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As soon as it was clear that Bitcoin was going to be a commodity instead of a currency (why use it as a currency to buy a pizza this week when it could buy you

by joecot 4y ago

As soon as it was clear that Bitcoin was going to be a commodity instead of a currency (why use it as a currency to buy a pizza this week when it could buy you a car next week?), it was clear it was now a pyramid scheme. That's why I didn't invest in it. What I hadn't counted on was how gullible people were for pyramid schemes.

Ekaros 4y ago
I could have made relatively decent chunk of money if I had just kept the little I had... But I'm really just too risk averse and believe in sanity that the things wouldn't actually go anywhere. Specially not to the 100x from point where I was. Then again, I also think most tech stocks are just stupid. Especially Tesla, but thankfully I'm not either betting against them. Let's see if I'm proven correct in long run.
- noxer 4y ago
  People with this kind of "risk tolerance" usually dont take a risk even tho it would probably be totally "sane". If you think about it, many people make several million dollars over their life time but see it as to high of a risk to put 10k into something that could go to zero but it also could go to 100k or even more. That does not make much sense. The question should not be "should I risk the 10k? The question should be "am I in a financial position that allows me to lose 10k?" If the answer is "Yes" then consider doing it, you will not miss the 10k at the end of you life but you will remember what you did with the 100k if it happens.
  - giaour 4y ago
    > many people make several million dollars over their life time but see it as to high of a risk to put 10k into something that could go to zero but it also could go to 100k or even more. That does not make much sense. The question should not be "should I risk the 10k? The question should be "am I in a financial position that allows me to lose 10k?" I see where you're trying to go by framing a loss against lifetime earnings, but I think that could lead some investors to mislead themselves. Someone who is willing to bet 10K on black at the roulette table is almost certainly going to gamble more than once in their lives. The question should be, "am I in a financial position that allows me to lose 10k right now, and can I trust myself to walk away from the table if I do lose?"
    - noxer 4y ago
      Obviously I didn't not attempt to cover ever possible case and personality you can think of that wasn't the goal anyway. Someone who gambles doesn't fall in the category of "risk intolerant" anyway. Beside that in "traditional" gambling the odds are against you so the whole risk/reward ration is out the window and "only a small lose over your whole lifetime" doesn't change this. I would never encourage anyone to just trow money any anything that could potentially somehow give you more back. Roulette, lottery etc. are all statistically against you and you have zero way to choose clever or otherwise affect the outcome in your favor. Buying something with speculative value is completely different and it certainly is a good idea to actually inform yourself first about what yo buy. If you subjectively think the chance of loosing everything is over 50% I would look for something else after all the goal is to not lose so it should not be a blind throw it should just be something with high risk AND high reward. I know someone who intentionally bough some rare apple device for like 1.1k. Fully aware that it might be worthless soon or break and loose most of its value. But it had a realist chance to gain value and it did, he sold it for over 10k 5 years later. Thats about +800% a risk/reward ration that does make sense.
      - giaour 4y ago
        "Betting 10K on black" was meant to be a metaphor for buying 10K of cryptocurrency. Just like there are professional cryptocurrency traders, there are professional gamblers, but everyone else playing the game is expected to lose money to the sharks. The example you provide of purchasing a fragile collectible is similar; almost all collectibles (be they fine art, beanie babies, or NFTs) lose value, so purchasing one is very much a bet.
        noxer 4y ago
        You can not professionally bet on black. What you think of as professional gamblers is probably something like poker that has nothing to do with a high risk/reward investment/speculation. Anyway you try really hard to not understand what I said so if you insist that high risk/reward means it must be gambling and the risk to loose everything must so much higher than winning anything then you simply dont know of any good opportunity. Might be side effect of dismissing everything at first sight. Either way I wont reply any further.
  - logifail 4y ago
    > but see it as to high of a risk to put 10k into something that could go to zero but it also could go to 100k or even more. That does not make much sense You could walk into a betting shop and put 10k on all kinds of things that will most likely go to zero but have a finite probability of going to 100k or even more. Q: How do you suggest determining the odds of success? Most of us can't invest in every 10k opportunity (and even if we did, we might not win out in the long run)
    - noxer 4y ago
      If the odds are obviously against you its not useful ofc. If you think there is a 50% chance you lose everything then you should also see a 50% chance that you make over 100% profit if that is not realistic its probably not the right thing.
      - logifail 4y ago
        > If the odds are obviously against you Can you define "obviously"? Spoiler, but for financial investments, there are no [genuine] odds. That's kind of my point about the efficient markets hypothesis. For example, Tesla was at $88.60 on January 3, 2020. It's at $728 now (and peaked[?] at $1222-ish in November 2021]. Presumably there were not very many people who, in January 2020, thought Tesla would increase in value, or it wouldn't have been at $88.60 for very long.
        noxer 4y ago
        Roulette is an example where the odds are against you and its obvious. Your chance to win in statistically lower than 50% and it should be higher than 50%.
- logifail 4y ago
  > if I had just kept the little I had... But I'm really just too risk averse I don't think it's about risk, it's that if you hold stocks or crypto or many other kinds of investment, and your holding is worth $x right now, if you're a believer in the efficient markets hypothesis, you have no real idea whether it's going to go up or indeed down in the future. I bought a house because it's a place for our family to live, not because I belive it's going to appreciate in value. If you buy ten houses, you need to have information - or sheer belief - that your investment is going to pay off.
nwiswell 4y ago
I'm not clear on the logic here to be perfectly honest, even if I broadly agree that the real innovation with Bitcoin died when it was clear it would never be a currency. But gold is also a commodity, and I don't think I've ever heard it called a pyramid scheme.
- dionidium 4y ago
  "Buffett calls gold an “unproductive” asset, which, as defined in his 2011 letter to shareholders, means “assets that will never produce anything, but that are purchased in the buyer's hope that someone else — who also knows that these assets will be forever unproductive — will pay more for them in the future.”" Source: https://grow.acorns.com/warren-buffett-why-gold-is-an-unproductive-asset/ https://grow.acorns.com/warren-buffett-why-gold-is-an-unprod...
  - nwiswell 4y ago
    Yes, that's true of commodities generally. They are worth what people will pay for them; they do not produce cash flows. A pile of copper is not productive either. The fair criticism, I suppose, is that the "compelling reasons" a person might pay for a pile of copper are much more numerous than for gold (or bitcoin). But, OK: think of fine art for a moment... it is also an unproductive asset, the value of which depends wholly on what other people feel like paying, since there is no immediately profitable economic activity in which you can engage with a Monet (unlike the pile of copper). Are you therefore calling fine art a pyramid scheme? I think we are watering down the definition into meaninglessness.
    - jjeaff 4y ago
      You can charge admission to view fine art in person.
      - nwiswell 4y ago
        I'm not sure if you are serious. Are there any for-profit museums focused on fine art?
mattwilsonn888 4y ago
You don't understand what a commodity is - or you don't understand what Bitcoin is.
- deleted 4y ago
  [deleted]
- arcticbull 4y ago
  Ah the classic coiner refrain. Thanks bud. We do. We really, really do. We've spent many years learning exactly what those things are thanks to all this insufferable nonsense. I know more about crypto than practically 90% of the crypto community. I know all the personalities, the history, the fraud, the crime, the grift. I've read countless whitepapers. I've learned about 'traditional' finance. All because of the brigading army of the insufferable.
  - FabHK 4y ago
    While I dislike the coiners' "oh, you just don't get it" as much as you, I think a more charitable interpretation of GP is possible that rests on the fact that there are two interpretations of the word "commodity": 1. something (usually raw material or primary good) that can be bought and sold - Bitcoin sort of fits that definition. 2. something (usually raw material or primary good) that can be processed to produce something useful. Bitcoin is not a commodity in that sense, which might be what GP was trying to highlight.
  - idea55 4y ago
    The best scientific explanation for why Musk is rich is our social system requires we implicitly believe and repeat that idea due to political training which is hand me down gossip from parents. He’s even said he’s propped up by others. You are being annoyed with people when they’re not reciting the right semantics? Some form of just stick to the script? The entire internet is full of insufferable bullshit brigading of opinions because that’s what it’s for. I’ve been online since the 80s for the weird. Now it’s full of insufferable normies. Maybe it’s outlived it’s usefulness as a social engagement tool.
TameAntelope 4y ago
I wish we had a better phrase than "pyramid scheme", because IMO anything that's a "scheme" has people who know better at one end, and I really don't think there's anyone involved in crypto that is deliberately "winning". What's a phrase for when everyone is getting scammed, and not by any one person, but by an idea? Where there are no winners, only lucky and unlucky. Pyramid trap? Pyramid quagmire? IDK, but "scheme" implies something I don't think is there - control.
- ChikkaChiChi 4y ago
  I think "crypto meme scheme" or something to that effect
- pmcp 4y ago
  Betting?
- zeven7 4y ago
  > What's a phrase for when everyone is getting scammed, and not by any one person, but by an idea? Where there are no winners, only lucky and unlucky. The phrase is "financial market"
- vannevar 4y ago
  >...I really don't think there's anyone involved in crypto that is deliberately "winning". I believe that bitcoin began as a straightforward "pump and dump" scheme, dressed up in a techno-libertarian narrative to appeal to its intended marks, young tech males with disposable income. As the size of the market has grown, I suspect the original cartel holds a smaller percentage of the outstanding supply, but I'll bet it's still enough to move the market deliberately when they choose.
  - Ekaros 4y ago
    I don't think it began as such, but as idealistic toy or proof of concept project where no one actually run the numbers to end goal. Then at some time it went to get rich quick loop, with some ideologues in mix.
nobodyandproud 4y ago
There is a different interpretation: Crypto enabled tax dodgers and black markets. It’s a use case I didn’t consider a decade ago.
- Ekaros 4y ago
  Black markets are also interesting question. How high coin value you actually need for them to operate? Certainly not tens of thousand, probably a few hundred would still be enough. If crypto was token for exchange.
  - nobodyandproud 4y ago
    I don’t know. If you’re exchanging weapons or illicit drugs (nation state) it can easily be millions. As a run-of-the-mill software engineer, its a world I only have a passing knowledge on.
- joecot 4y ago
  There is also this, and it's one of the things that propped up Bitcoin at the beginning. A large chunk of the Chinese drug black market ran on bitcoin. In many ways the cryptocurrency boom was the 21st century's opium war.
wonderwonder 4y ago
stocks are a pyramid scheme as well, just an accepted one. To profit in stocks, new investor funds are required same as crypto. Truly the only non pyramid schemes are income producing assets such as a business or real estate.
- moultano 4y ago
  Look up what a dividend is.
  - wonderwonder 4y ago
    Amazon is one of the largest companies on earth. How much has it paid in dividends? Netflix? Alibaba?
    - moultano 4y ago
      Once Amazon decides that the prospects for continuing to invest in growing their business are lower, they will start paying dividends. In the meantime Microsoft and Apple already do.
      - wonderwonder 4y ago
        So the hope that eventually the powers that be at Amazon will feel magnanimous at an undetermined date in the future is what makes it not a pyramid scheme at the moment?
        moultano 4y ago
        What makes it not a pyramid scheme is that by owning the stock you own part of Amazon, and Amazon makes money by providing a service to users. The inflow of money comes from the users of its product, not future suckers.
        wonderwonder 4y ago
strangattractor 4y ago
No one ever lost money underestimating the intelligence of the American public. - Donald Trump Not really but I am sure he is a practitioner of the philosophy. The actual quote is from H. L. Mencken and applies to both money and politics (which might be the same thing:) No one in this world, so far as I know—and I have searched the records for years, and employed agents to help me—has ever lost money by underestimating the intelligence of the great masses of the plain people. Nor has anyone ever lost public office thereby. The mistake that is made always runs the other way. Because the plain people are able to speak and understand, and even, in many cases, to read and write, it is assumed that they have ideas in their heads, and an appetite for more. This assumption is a folly.
eric_cc 4y ago
> Bitcoin ... to be a commodity instead of a currency According to current (May 2022) regulatory framework in the USA. In other countries it is currently a currency.

by joecot 4y ago

Ekaros 4y ago

I could have made relatively decent chunk of money if I had just kept the little I had... But I'm really just too risk averse and believe in sanity that the things wouldn't actually go anywhere. Specially not to the 100x from point where I was. Then again, I also think most tech stocks are just stupid. Especially Tesla, but thankfully I'm not either betting against them. Let's see if I'm proven correct in long run.

noxer 4y ago
People with this kind of "risk tolerance" usually dont take a risk even tho it would probably be totally "sane". If you think about it, many people make several million dollars over their life time but see it as to high of a risk to put 10k into something that could go to zero but it also could go to 100k or even more. That does not make much sense. The question should not be "should I risk the 10k? The question should be "am I in a financial position that allows me to lose 10k?" If the answer is "Yes" then consider doing it, you will not miss the 10k at the end of you life but you will remember what you did with the 100k if it happens.
- giaour 4y ago
  > many people make several million dollars over their life time but see it as to high of a risk to put 10k into something that could go to zero but it also could go to 100k or even more. That does not make much sense. The question should not be "should I risk the 10k? The question should be "am I in a financial position that allows me to lose 10k?" I see where you're trying to go by framing a loss against lifetime earnings, but I think that could lead some investors to mislead themselves. Someone who is willing to bet 10K on black at the roulette table is almost certainly going to gamble more than once in their lives. The question should be, "am I in a financial position that allows me to lose 10k right now, and can I trust myself to walk away from the table if I do lose?"
  - noxer 4y ago
    Obviously I didn't not attempt to cover ever possible case and personality you can think of that wasn't the goal anyway. Someone who gambles doesn't fall in the category of "risk intolerant" anyway. Beside that in "traditional" gambling the odds are against you so the whole risk/reward ration is out the window and "only a small lose over your whole lifetime" doesn't change this. I would never encourage anyone to just trow money any anything that could potentially somehow give you more back. Roulette, lottery etc. are all statistically against you and you have zero way to choose clever or otherwise affect the outcome in your favor. Buying something with speculative value is completely different and it certainly is a good idea to actually inform yourself first about what yo buy. If you subjectively think the chance of loosing everything is over 50% I would look for something else after all the goal is to not lose so it should not be a blind throw it should just be something with high risk AND high reward. I know someone who intentionally bough some rare apple device for like 1.1k. Fully aware that it might be worthless soon or break and loose most of its value. But it had a realist chance to gain value and it did, he sold it for over 10k 5 years later. Thats about +800% a risk/reward ration that does make sense.
    - giaour 4y ago
      "Betting 10K on black" was meant to be a metaphor for buying 10K of cryptocurrency. Just like there are professional cryptocurrency traders, there are professional gamblers, but everyone else playing the game is expected to lose money to the sharks. The example you provide of purchasing a fragile collectible is similar; almost all collectibles (be they fine art, beanie babies, or NFTs) lose value, so purchasing one is very much a bet.
      - noxer 4y ago
        You can not professionally bet on black. What you think of as professional gamblers is probably something like poker that has nothing to do with a high risk/reward investment/speculation. Anyway you try really hard to not understand what I said so if you insist that high risk/reward means it must be gambling and the risk to loose everything must so much higher than winning anything then you simply dont know of any good opportunity. Might be side effect of dismissing everything at first sight. Either way I wont reply any further.
- logifail 4y ago
  > but see it as to high of a risk to put 10k into something that could go to zero but it also could go to 100k or even more. That does not make much sense You could walk into a betting shop and put 10k on all kinds of things that will most likely go to zero but have a finite probability of going to 100k or even more. Q: How do you suggest determining the odds of success? Most of us can't invest in every 10k opportunity (and even if we did, we might not win out in the long run)
  - noxer 4y ago
    If the odds are obviously against you its not useful ofc. If you think there is a 50% chance you lose everything then you should also see a 50% chance that you make over 100% profit if that is not realistic its probably not the right thing.
    - logifail 4y ago
      > If the odds are obviously against you Can you define "obviously"? Spoiler, but for financial investments, there are no [genuine] odds. That's kind of my point about the efficient markets hypothesis. For example, Tesla was at $88.60 on January 3, 2020. It's at $728 now (and peaked[?] at $1222-ish in November 2021]. Presumably there were not very many people who, in January 2020, thought Tesla would increase in value, or it wouldn't have been at $88.60 for very long.
      - noxer 4y ago
        Roulette is an example where the odds are against you and its obvious. Your chance to win in statistically lower than 50% and it should be higher than 50%.
logifail 4y ago
> if I had just kept the little I had... But I'm really just too risk averse I don't think it's about risk, it's that if you hold stocks or crypto or many other kinds of investment, and your holding is worth $x right now, if you're a believer in the efficient markets hypothesis, you have no real idea whether it's going to go up or indeed down in the future. I bought a house because it's a place for our family to live, not because I belive it's going to appreciate in value. If you buy ten houses, you need to have information - or sheer belief - that your investment is going to pay off.

nwiswell 4y ago

I'm not clear on the logic here to be perfectly honest, even if I broadly agree that the real innovation with Bitcoin died when it was clear it would never be a currency. But gold is also a commodity, and I don't think I've ever heard it called a pyramid scheme.

dionidium 4y ago
"Buffett calls gold an “unproductive” asset, which, as defined in his 2011 letter to shareholders, means “assets that will never produce anything, but that are purchased in the buyer's hope that someone else — who also knows that these assets will be forever unproductive — will pay more for them in the future.”" Source: https://grow.acorns.com/warren-buffett-why-gold-is-an-unproductive-asset/ https://grow.acorns.com/warren-buffett-why-gold-is-an-unprod...
- nwiswell 4y ago
  Yes, that's true of commodities generally. They are worth what people will pay for them; they do not produce cash flows. A pile of copper is not productive either. The fair criticism, I suppose, is that the "compelling reasons" a person might pay for a pile of copper are much more numerous than for gold (or bitcoin). But, OK: think of fine art for a moment... it is also an unproductive asset, the value of which depends wholly on what other people feel like paying, since there is no immediately profitable economic activity in which you can engage with a Monet (unlike the pile of copper). Are you therefore calling fine art a pyramid scheme? I think we are watering down the definition into meaninglessness.
  - jjeaff 4y ago
    You can charge admission to view fine art in person.
    - nwiswell 4y ago
      I'm not sure if you are serious. Are there any for-profit museums focused on fine art?

mattwilsonn888 4y ago

You don't understand what a commodity is - or you don't understand what Bitcoin is.

deleted 4y ago
[deleted]
arcticbull 4y ago
Ah the classic coiner refrain. Thanks bud. We do. We really, really do. We've spent many years learning exactly what those things are thanks to all this insufferable nonsense. I know more about crypto than practically 90% of the crypto community. I know all the personalities, the history, the fraud, the crime, the grift. I've read countless whitepapers. I've learned about 'traditional' finance. All because of the brigading army of the insufferable.
- FabHK 4y ago
  While I dislike the coiners' "oh, you just don't get it" as much as you, I think a more charitable interpretation of GP is possible that rests on the fact that there are two interpretations of the word "commodity": 1. something (usually raw material or primary good) that can be bought and sold - Bitcoin sort of fits that definition. 2. something (usually raw material or primary good) that can be processed to produce something useful. Bitcoin is not a commodity in that sense, which might be what GP was trying to highlight.
- idea55 4y ago
  The best scientific explanation for why Musk is rich is our social system requires we implicitly believe and repeat that idea due to political training which is hand me down gossip from parents. He’s even said he’s propped up by others. You are being annoyed with people when they’re not reciting the right semantics? Some form of just stick to the script? The entire internet is full of insufferable bullshit brigading of opinions because that’s what it’s for. I’ve been online since the 80s for the weird. Now it’s full of insufferable normies. Maybe it’s outlived it’s usefulness as a social engagement tool.

TameAntelope 4y ago

I wish we had a better phrase than "pyramid scheme", because IMO anything that's a "scheme" has people who know better at one end, and I really don't think there's anyone involved in crypto that is deliberately "winning". What's a phrase for when everyone is getting scammed, and not by any one person, but by an idea? Where there are no winners, only lucky and unlucky. Pyramid trap? Pyramid quagmire? IDK, but "scheme" implies something I don't think is there - control.

ChikkaChiChi 4y ago
I think "crypto meme scheme" or something to that effect
pmcp 4y ago
Betting?
zeven7 4y ago
> What's a phrase for when everyone is getting scammed, and not by any one person, but by an idea? Where there are no winners, only lucky and unlucky. The phrase is "financial market"
vannevar 4y ago
>...I really don't think there's anyone involved in crypto that is deliberately "winning". I believe that bitcoin began as a straightforward "pump and dump" scheme, dressed up in a techno-libertarian narrative to appeal to its intended marks, young tech males with disposable income. As the size of the market has grown, I suspect the original cartel holds a smaller percentage of the outstanding supply, but I'll bet it's still enough to move the market deliberately when they choose.
- Ekaros 4y ago
  I don't think it began as such, but as idealistic toy or proof of concept project where no one actually run the numbers to end goal. Then at some time it went to get rich quick loop, with some ideologues in mix.

nobodyandproud 4y ago

There is a different interpretation: Crypto enabled tax dodgers and black markets. It’s a use case I didn’t consider a decade ago.

Ekaros 4y ago
Black markets are also interesting question. How high coin value you actually need for them to operate? Certainly not tens of thousand, probably a few hundred would still be enough. If crypto was token for exchange.
- nobodyandproud 4y ago
  I don’t know. If you’re exchanging weapons or illicit drugs (nation state) it can easily be millions. As a run-of-the-mill software engineer, its a world I only have a passing knowledge on.
joecot 4y ago
There is also this, and it's one of the things that propped up Bitcoin at the beginning. A large chunk of the Chinese drug black market ran on bitcoin. In many ways the cryptocurrency boom was the 21st century's opium war.

wonderwonder 4y ago

stocks are a pyramid scheme as well, just an accepted one. To profit in stocks, new investor funds are required same as crypto. Truly the only non pyramid schemes are income producing assets such as a business or real estate.

moultano 4y ago
Look up what a dividend is.
- wonderwonder 4y ago
  Amazon is one of the largest companies on earth. How much has it paid in dividends? Netflix? Alibaba?
  - moultano 4y ago
    Once Amazon decides that the prospects for continuing to invest in growing their business are lower, they will start paying dividends. In the meantime Microsoft and Apple already do.
    - wonderwonder 4y ago
      So the hope that eventually the powers that be at Amazon will feel magnanimous at an undetermined date in the future is what makes it not a pyramid scheme at the moment?
      - moultano 4y ago
        What makes it not a pyramid scheme is that by owning the stock you own part of Amazon, and Amazon makes money by providing a service to users. The inflow of money comes from the users of its product, not future suckers.
        wonderwonder 4y ago

strangattractor 4y ago

No one ever lost money underestimating the intelligence of the American public. - Donald Trump Not really but I am sure he is a practitioner of the philosophy. The actual quote is from H. L. Mencken and applies to both money and politics (which might be the same thing:) No one in this world, so far as I know—and I have searched the records for years, and employed agents to help me—has ever lost money by underestimating the intelligence of the great masses of the plain people. Nor has anyone ever lost public office thereby. The mistake that is made always runs the other way. Because the plain people are able to speak and understand, and even, in many cases, to read and write, it is assumed that they have ideas in their heads, and an appetite for more. This assumption is a folly.

eric_cc 4y ago

> Bitcoin ... to be a commodity instead of a currency According to current (May 2022) regulatory framework in the USA. In other countries it is currently a currency.