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The fact that you're the highest-ranked comment on this page shows that, at least for Hacker News, people are getting some sense knocked into them. 5-6 year ag

The fact that you're the highest-ranked comment on this page shows that, at least for Hacker News, people are getting some sense knocked into them. 5-6 year ago I'd get continually downvoted on Hacker News for comments like that.

f38zf5vdt 5y ago
My only problem with this description is that it also describes markets at large. Because markets are always intended to be exponentially growing in real value over time, any individual entering them and holding assets will accrue assets at a great amount than people who can not afford to. Over time this results in greater and greater accumulation of wealth into the hands of those who originally simply possessed more. This is a fact that has been evidenced by ever increasing amounts of wealth concentration in the hands of fewer and fewer individuals over the past 50 years. [1] Unfortunately, it seems cryptocurrency is a just an extension of the many of the systems we already have that are described in fiat amounts. https://www.newyorker.com/news/john-cassidy/pikettys-inequality-story-in-six-charts https://www.newyorker.com/news/john-cassidy/pikettys-inequal...
- throwaway82652 5y ago
  >Unfortunately, it seems cryptocurrency is a just an extension of the many of the systems we already have that are described in fiat amounts. Because cryptocurrency is also a fiat system where the money holds no real value and is manipulated by various entities, only the fiat is declared by a private group of computer nerds instead of the government.
- mjburgess 5y ago
  Err.... not quite. What you're describing is preferential attachment... ie., those with a large stake can multiply that stake producing ever larger amounts. This isn't a scam. If I give everyone in the comments $100k, by "next year" some will have $1m and some $0 -- and, in general, we'll all be a little better off. Its the nature of any advantage that it compounds, and compounding advantages of any kind produce dramatic inequalities (of sex, money, creative achievement, etc.). Bitcoin isnt a scam because it produces an unequal outcome -- any system which works to increase the general welfare will necessarily operate on and compound inequalities. It's a scam because as time passes the general welfare *does not increase*, indeed, it plummets! People holding coins arent opening factories, building houses, teaching people, etc. Nothing is happening. They're litterally just twiddling their thumbs. What's actually happening is that poorer fools are joining late in the game, whose money comes from actual labour... and supply the initial parasitical early-stakes with exit-cash. Ie., they wait for 10yr do nothing; you work for 1mo and do lots. Your productive labour becomes their exit. It's welfare for the rich. Inequality isnt the issue here. It's the particular type of "theft" taking place. It is, in a very real sense, an actual scam.
  - shuckles 5y ago
    Well in fairness some Bitcoin holders are building vast factories of mining capacity, and their argument is the mining is spent on pro-social anti-authoritarian censorship-free wealth movement. Other Bitcoin holders are putting in a lot of labor to create the most compelling narrative of a genuine rags to riches opportunity. Is there $5t or whatever in total market value to that? Not sure.
  - f38zf5vdt 5y ago
    How does that differ at all from the possession of any sparse, shelf-stable commodity that is in demand? For example, gold or palladium. An individual possessing palladium in the past 10 years would have seen a 400% increase in value. The people holding the metal aren't doing anything, it's just demand for it has increased and the value of fiat has decreased over time, so it is worth more. The same could be said for video games or pokemon cards. I guess maybe the argument is you can do something with metals or video games or pokemon cards. But it's hard to believe that a special Charizard has a utility permitting million dollar valuations.
    - ansible 5y ago
      There is hopefully no one out there that genuinely believes that a Charizard card is actually worth anything other than for entertainment. People are apparently willing to pay a lot for said entertainment, and the cachet of owning a rare card. And that's fine. Palladium is a genuinely useful material, and has significant industrial uses. If it gets expensive, that's just markets. If it gets too expensive, alternatives will be researched and hopefully developed. And that is fine. Crypto fraudsters are trying to tell us that their coin is legitimately useful for ... something, while it is actually an entertainment product. In my view, Doge is one of the few legit crypto coins because it was initially marketed as entertainment. People would donate Doge to each other for fun. Some of the file storage coins may also be legitimate, because you spend those on distributed storage, which is an actually useful service. But the majority of crypto coins and NFTs are marketed as something useful or a legitimate investment, when they are not.
  - quickcheque 5y ago
- eldaisfish 5y ago
  a major reason people recommend broad market index funds is that they have been proven to outpace inflation in the long run. As with all things, the key to making money in a capitalist system is having money to begin with. The stock market has in fact led to more people growing their wealth. While not perfect, it has come a long way from the days where only the wealthy could access it.
- gwbas1c 5y ago
  > Because markets are always intended to be exponentially growing That's because population grows exponentially. If we have a massive contraction in population I suspect a lot of common wisdom about economics won't hold true.
  - f38zf5vdt 5y ago
    A massive decrease in the value of human labor and human individual productivity due to robotics or AI might have a similar outcome.
    - Psyladine 5y ago
      While Ned Ludd's ghost might upvote this, I am as unconvinced of this as apparently everyone in this thread has always been of bitcoin. For starters, any increase of output with a decrease of input labor is by definition an increase of productivity, individual, net, all of it. For two, AI hasn't proven anything beyond quickly doing grunt labor. Quickbooks & Excel didn't put the CPA trade out of business, an algorithm that identifies a cat in a picture or whatever reduces overhead, not eliminating professions. Tangenitally I am, however, very excited at AI's prospects in reverse-engineering and rewriting code, a long-lived fantasy that we can actually un-fark many old or particular programs and systems that are currently hardware dependent or just not worth the man-hours to do the transcription from, say, 16 bit to 64 (or 128, or 256, wherever the future goes). Lastly, robots have been around since the 60s, industrially and standardized. They do good work, consistently, reduce cost and thus prices and floors of production. The automotive industry is bigger than ever, and more top heavy. This is good, no? No-one dreams of working on an assembly line for Ford, and unlike the common-wisdom ideal of teenagers & inexperienced workers starting in the service industry and working up & out to better professions, I don't know of anyone who realistically has a career plan of 20 to 60 working their way up from floor sweeper to head of district in any enterprise. There is this weird pessimism that comes on the tails of this breakthrough in labor leverage, that we're going to put ourselves out of work and have to sit around and then starve to death or get UBI because we're incompetent, when 100 years ago the plurality of Americans were subsistence farmers. Society alters to meet social needs, what we're really talking about is introducing a ton of slack into industrial labor. That isn't a waste, it's the potential for great expansion in so many other fields (think what resources were sunk into industry during Cold War that then turned to softer industries after 1989. Maybe the fantasy here is we should have the best and brightest of us, I dunno stay as mechanical engineers and work for GE or UTC building better stealth bombers instead of looking to FAANG and writing better ad service algorithms). More energy is always a better thing for society. Labor saving tech is equivalent to increasing the sum of energy available to society. I don't cry because the ladder of the old gold union benes at John Deere were pulled up while I was in gradeschool, I went in search of a better opportunity than the one that wasn't there. The difference may be that "this will affect millions simultaneously!" but so hasn't every transformative technology. Last-lastly, to make a general economic argument I never see: tens of millions without labor drives up supply which drives down wages. Robots and AI make everything for a fraction of cost (comparable to shipping manufacturing to slave, I mean indigenous, labor overseas for pennies-on-the-dollar in 1970s), so reduced wages maintain balance with cost of goods & services. Entrepreneurs can now exploit a larger labor force with diverse skills to explore new ventures with reduced costs on all front due to labor-saving tech and labor-bloated workforce. This leads to new ideas and extrapolations previously unviable or with a too-high floor of cost to entertain. Trillionaire tech CEOs who own everything divvy out grants like feudal lords funding weird idea-people like Leeuwenhoek with his curious "micro-scope". Not ideal but that's still more than a starved populace voting demagogues for bread doles.
- vitaflo 5y ago
  You're missing one of the key points of the OP's post, deflation. With fiat currencies, small inflation is a feature not a bug. If goods cost more tomorrow than they do today, it promotes purchasing today not tomorrow. If the expectation is that each year I will get a raise, it promotes work to get that raise. This increases economic activity. A psychological trick perhaps, but an effective one for the economy. With Bitcoin et al being deflationary it means that goods will be cheaper tomorrow than they are today. This promotes hoarding, not purchasing. You would expect to get a pay cut every year, not a raise. This grinds the gears of economic activity. You are being incentivized not to spend your money unless you absolutely have to, which is the death knell of any functioning economy. While there are certainly problems with the current model, cryptocurrency simply makes them worse.
  - Gosper 5y ago
    This is why the home computer and smartphone revolutions we were promised never happened. No one absolutely had to have them so everyone waited for next year's cheaper, faster, and better models and the market died out. Imagine a terrible world where people are incentivised to buy stuff they don't need and barely want; we'd be drowning in crap and burning up the Earth to make it.
  - datadata 5y ago
    With an inflationary fiat currency, people are always going to try to invent things like bitcoin to be able to do something with their money other than watch it dissolve from inflation or be forced to consume. I don't think that means that bitcoin is going to be successful, but fiat currency is either going to become less important or more coercive as people become aware of what inflation does and try to escape it.
gfodor 5y ago
No, Hacker News has been consistently wrong on crypto for a decade, and will continue to serve up these kinds of one dimensional narratives that are wildly detached from reality. The reality is that fiat is in trouble, and crypto is poised to bring about a fundamentally competitive monetary system to the central banks, among many other phenomena most people are still ill prepared for.
- DanHulton 5y ago
  Crypto is a solution to a whole host of problems that don't really exist. Fiat isn't in trouble, capitalism is - hypergrowth cannot continue forever, especially given how we're running up against the limits of our ecology, and yet capitalism as we've become dependent on it is itself dependent on hypergrowth. Crypto is just another arm of capitalism, subject to those same problems and more of its own making. Crypto is going to need "just ten more years to take off" for long enough for us to completely fuck up this planet, and by then this little pissing match will be completely irrelevant.
  - gfodor 5y ago
    Canada literally just froze bank accounts without due process, and the West did the same effective thing at a country-level scale against Russia. I don't blame people who were skeptical of the ideas in the beginning, but as BTC sits at $40k, with entire countries adopting it as legal tender, with ~15% inflation in the US, and with financial war (civil and internal) breaking out at increasing scope and scale, it boggles the mind people can still write such dismissive takes without at least pausing for a moment to consider if they've made an error. The development of trustless globally agreed upon ledgers is as big of a development as the printing press and gunpowder, and it's fundamentally tragic that smart people are so wrapped up in cynicism they're still determined to ignore it and not help direct it in a positive direction.
- tedajax 5y ago
  Lol
globular-toast 5y ago
That's because people were talking about a different thing back then. Back then we were talking about trustless digital cash. That was what people were excited about. It had the potential to fix a lot of the problems with the current banking system. It was exciting and seemed like it could change the world. Nowadays Bitcoin and crpyto in general is synonymous with investment. When you see it in that light it looks completely different. Opinions haven't necessarily changed, we just stopped talking about the original thing. To think Bitcoin was created as a scam seems very cynical to me. I believe Bitcoin was created for good reasons but standard human behaviour ruined it. It wouldn't be the first time that's happened.
- MisterTea 5y ago
  > Back then we were talking about trustless digital cash. That was what people were excited about. That was the scams selling point and how they clouded peoples judgement: Make it sound like it can change the world for the better. Even in 2010/11 when my brother and I were talking to the founder of the Avalon miners there was plenty of skepticism floating around.
- FerociousTimes 5y ago
  It's a scheme, more specifically a pyramid scheme in essence for the founders and early investors.
  - native_samples 5y ago
    Given the founder disappeared and never spent his coins, and the other early users were all developers who are conspicuously not crazy rich, that seems like an extremely uncharitable interpretation of what happened.
    - Ekaros 5y ago
      I think nobody actually expected it to be pumped this high or go this far in pricing. So many likely realised the gains at much lower prices...
exdsq 5y ago
Really? Feels like this has been the prevailing perspective since at least late 2018 - I guess the 2017 crash had something to do with that
- throwaway82652 5y ago
  I don't blame the crash, the wild price fluctuation is an intentional design of the system that should be entirely expected by anyone invested in this. Personally I always thought cryptocurrency was a broken concept but I was willing to let the enthusiasts do it as long as they kept it to themselves. It's their money, after all. Then a bunch of things happened like the crazy price gouging on GPUs, the energy costs skyrocketing and not showing any signs of slowing down, the mainstreaming of NFTs and pay-to-play blockchain gaming and other blatant scams, the report after report on high-profile hacks and frauds and rug pulls, etc.... and it's become apparent that the damage from this can no longer remain self-contained.

f38zf5vdt 5y ago

My only problem with this description is that it also describes markets at large. Because markets are always intended to be exponentially growing in real value over time, any individual entering them and holding assets will accrue assets at a great amount than people who can not afford to. Over time this results in greater and greater accumulation of wealth into the hands of those who originally simply possessed more. This is a fact that has been evidenced by ever increasing amounts of wealth concentration in the hands of fewer and fewer individuals over the past 50 years. [1] Unfortunately, it seems cryptocurrency is a just an extension of the many of the systems we already have that are described in fiat amounts. https://www.newyorker.com/news/john-cassidy/pikettys-inequality-story-in-six-charts https://www.newyorker.com/news/john-cassidy/pikettys-inequal...

throwaway82652 5y ago
>Unfortunately, it seems cryptocurrency is a just an extension of the many of the systems we already have that are described in fiat amounts. Because cryptocurrency is also a fiat system where the money holds no real value and is manipulated by various entities, only the fiat is declared by a private group of computer nerds instead of the government.
mjburgess 5y ago
Err.... not quite. What you're describing is preferential attachment... ie., those with a large stake can multiply that stake producing ever larger amounts. This isn't a scam. If I give everyone in the comments $100k, by "next year" some will have $1m and some $0 -- and, in general, we'll all be a little better off. Its the nature of any advantage that it compounds, and compounding advantages of any kind produce dramatic inequalities (of sex, money, creative achievement, etc.). Bitcoin isnt a scam because it produces an unequal outcome -- any system which works to increase the general welfare will necessarily operate on and compound inequalities. It's a scam because as time passes the general welfare *does not increase*, indeed, it plummets! People holding coins arent opening factories, building houses, teaching people, etc. Nothing is happening. They're litterally just twiddling their thumbs. What's actually happening is that poorer fools are joining late in the game, whose money comes from actual labour... and supply the initial parasitical early-stakes with exit-cash. Ie., they wait for 10yr do nothing; you work for 1mo and do lots. Your productive labour becomes their exit. It's welfare for the rich. Inequality isnt the issue here. It's the particular type of "theft" taking place. It is, in a very real sense, an actual scam.
- shuckles 5y ago
  Well in fairness some Bitcoin holders are building vast factories of mining capacity, and their argument is the mining is spent on pro-social anti-authoritarian censorship-free wealth movement. Other Bitcoin holders are putting in a lot of labor to create the most compelling narrative of a genuine rags to riches opportunity. Is there $5t or whatever in total market value to that? Not sure.
- f38zf5vdt 5y ago
  How does that differ at all from the possession of any sparse, shelf-stable commodity that is in demand? For example, gold or palladium. An individual possessing palladium in the past 10 years would have seen a 400% increase in value. The people holding the metal aren't doing anything, it's just demand for it has increased and the value of fiat has decreased over time, so it is worth more. The same could be said for video games or pokemon cards. I guess maybe the argument is you can do something with metals or video games or pokemon cards. But it's hard to believe that a special Charizard has a utility permitting million dollar valuations.
  - ansible 5y ago
    There is hopefully no one out there that genuinely believes that a Charizard card is actually worth anything other than for entertainment. People are apparently willing to pay a lot for said entertainment, and the cachet of owning a rare card. And that's fine. Palladium is a genuinely useful material, and has significant industrial uses. If it gets expensive, that's just markets. If it gets too expensive, alternatives will be researched and hopefully developed. And that is fine. Crypto fraudsters are trying to tell us that their coin is legitimately useful for ... something, while it is actually an entertainment product. In my view, Doge is one of the few legit crypto coins because it was initially marketed as entertainment. People would donate Doge to each other for fun. Some of the file storage coins may also be legitimate, because you spend those on distributed storage, which is an actually useful service. But the majority of crypto coins and NFTs are marketed as something useful or a legitimate investment, when they are not.
- quickcheque 5y ago
eldaisfish 5y ago
a major reason people recommend broad market index funds is that they have been proven to outpace inflation in the long run. As with all things, the key to making money in a capitalist system is having money to begin with. The stock market has in fact led to more people growing their wealth. While not perfect, it has come a long way from the days where only the wealthy could access it.
gwbas1c 5y ago
> Because markets are always intended to be exponentially growing That's because population grows exponentially. If we have a massive contraction in population I suspect a lot of common wisdom about economics won't hold true.
- f38zf5vdt 5y ago
  A massive decrease in the value of human labor and human individual productivity due to robotics or AI might have a similar outcome.
  - Psyladine 5y ago
    While Ned Ludd's ghost might upvote this, I am as unconvinced of this as apparently everyone in this thread has always been of bitcoin. For starters, any increase of output with a decrease of input labor is by definition an increase of productivity, individual, net, all of it. For two, AI hasn't proven anything beyond quickly doing grunt labor. Quickbooks & Excel didn't put the CPA trade out of business, an algorithm that identifies a cat in a picture or whatever reduces overhead, not eliminating professions. Tangenitally I am, however, very excited at AI's prospects in reverse-engineering and rewriting code, a long-lived fantasy that we can actually un-fark many old or particular programs and systems that are currently hardware dependent or just not worth the man-hours to do the transcription from, say, 16 bit to 64 (or 128, or 256, wherever the future goes). Lastly, robots have been around since the 60s, industrially and standardized. They do good work, consistently, reduce cost and thus prices and floors of production. The automotive industry is bigger than ever, and more top heavy. This is good, no? No-one dreams of working on an assembly line for Ford, and unlike the common-wisdom ideal of teenagers & inexperienced workers starting in the service industry and working up & out to better professions, I don't know of anyone who realistically has a career plan of 20 to 60 working their way up from floor sweeper to head of district in any enterprise. There is this weird pessimism that comes on the tails of this breakthrough in labor leverage, that we're going to put ourselves out of work and have to sit around and then starve to death or get UBI because we're incompetent, when 100 years ago the plurality of Americans were subsistence farmers. Society alters to meet social needs, what we're really talking about is introducing a ton of slack into industrial labor. That isn't a waste, it's the potential for great expansion in so many other fields (think what resources were sunk into industry during Cold War that then turned to softer industries after 1989. Maybe the fantasy here is we should have the best and brightest of us, I dunno stay as mechanical engineers and work for GE or UTC building better stealth bombers instead of looking to FAANG and writing better ad service algorithms). More energy is always a better thing for society. Labor saving tech is equivalent to increasing the sum of energy available to society. I don't cry because the ladder of the old gold union benes at John Deere were pulled up while I was in gradeschool, I went in search of a better opportunity than the one that wasn't there. The difference may be that "this will affect millions simultaneously!" but so hasn't every transformative technology. Last-lastly, to make a general economic argument I never see: tens of millions without labor drives up supply which drives down wages. Robots and AI make everything for a fraction of cost (comparable to shipping manufacturing to slave, I mean indigenous, labor overseas for pennies-on-the-dollar in 1970s), so reduced wages maintain balance with cost of goods & services. Entrepreneurs can now exploit a larger labor force with diverse skills to explore new ventures with reduced costs on all front due to labor-saving tech and labor-bloated workforce. This leads to new ideas and extrapolations previously unviable or with a too-high floor of cost to entertain. Trillionaire tech CEOs who own everything divvy out grants like feudal lords funding weird idea-people like Leeuwenhoek with his curious "micro-scope". Not ideal but that's still more than a starved populace voting demagogues for bread doles.
vitaflo 5y ago
You're missing one of the key points of the OP's post, deflation. With fiat currencies, small inflation is a feature not a bug. If goods cost more tomorrow than they do today, it promotes purchasing today not tomorrow. If the expectation is that each year I will get a raise, it promotes work to get that raise. This increases economic activity. A psychological trick perhaps, but an effective one for the economy. With Bitcoin et al being deflationary it means that goods will be cheaper tomorrow than they are today. This promotes hoarding, not purchasing. You would expect to get a pay cut every year, not a raise. This grinds the gears of economic activity. You are being incentivized not to spend your money unless you absolutely have to, which is the death knell of any functioning economy. While there are certainly problems with the current model, cryptocurrency simply makes them worse.
- Gosper 5y ago
  This is why the home computer and smartphone revolutions we were promised never happened. No one absolutely had to have them so everyone waited for next year's cheaper, faster, and better models and the market died out. Imagine a terrible world where people are incentivised to buy stuff they don't need and barely want; we'd be drowning in crap and burning up the Earth to make it.
- datadata 5y ago
  With an inflationary fiat currency, people are always going to try to invent things like bitcoin to be able to do something with their money other than watch it dissolve from inflation or be forced to consume. I don't think that means that bitcoin is going to be successful, but fiat currency is either going to become less important or more coercive as people become aware of what inflation does and try to escape it.

gfodor 5y ago

No, Hacker News has been consistently wrong on crypto for a decade, and will continue to serve up these kinds of one dimensional narratives that are wildly detached from reality. The reality is that fiat is in trouble, and crypto is poised to bring about a fundamentally competitive monetary system to the central banks, among many other phenomena most people are still ill prepared for.

DanHulton 5y ago
Crypto is a solution to a whole host of problems that don't really exist. Fiat isn't in trouble, capitalism is - hypergrowth cannot continue forever, especially given how we're running up against the limits of our ecology, and yet capitalism as we've become dependent on it is itself dependent on hypergrowth. Crypto is just another arm of capitalism, subject to those same problems and more of its own making. Crypto is going to need "just ten more years to take off" for long enough for us to completely fuck up this planet, and by then this little pissing match will be completely irrelevant.
- gfodor 5y ago
  Canada literally just froze bank accounts without due process, and the West did the same effective thing at a country-level scale against Russia. I don't blame people who were skeptical of the ideas in the beginning, but as BTC sits at $40k, with entire countries adopting it as legal tender, with ~15% inflation in the US, and with financial war (civil and internal) breaking out at increasing scope and scale, it boggles the mind people can still write such dismissive takes without at least pausing for a moment to consider if they've made an error. The development of trustless globally agreed upon ledgers is as big of a development as the printing press and gunpowder, and it's fundamentally tragic that smart people are so wrapped up in cynicism they're still determined to ignore it and not help direct it in a positive direction.
tedajax 5y ago
Lol

globular-toast 5y ago

That's because people were talking about a different thing back then. Back then we were talking about trustless digital cash. That was what people were excited about. It had the potential to fix a lot of the problems with the current banking system. It was exciting and seemed like it could change the world. Nowadays Bitcoin and crpyto in general is synonymous with investment. When you see it in that light it looks completely different. Opinions haven't necessarily changed, we just stopped talking about the original thing. To think Bitcoin was created as a scam seems very cynical to me. I believe Bitcoin was created for good reasons but standard human behaviour ruined it. It wouldn't be the first time that's happened.

MisterTea 5y ago
> Back then we were talking about trustless digital cash. That was what people were excited about. That was the scams selling point and how they clouded peoples judgement: Make it sound like it can change the world for the better. Even in 2010/11 when my brother and I were talking to the founder of the Avalon miners there was plenty of skepticism floating around.
FerociousTimes 5y ago
It's a scheme, more specifically a pyramid scheme in essence for the founders and early investors.
- native_samples 5y ago
  Given the founder disappeared and never spent his coins, and the other early users were all developers who are conspicuously not crazy rich, that seems like an extremely uncharitable interpretation of what happened.
  - Ekaros 5y ago
    I think nobody actually expected it to be pumped this high or go this far in pricing. So many likely realised the gains at much lower prices...

exdsq 5y ago

Really? Feels like this has been the prevailing perspective since at least late 2018 - I guess the 2017 crash had something to do with that

throwaway82652 5y ago
I don't blame the crash, the wild price fluctuation is an intentional design of the system that should be entirely expected by anyone invested in this. Personally I always thought cryptocurrency was a broken concept but I was willing to let the enthusiasts do it as long as they kept it to themselves. It's their money, after all. Then a bunch of things happened like the crazy price gouging on GPUs, the energy costs skyrocketing and not showing any signs of slowing down, the mainstreaming of NFTs and pay-to-play blockchain gaming and other blatant scams, the report after report on high-profile hacks and frauds and rug pulls, etc.... and it's become apparent that the damage from this can no longer remain self-contained.