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I think the problem here is that "the economy" is not punishing miners but rewarding them. Only a small minority of people who buy crypto genuinely have a cons

I think the problem here is that "the economy" is not punishing miners but rewarding them. Only a small minority of people who buy crypto genuinely have a considered belief that it's socially useful. The overwhelming majority are simply speculators who believe that they can sell it for more than they bought it for.

roenxi 5y ago
> ...speculators who believe that they can sell it for more than they bought it for... Which, assuming that the individual speculators are intelligent and rational, has the emergent property of providing something that is socially useful. And if they are stupid and irrational, it'll bankrupt the lot of them so that they can't waste that much money again. The economy is a cruel beast, but it is much better than you or I at deciding what needs to happen to get people what they need. If something like bitcoin really is just a money burning exercise with no redeeming property, sooner or later it'll go bankrupt and disappear back into obscurity. It can't be a hot new thing forever. And "speculators" only have power when they are consistently right. If they routinely make big gambles and get it wrong then they don't get to speculate for long.
- randalluk 5y ago
  As the article says >Libertarianism's attraction is based on ignoring externalities, and cryptocurrencies are no exception. The economy as currently regulated doesn't correctly price in externalities such as the ongoing cost of global heating generated by burning fossil fuels.
  - ericd 5y ago
    Sure. Bring on the carbon taxes.
  - roenxi 5y ago
    I'm all for including externalities. My usual argument is if you look at positive and negative externalities, fossil fuels are a massive win. People seem to struggle with positive externalities so the argument usually falls flat, and the situation is too clear to me to be able to spell it out easily. But without fossil fuels, 40-80% of the modern world would have been all but impossible. The knock-on effects of abundant cheap energy (and precursor materials to plastics) aren't being priced in.
    - munch117 5y ago
      The 'positive externalities' of fossil fuels are already accounted for in our economic system: When mining for raw materials, the price that the miner is paid in the first sale is payment for that. And ditto in every subsequent sale: The benefits to the buyer goes into setting the price. I am not an expert on economics nomenclature, but ISTM you can't really call that externalities when it's already being rewarded by the current economic system. Wouldn't that be an "internality" or something? They are already included. Unlike the negative externalities from pollution. In the absence of something like a carbon tax, they are not included.
      - roenxi 5y ago
        I've never bought any oil directly. It is beyond question that if oil & gas producers disappeared I'd be much worse off (it'd be physically quite difficult for me to get food, for example, and I'd likely starve to death). That is the informal definition of an externality right there; my entire lifestyle is being enabled by a deal that I'm not party to. And even if I've got the definition wrong, the oil and gas producers are creating huge amounts of value that are being captured by other actors in the economy (like me). If we fairly evened out the harms and benefits, they deserve subsidies rather than taxes. Obviously nobody sane is going to advocate for that, but if we want to price in externalities that is the logical outcome. This isn't obscure logic. People often point out that the measurable value of what blue collar workers produce is far in excess of their pay and follow it up with the idea that we should force the market to pay them more. It isn't a good idea but it is logical in as far as it goes.
        munch117 5y ago
        Sure. Fossil fuels are valuable to society. They made the industrial revolution possible. If they were to disappear tomorrow, much hardship would ensue. They are, however, overused, because the negative externalities are not properly accounted for. > And even if I've got the definition wrong, the oil and gas producers are creating huge amounts of value that are being captured by other actors in the economy (like me). That's how all market transactions work: Whenever you buy something, it's because the value you derive from the purchase is higher than the price you pay. All business has this value-add aspect. When you buy a jacket so you don't freeze to death in the winter, that doesn't mean you are beholden to the clothes manufacturer for your life.
- derac 5y ago
  This is flawed libertarian thinking. For example, if a scammer called your grandmother and got her to send them her life savings, it wouldn't be a good thing just because she is "too stupid" to have the money.
  - roenxi 5y ago
    The logic does break down for criminal activity. But: (1) Mr. Wog93 was talking about speculators, not criminals. (2) If any of my grandmothers were still alive then they could be scammed in any asset class. Bitcoin is riskier but, frankly, anyone crazy enough to "invest" in bitcoin is probably going to lose all their money regardless of whether they get scammed or not. So this grandmother test is a bit of a wash in my eyes. The only thing that makes me special is I'm humble enough to say maybe I'm completely wrong in my opinions so other people should be allowed to take risks I think are stupid. There is a fair-enough system that will sort out who is right and who is wrong based on evidence.
    - AussieWog93 5y ago
      >Mr. Wog93 Thank you for using my correct title.
inter_netuser 5y ago
>Only a small minority of people who buy stocks genuinely have a considered belief that it's socially useful. The overwhelming majority are simply speculators who believe that they can sell it for more than they bought it for. Replaced crypto with stocks, how does it read now?
- meheleventyone 5y ago
  Pretty spot on, it’s a fairly popular criticism of the stock market that it’s disconnected from providing much social utility. For example that some companies have massively outsized valuations.
  - inter_netuser 5y ago
    small people invest money in hopes of being less poor. They never get truly wealthy doing that. The ultra-wealthy deploy or deny capital to mold the society to their views. "Social utility" is just this mind virus the ultra-wealthy spread in everyone's mind to make their rule-by-proxy feudalism palatable to the peasant class.
    - meheleventyone 5y ago
      If that were the case we'd all think the stock market had amazing social utility because it literally benefits the ultra-wealthy the most.
      - inter_netuser 5y ago
        Stock markets are tiny compared to private equity and privately held biz and real estate. but to your point, you are exactly correct. Stock markets is a game, designed to methodically transfer wealth from the peasant pockets to the ultra-wealthy that write the rules of the game. One, and most common, game is to have peasants as suckers of the last resort and have their pension funds buy all kinds of garbage because "mandates". Why would anyone want to hold negative yielding debt? But they do.

roenxi 5y ago

> ...speculators who believe that they can sell it for more than they bought it for... Which, assuming that the individual speculators are intelligent and rational, has the emergent property of providing something that is socially useful. And if they are stupid and irrational, it'll bankrupt the lot of them so that they can't waste that much money again. The economy is a cruel beast, but it is much better than you or I at deciding what needs to happen to get people what they need. If something like bitcoin really is just a money burning exercise with no redeeming property, sooner or later it'll go bankrupt and disappear back into obscurity. It can't be a hot new thing forever. And "speculators" only have power when they are consistently right. If they routinely make big gambles and get it wrong then they don't get to speculate for long.

randalluk 5y ago
As the article says >Libertarianism's attraction is based on ignoring externalities, and cryptocurrencies are no exception. The economy as currently regulated doesn't correctly price in externalities such as the ongoing cost of global heating generated by burning fossil fuels.
- ericd 5y ago
  Sure. Bring on the carbon taxes.
- roenxi 5y ago
  I'm all for including externalities. My usual argument is if you look at positive and negative externalities, fossil fuels are a massive win. People seem to struggle with positive externalities so the argument usually falls flat, and the situation is too clear to me to be able to spell it out easily. But without fossil fuels, 40-80% of the modern world would have been all but impossible. The knock-on effects of abundant cheap energy (and precursor materials to plastics) aren't being priced in.
  - munch117 5y ago
    The 'positive externalities' of fossil fuels are already accounted for in our economic system: When mining for raw materials, the price that the miner is paid in the first sale is payment for that. And ditto in every subsequent sale: The benefits to the buyer goes into setting the price. I am not an expert on economics nomenclature, but ISTM you can't really call that externalities when it's already being rewarded by the current economic system. Wouldn't that be an "internality" or something? They are already included. Unlike the negative externalities from pollution. In the absence of something like a carbon tax, they are not included.
    - roenxi 5y ago
      I've never bought any oil directly. It is beyond question that if oil & gas producers disappeared I'd be much worse off (it'd be physically quite difficult for me to get food, for example, and I'd likely starve to death). That is the informal definition of an externality right there; my entire lifestyle is being enabled by a deal that I'm not party to. And even if I've got the definition wrong, the oil and gas producers are creating huge amounts of value that are being captured by other actors in the economy (like me). If we fairly evened out the harms and benefits, they deserve subsidies rather than taxes. Obviously nobody sane is going to advocate for that, but if we want to price in externalities that is the logical outcome. This isn't obscure logic. People often point out that the measurable value of what blue collar workers produce is far in excess of their pay and follow it up with the idea that we should force the market to pay them more. It isn't a good idea but it is logical in as far as it goes.
      - munch117 5y ago
        Sure. Fossil fuels are valuable to society. They made the industrial revolution possible. If they were to disappear tomorrow, much hardship would ensue. They are, however, overused, because the negative externalities are not properly accounted for. > And even if I've got the definition wrong, the oil and gas producers are creating huge amounts of value that are being captured by other actors in the economy (like me). That's how all market transactions work: Whenever you buy something, it's because the value you derive from the purchase is higher than the price you pay. All business has this value-add aspect. When you buy a jacket so you don't freeze to death in the winter, that doesn't mean you are beholden to the clothes manufacturer for your life.
derac 5y ago
This is flawed libertarian thinking. For example, if a scammer called your grandmother and got her to send them her life savings, it wouldn't be a good thing just because she is "too stupid" to have the money.
- roenxi 5y ago
  The logic does break down for criminal activity. But: (1) Mr. Wog93 was talking about speculators, not criminals. (2) If any of my grandmothers were still alive then they could be scammed in any asset class. Bitcoin is riskier but, frankly, anyone crazy enough to "invest" in bitcoin is probably going to lose all their money regardless of whether they get scammed or not. So this grandmother test is a bit of a wash in my eyes. The only thing that makes me special is I'm humble enough to say maybe I'm completely wrong in my opinions so other people should be allowed to take risks I think are stupid. There is a fair-enough system that will sort out who is right and who is wrong based on evidence.
  - AussieWog93 5y ago
    >Mr. Wog93 Thank you for using my correct title.

inter_netuser 5y ago

>Only a small minority of people who buy stocks genuinely have a considered belief that it's socially useful. The overwhelming majority are simply speculators who believe that they can sell it for more than they bought it for. Replaced crypto with stocks, how does it read now?

meheleventyone 5y ago
Pretty spot on, it’s a fairly popular criticism of the stock market that it’s disconnected from providing much social utility. For example that some companies have massively outsized valuations.
- inter_netuser 5y ago
  small people invest money in hopes of being less poor. They never get truly wealthy doing that. The ultra-wealthy deploy or deny capital to mold the society to their views. "Social utility" is just this mind virus the ultra-wealthy spread in everyone's mind to make their rule-by-proxy feudalism palatable to the peasant class.
  - meheleventyone 5y ago
    If that were the case we'd all think the stock market had amazing social utility because it literally benefits the ultra-wealthy the most.
    - inter_netuser 5y ago
      Stock markets are tiny compared to private equity and privately held biz and real estate. but to your point, you are exactly correct. Stock markets is a game, designed to methodically transfer wealth from the peasant pockets to the ultra-wealthy that write the rules of the game. One, and most common, game is to have peasants as suckers of the last resort and have their pension funds buy all kinds of garbage because "mandates". Why would anyone want to hold negative yielding debt? But they do.