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Good for you. People like you will make money. That's how all speculative bubbles form... nobody would join them if there weren't highly visible gains in wealth

by scoofy 4y ago

Good for you. People like you will make money. That's how all speculative bubbles form... nobody would join them if there weren't highly visible gains in wealth, but they are effectively zero-sum. Unless the product creates value, independent from speculative value, it's a bad investment period. The entire reason we were banging our drums was exactly because people made money, but the music will stop, and when it does, all that value disappears. There is nothing wrong with crypo as a commodity. If you need it to build something with, fine, but it's not a wealth creating asset. It's a commodity, which is effectively never an investment vehicle.

gfodor 4y ago
The crash was in a non-appreciating asset.
jiggawatts 4y ago
“I played Russian roulette and won, you should try it too!” is not a very convincing argument. Nonetheless, the winners think they’re winners because they made the right choices and will try to convince others to follow suit.
- lupire 4y ago
  It's not Russian roulette. It's "let's all shoot each other and whoever wins gets all the stuff".
  - prepend 4y ago
    “My dad played a tontine and won. So should we all.”
kareemsabri 4y ago
Don't people trade in commodities though? Corn and soy and other things fluctuate in price because of their utility and changes in supply and demand, no?
- cam0 4y ago
  Trading != Investing
- scoofy 4y ago
  The commodities trade is driven by people needing those commodities. Right? Like, Kellog and Absolut need wheat. They need them because their business relies on them. They are willing to pay a premium, to make sure their supply will be there when it's time to make cereal or vodka. (interesting aside, the best heuristic i ever learned on how to get good vodka, look up the manufactures headquarters/operations location on google maps, and if you don't see grain silos, don't buy the vodka) Who needs bitcoin? Honestly not many people right now. The speculative boom is that, in the future, it becomes internet-cash. Then people will need it, they'll want it a lot to buy things in the internet, and that's fine. If they do, then the value will go up. However, aside from the fact that bitcoin is absolutely not able to handle cash-like transactions at all, there is still no reason for normal people to speculate on it now. If it becomes the de facto internet cash of the future, then, cool, you just exchange for it in the future. The idea that anyone could ever anticipate the future demand of a trivially replaceable ledger of exchange is... honestly insane. I'm not saying it's not worth speculating on, but please, god, don't put any serious portion of your investment portfolio in those types of arbitrary bets!
  - nostrademons 4y ago
    "Who needs bitcoin? Honestly not many people right now." Worldwide, lots of people. There's folks in Venezuela and Zimbabwe who need Bitcoin because their national currencies are hyperinflating. There's folks in El Salvador who need Bitcoin because it is their national currency. There's folks fleeing Ukraine who need Bitcoin because their nation is at risk of being swallowed by a large empire. There's folks in Russia who need Bitcoin because their nation is doing the swallowing and getting cut off from the world financial system as a result. There's folks in China (and other countries) who need Bitcoin because their nation can't be trusted not to interfere with private property and it's good to have a little insurance policy on a thumb drive, piece of paper, or memorized. I think that cryptocurrency is one of those areas where people in the developed world look at their own life experience and think "Who could ever need that?", not realizing that they represent a tiny fraction of humanity and that the experience of most of the rest of the world is dramatically different. I work on a product (Android) with about 3B users. I work on a tiny segment of it (tablets & TVs), with about 12% market share combined, and we're always struggling to get the larger org to invest in developing us. But when you run the numbers, you realize that the 12% of Android users with a tablet or TV is about 340M, more than the entire population of the United States. Similarly, the number of mobile phone users with accessibility needs (largely vision difficulties) is also larger than the population of the United States, yet it's awfully hard to get people to consider screen readers and assistive technologies when developing. Americans in general are wildly unaware of what a tiny percentage of humanity they are (for reference: about 4%), and this comes up over and over again in HN threads.
noahc 4y ago
Are there other examples of commodities that turned into investments? Tulips? Is that how all many bubbles form?
- bulkprotocol 4y ago
  Unironically as a Nigerian Bitcoin has been a god send. I was and am completely skeptical about crypto given that I believe 99.9% are basically complete scams. However, the idea of a censorship resistant layer of money transfer with no intermediary has worked wonders when our government was restricting access to our own money in our bank accounts. Will Bitcoin be that in the future? Who knows, but the demand is there for sure if you live in a society like this.
  - otterley 4y ago
    Can't Nigerians open bank accounts in a foreign country? Why did you need cryptocurrency to achieve your goals? I can only imagine it's easier to pay for life's essentials with a debit-card issued by a UK or Dubai bank in Nigeria (or cash withdrawn from an ATM using the same card) than it is to pay for those same things with Bitcoin there.
- scoofy 4y ago
  There are lots of books on the history of financial downturns. https://www.goodreads.com/book/show/6372440-this-time-is-different https://www.goodreads.com/book/show/6372440-this-time-is-dif...
Ekaros 4y ago
And there isn't realization that crypto isn't zero-sum market, but actually a negative-sum market. The not insignificant money spend on it running in first place must come from somewhere. Traditional markets are pretty cheap comparatively.
lrvick 4y ago
It does create value. It is an inflation resistant currency I can and very frequently do use to buy things and settle debts. It historically trending up in value is a fantastic and expected bonus because of the inflation resistance and utility. I would keep the same amount of value in bitcoin I do today if the price was truly fixed, or if the price returned to a penny. I will not be selling if it drops to 1k either though losing that much buying power seems unlikely at this point. I want an alternative to the banks, which is the problem bitcoin was created to solve. Not to be a stock. I bought an item for thousands of dollars in bitcoin just this week just to dodge paypal fees. Some of my clients pay me in bitcoin too. I am considering offering a discount for it as it saves me conversion fees. The traders are speculating and most of them do not care about privacy or censorship resistance or using it as a currency so they are just here for the hype and greed. They are fickle and will lose a lot of money. I just buy, hold, and spend, because bitcoin is a currency that, if used without kyc exchanges, offers much better privacy and censorship resistance than visa, paypal, or mastercard. Privacy and censorship resistance are utility. Those betting against the internet succeeding long term as the defacto way of exchanging data were wrong, and those betting against decentralized value storage will be wrong too. It will get worse before it gets stable but I am in it for digital sovereignty above all else.

by scoofy 4y ago

gfodor 4y ago

The crash was in a non-appreciating asset.

jiggawatts 4y ago

“I played Russian roulette and won, you should try it too!” is not a very convincing argument. Nonetheless, the winners think they’re winners because they made the right choices and will try to convince others to follow suit.

lupire 4y ago
It's not Russian roulette. It's "let's all shoot each other and whoever wins gets all the stuff".
- prepend 4y ago
  “My dad played a tontine and won. So should we all.”

kareemsabri 4y ago

Don't people trade in commodities though? Corn and soy and other things fluctuate in price because of their utility and changes in supply and demand, no?

cam0 4y ago
Trading != Investing
scoofy 4y ago
The commodities trade is driven by people needing those commodities. Right? Like, Kellog and Absolut need wheat. They need them because their business relies on them. They are willing to pay a premium, to make sure their supply will be there when it's time to make cereal or vodka. (interesting aside, the best heuristic i ever learned on how to get good vodka, look up the manufactures headquarters/operations location on google maps, and if you don't see grain silos, don't buy the vodka) Who needs bitcoin? Honestly not many people right now. The speculative boom is that, in the future, it becomes internet-cash. Then people will need it, they'll want it a lot to buy things in the internet, and that's fine. If they do, then the value will go up. However, aside from the fact that bitcoin is absolutely not able to handle cash-like transactions at all, there is still no reason for normal people to speculate on it now. If it becomes the de facto internet cash of the future, then, cool, you just exchange for it in the future. The idea that anyone could ever anticipate the future demand of a trivially replaceable ledger of exchange is... honestly insane. I'm not saying it's not worth speculating on, but please, god, don't put any serious portion of your investment portfolio in those types of arbitrary bets!
- nostrademons 4y ago
  "Who needs bitcoin? Honestly not many people right now." Worldwide, lots of people. There's folks in Venezuela and Zimbabwe who need Bitcoin because their national currencies are hyperinflating. There's folks in El Salvador who need Bitcoin because it is their national currency. There's folks fleeing Ukraine who need Bitcoin because their nation is at risk of being swallowed by a large empire. There's folks in Russia who need Bitcoin because their nation is doing the swallowing and getting cut off from the world financial system as a result. There's folks in China (and other countries) who need Bitcoin because their nation can't be trusted not to interfere with private property and it's good to have a little insurance policy on a thumb drive, piece of paper, or memorized. I think that cryptocurrency is one of those areas where people in the developed world look at their own life experience and think "Who could ever need that?", not realizing that they represent a tiny fraction of humanity and that the experience of most of the rest of the world is dramatically different. I work on a product (Android) with about 3B users. I work on a tiny segment of it (tablets & TVs), with about 12% market share combined, and we're always struggling to get the larger org to invest in developing us. But when you run the numbers, you realize that the 12% of Android users with a tablet or TV is about 340M, more than the entire population of the United States. Similarly, the number of mobile phone users with accessibility needs (largely vision difficulties) is also larger than the population of the United States, yet it's awfully hard to get people to consider screen readers and assistive technologies when developing. Americans in general are wildly unaware of what a tiny percentage of humanity they are (for reference: about 4%), and this comes up over and over again in HN threads.

noahc 4y ago

Are there other examples of commodities that turned into investments? Tulips? Is that how all many bubbles form?

bulkprotocol 4y ago
Unironically as a Nigerian Bitcoin has been a god send. I was and am completely skeptical about crypto given that I believe 99.9% are basically complete scams. However, the idea of a censorship resistant layer of money transfer with no intermediary has worked wonders when our government was restricting access to our own money in our bank accounts. Will Bitcoin be that in the future? Who knows, but the demand is there for sure if you live in a society like this.
- otterley 4y ago
  Can't Nigerians open bank accounts in a foreign country? Why did you need cryptocurrency to achieve your goals? I can only imagine it's easier to pay for life's essentials with a debit-card issued by a UK or Dubai bank in Nigeria (or cash withdrawn from an ATM using the same card) than it is to pay for those same things with Bitcoin there.
scoofy 4y ago
There are lots of books on the history of financial downturns. https://www.goodreads.com/book/show/6372440-this-time-is-different https://www.goodreads.com/book/show/6372440-this-time-is-dif...

Ekaros 4y ago

And there isn't realization that crypto isn't zero-sum market, but actually a negative-sum market. The not insignificant money spend on it running in first place must come from somewhere. Traditional markets are pretty cheap comparatively.

lrvick 4y ago

It does create value. It is an inflation resistant currency I can and very frequently do use to buy things and settle debts. It historically trending up in value is a fantastic and expected bonus because of the inflation resistance and utility. I would keep the same amount of value in bitcoin I do today if the price was truly fixed, or if the price returned to a penny. I will not be selling if it drops to 1k either though losing that much buying power seems unlikely at this point. I want an alternative to the banks, which is the problem bitcoin was created to solve. Not to be a stock. I bought an item for thousands of dollars in bitcoin just this week just to dodge paypal fees. Some of my clients pay me in bitcoin too. I am considering offering a discount for it as it saves me conversion fees. The traders are speculating and most of them do not care about privacy or censorship resistance or using it as a currency so they are just here for the hype and greed. They are fickle and will lose a lot of money. I just buy, hold, and spend, because bitcoin is a currency that, if used without kyc exchanges, offers much better privacy and censorship resistance than visa, paypal, or mastercard. Privacy and censorship resistance are utility. Those betting against the internet succeeding long term as the defacto way of exchanging data were wrong, and those betting against decentralized value storage will be wrong too. It will get worse before it gets stable but I am in it for digital sovereignty above all else.