dnautics 5y ago
Isn't this statement trivially true for any sort of social system, where you can stand in social capital for Capital.
- elmomle 5y ago
  Capital has tended to trump social capital in the long term, particularly since sufficient capital can shape the public discourse.
  - dnautics 5y ago
    Economic capital is interesting because 1) it's not a zero sum game. Most exchanges of economic capital result in the betterment of both parties. 2) in order to get some, you usually provide a good or service to someone else. These things are not necessarily true of other forms of social capital; you can definitely accrue political capital by killing people (or in a less dramatic sense, by being feared by people).
    - tablespoon 5y ago
      > Most exchanges of economic capital result in the betterment of both parties. 2) in order to get some, you usually provide a good or service to someone else. It's easy to misread that as something like everybody wins, but it's worth noting that such exchanges can still be extremely exploitative.
      - dnautics 5y ago
        Exploitativeness is extremely ill-defined and often used to push an agenda that is not really aligned with the interest of the party "being exploited". In any case, acknowledging that exchanges can be "unfair" for some definition of "unfair", I did use the word "Most". Capitalism/free markets do not guarantee that humans are not shitty but I challenge you to find a social system that does.
        5y ago
andrecarini 5y ago
People in general are paperclip maximizers, not just Capital. All people are slaves to their desires that takes a mind of its own, a sort of real-world Incentives System. Chasing power (be it financial, social, political) is a flagrant example of this property of People. TL;DR: The problem isn't capital. It's humanity as a whole.
- sudosysgen 5y ago
  I think that this is just devolving the concept of "paperclip maximizer" past the point of absurdity. As I understand it, a paperclip maximizer is a device which has some utility function that it maximizes to an extreme point that it actually ends up providing negative utility to whoever built it or society in general. I don't see how humans doing what they want fits in there. People aren't slaves to their desires that have a mind of their own, people are the minds which make up desires and destroy them. On the other hand, a paperclip maximizer - or, I think, capital - has a singular desire, which is to make as many paperclips as possible or as much profit as possible, everything else be damned, forever.
api 5y ago
Cryptocurrency started as a challenge to financial capitalism and ended up becoming an absurdist parody of it.

mib32 5y ago

I also like to think of it as something analogous to drug addiction with the dopamine positive feedback loop.

arcticbull 5y ago
Crypto is the crystal meth of finance. Capital completely divorced from labor.
- dvt 5y ago
  In that sense, crypto is exactly the same as forex, money markets, equities markets, futures markets, derivatives markets, etc. We haven't been coupling markets with labor for like 300 years now.
  - arcticbull 5y ago
    Not at all. Forex yes, futures yes, derivatives yes - these are speculative or hedging instruments. Not investments. I've never heard anyone advocate people HODL /NQ futures in their investment account and borrow against them as an investment strategy. Let alone calling them "the future of money." But this is basically what crypto is. Money market funds aren't investments, they're cash equivalents, but they still facilitate lending. They're the present of money. Equities are positive-sum instruments where you purchase a fractional ownership stake in a business that employs people and uses the revenue from their business to return capital to investors in the form of dividends, buybacks or intrinsic value appreciation. Their performance is inherently tied to labor. These are not at all the same thing.
    - dvt 5y ago
      > Not investments. The idea that there's any viable technical reasoning behind TSLA trading as high as it is, or behind what happened with GME and AMC last year is simply fanciful. It's like you've never seen an IPO pump and dump. It's literally the exact same market behavior you saw with ICOs; side-note: it's even worsened now with the advent of SPACs. Yeah, you can argue until the cows come home that "equities are positive-sum instruments where you purchase a fractional ownership stake in a business," but that doesn't mean that hedge funds won't treat them as speculative instruments, particularly around earnings calls. Or that hedge funds won't try to spin the narrative to justify their risky positions (e.g.: the short squeeze on GME). Again, just to reiterate: the markets are almost completely decoupled from labor (for better or for worse). It's all speculation (to certain degrees).
      - arcticbull 5y ago
        Again you're conflating a bunch of unrelated concepts. Equities may trade above a fair valuation - individually, or as a group. That doesn't mean they're not as a group positive-sum instruments. You may lose money on a positive-sum instrument. They're also not money, and never claimed to be. You're forcing a narrative around short timeframes. Equity markets are tied to the performance of the business in the full course of time which is tied to labor. Crypto like futures and options are zero-sum or negative-sum instruments if you include the rake. Every dollar in appreciation comes from a new investor. Every, single, one. That's the difference. It's just trading bags of air back and forth.
        dvt 5y ago
        > Equity markets are tied to the performance of the business in the full course of time which is tied to labor. They're not though, and they haven't been for centuries. I gave you 3 examples off the top of my head. Markets are tied to sentiment; let me refer you to the Keynesian beauty contest[1]. This is very basic economic theory. > Crypto like futures and options are zero-sum or negative-sum instruments if you include the rake. Every dollar in appreciation comes from a new investor. Every, single, one. That's the difference. There is no "rake" in crypto, so I'm not even sure what you mean by that. Second, every dollar in appreciation on a decentralized exchange (say, SushiSwap) is a result of the automated market maker's supply and demand response. This is functionally exactly the same as what happens with order books (like on the stock market) but it just happens to use liquidity pools to facilitate this (because volume is much lower). For every seller, there's a buyer, and for every buyer, there's a seller: that's how markets work. Third, crypto is actually not at all like options because whereas option contracts can expire worthless (e.g. they run out of time and can no longer be exercised), if you buy some poopcoin, even if it tanks, you'll still own said coin (kind of like a penny stock). > It's just trading bags of air back and forth. This might be true, but people trade all kinds of things I personally find dumb (Pokémon cards, rare sneakers, etc.). Looks like a lot of people see value in cryptocurrency, who am I to judge. [1] https://en.wikipedia.org/wiki/Keynesian_beauty_contest https://en.wikipedia.org/wiki/Keynesian_beauty_contest

unkulunkulu 5y ago

I will risk taking downvotes for not meaningful post, but thank you for this message, really. It is a good connection (the paper clip maximizer <-> capital, I will have to familiarize myself with Egrogore still :) up: Oh my god, capital as an emergent bigger entity, ok, ok, now I'm scared, thank you :) up2: So you either fuel it or not, choices choices up3: This is such a beautiful thing we are all mixed up in, don't you think?

dnautics 5y ago

Isn't this statement trivially true for any sort of social system, where you can stand in social capital for Capital.

elmomle 5y ago
Capital has tended to trump social capital in the long term, particularly since sufficient capital can shape the public discourse.
- dnautics 5y ago
  Economic capital is interesting because 1) it's not a zero sum game. Most exchanges of economic capital result in the betterment of both parties. 2) in order to get some, you usually provide a good or service to someone else. These things are not necessarily true of other forms of social capital; you can definitely accrue political capital by killing people (or in a less dramatic sense, by being feared by people).
  - tablespoon 5y ago
    > Most exchanges of economic capital result in the betterment of both parties. 2) in order to get some, you usually provide a good or service to someone else. It's easy to misread that as something like everybody wins, but it's worth noting that such exchanges can still be extremely exploitative.
    - dnautics 5y ago
      Exploitativeness is extremely ill-defined and often used to push an agenda that is not really aligned with the interest of the party "being exploited". In any case, acknowledging that exchanges can be "unfair" for some definition of "unfair", I did use the word "Most". Capitalism/free markets do not guarantee that humans are not shitty but I challenge you to find a social system that does.
      - 5y ago

andrecarini 5y ago

People in general are paperclip maximizers, not just Capital. All people are slaves to their desires that takes a mind of its own, a sort of real-world Incentives System. Chasing power (be it financial, social, political) is a flagrant example of this property of People. TL;DR: The problem isn't capital. It's humanity as a whole.

sudosysgen 5y ago
I think that this is just devolving the concept of "paperclip maximizer" past the point of absurdity. As I understand it, a paperclip maximizer is a device which has some utility function that it maximizes to an extreme point that it actually ends up providing negative utility to whoever built it or society in general. I don't see how humans doing what they want fits in there. People aren't slaves to their desires that have a mind of their own, people are the minds which make up desires and destroy them. On the other hand, a paperclip maximizer - or, I think, capital - has a singular desire, which is to make as many paperclips as possible or as much profit as possible, everything else be damned, forever.

api 5y ago

Cryptocurrency started as a challenge to financial capitalism and ended up becoming an absurdist parody of it.