7 ms·

Interesting choice of friends. All bitcoin (and crypto) is a zero sum game. I don't see the value outside of the sunk cost the energy on mining.

usrusr 4y ago
I think it's safe to assume that the person posting is "bragging for a friend"
deweller 4y ago
Crypto is not a zero-sum game. You may not see it, but there is value in decentralized digital currency.
- malermeister 4y ago
  ... such as? Extraordinary claims require extraordinary evidence.
  - galangalalgol 4y ago
    The idea was that it would be immune to nation states playing fiscal games, but the digital currencies seem to be following the stock markets behavior more closely than things like gold, which seems to imply that isn't the case? Anonymous currencies for purchasing things that are illegal in the jurisdiction of the seller and/or buyer certainly have a value, but more as a service than a currency, so I wouldn't expect to make money sitting on coins. Instead I'd expect the payoff to be for buying them from the illegal sellers to sell to the illegal buyers. Essentially, being a launderer with possibly lower risk and less effort than in the past.
    - malermeister 4y ago
      I'm not sure that enabling illegal things is a positive value though. Sure, there might be some things that are banned for dumb reasons (cannabis comes to mind), but if you enable any and all commerce, you end up also enabling stuff like assassinations and child abuse. Imo a currency that makes those possible has negative value. Regarding the "fiscal games" by nation states part - in democratic societies those "games" are policy decisions, voted for by the people. I find trying to circumvent the will of the people as expressed in a democratic vote morally questionable, and think that enabling antidemocratic behavior, too, is negative value. (Not to mention that it doesn't work anyways, as you noted).
      - galangalalgol 4y ago
        I was talking about economic or market value, not societal or moral value. While I agree that that enabling child abuse or trafficking in people is a societal negative value, that sadly does not mean there isn't a positive market value for doing so. When you live in a nation whose bank's decisions don't influence the world economy, you don't get a vote when those nations decide to raise or lower interest rates, or to suppress the value of their currencies, or have trade wars with each other. The idea of insulating yourself from those decisions that you did not vote on is attractive, but it now seems like more traditional assets are likely a better approach.
      - ziddoap 4y ago
        >Imo a currency that makes those possible has negative value. 'Regular' currency has been used for all sorts of nefarious things since the dawn of currency, including assassinations and child trafficking and such. Nothing about USD/EUR/CAD/etc. inherently makes it impossible to purchase or participate in illegal goods/activities. I'm not in favor of cryptocurrency, but the argument that cryptocurrency is the thing enables bad things to be bought/sold is a really tired argument and seems to forget all of human history prior to the last 10 years.
        ALittleLight 4y ago
        If this were true then cryptocurrency would not replace regular currency for drugs, assassinations, and dark market activities generally. I believe KYC, banking regulations, and traceability all reduce the utility of conventional money for bad things. You can't easily transfer large amounts of money without leaving a trail that investigators may find in the conventional system. Bitcoin solves this!
        ziddoap 4y ago
        What do you mean "If this were true [...]" ? How do you think crimes were paid for before BTC? On a related note, my dealer takes cash and even accepts electronic transfers, but not BTC.
      - 4y ago
  - prvit 4y ago
    That decentralized digital currencies provide no value is the extraordinary claim. It's a statement that is obviously false to anyone who's been following mainstream news in the past years. Darknet markets exist, are not a big secret, and are largely enabled by cryptocurrencies. This stuff has been in mainstream press since 2013.
    - malermeister 4y ago
      > Darknet markets exist, are not a big secret, and are largely enabled by cryptocurrencies. Ask people if they think a market for criminals to exchange illegal goods and services provides positive value and you'll find that most don't think it does. Just cause there's money to be made, doesn't mean value is created or otherwise robberies would be quite valuable too.
      - prvit 4y ago
        Given that there are voluntary buyers and sellers choosing to engage in these exchanges of real products, the suggestion that no value is created directly contradicts very basic economic theory.
        malermeister 4y ago
        Economy is not the only indicator of value and to treat it as such is an overly reductive view of the world. If a market enables breaking of laws created by democratic processes, any economic value is outweighed by its negative societal and democratic value.
        prvit 4y ago
        Even if the outcome isn't net positive, that doesn't mean that there is no value created.
        malermeister 4y ago
        I suppose that is true, but also very nitpicky. Let me rephrase: no net value is created. If you win 50 bucks in a casino and spent 100 betting, I suppose you technically "won" 50 bucks, but in colloquial use of language it'd be more correct to say you lost 50 bucks.
- throwaway0asd 4y ago
  In theory or practice? Where is this value hiding? Everybody has been watching for the past decade and that value has yet to materialize.
  - pezure 4y ago
    I'm not a fan of and don't own any crypto, but in fairness Matt Levine points out that joint stock companies were mostly scams for ~a century and ended up changing the world. Just because something doesn't reveal its value for even 100+ years doesn't mean it doesn't actually have value. That said you might be dead before it materializes.
    - LegitShady 4y ago
      "this might not be a scam 100 years from now" sounds like the most stupid "i am very smart" point a person might make about crypto. "well sure its a scam now, but in 100 years from now..." "Nobody cares matt" but then it turns out there's an army of crypto fools who repeat any stupid point he makes without reflecting on the value of those points.
      - pezure 4y ago
        I don't really get your reaction here. The obvious takeaway from that point is a) determining the impact of any given technology is difficult and may take decades to centuries, and b) you should be aware that even IF your assessment of the technology is correct in the long term, you could still lose all of your money by investing in it. It's in no way an endorsement of investing in crypto, and I don't think he's responsible for every conman who will selectively quote him to shill a product.
  - prvit 4y ago
    For example, darknet markets deliver very real value.
    - codegeek 4y ago
      So basically illegal activities.
- Schroedingersat 4y ago
  Wake us up when someone invents one then, rather than a tool to assign all surplus trade value to capital holders.
- macksd 4y ago
  Oh I agree, and yet it seems that an astonishingly small portion of crypto transactions are actually decentralized, or as currency. Until that changes, every conversation I have on the matter seems to end with "no bro, you'll see."
NickM 4y ago
It’s worse than a zero sum game; unless the utility gained outweighs the value of all the energy spent on mining (which it clearly doesn’t) then it’s actually a negative sum game.
deleted 4y ago
[deleted]
dcolkitt 4y ago
Honest question, do you think there is zero value to stablecoins? There's obviously huge demand for dollar assets in middle income countries without easy access to dollarized banking. In countries like Turkey or Argentina or Nigeria, stablecoins have achieved widespread adoption because they're far safer form of savings than inflationary local currency. It's hard for me to imagine how that's zero-sum.
- ChrisLomont 4y ago
  >do you think there is zero value to stablecoins? So far they've failed to be stable, so I'm not sure what other aspect you would consider valuable. Such things have failed through all of history. Adding crypto as a buzzword doesn't make them stable.
  - svnt 4y ago
    Arguing that things that have never worked before will continue to not work, barring obvious violations of the laws of physics, has a pretty poor history. A global stablecoin is one area where decentralization might make a significant difference in utility.
    - ChrisLomont 4y ago
      >has a pretty poor history It has a terrific history - you must be not counting all the stuff that fails for previously known reasons that people try again. Sure, if you only cherry pick post hoc examples of things that eventually worked, then you can claim a poor history. But the correct evaluation is to pick all things being tried right now by any person on the planet, and measure how many were new and worked for the first time. You know what does have a poor history? People claiming something will work because they once saw some unrelated thing work and assuming that means all things will work, no matter what the previous evidence. >barring obvious violations of the laws of physics Why limit yourself to physics? Those are not the only laws that govern how societal structures work. Also is it possible that the reason some dreams in economics fail because they eventually hit physics? The same works for crypto. Santa isn't real. Unicorns don't live in the chimney. There is no free energy, despite probably 10s to 100s of thousands of people and inventions that said there were. All those people that found counterexamples to Fermat's Last Theorem were wrong. The list of medical things tried well after they were known to be wrong is astounding, and none of those things will likely ever, ever work. I could go on and on. It's far easier to make up stuff that will not work than to make up stuff that possibly could work or definitely works. So no, most things that currently don't work will never work, which is how we acquired the knowledge we have - we ruled out dumb and stupid things. There is a tiny, tiny sliver on the edge that is undecided, and that is where almost all new things and inventions come from. The vast landscape of settled knowledge will stay that way. So, as to stablecoins, and mostly crypto in general - this is what happens when programmers generally wildly ignorant of the reasons for how modern finance work try to make modern finance. Since they're mostly ignorant of why the system has evolved to where it is over millennia of knowledge, they're simply trying to reinvent all that stuff one destroyed speculator at a time. The current stable coins imploded as nearly anyone with much knowledge about econ would have guessed. I didn't follow them closely, but one night a friend carefully explained all the processes behind (I think it was) Luna. At one point I told him that the pieces he explained form a dynamic equilibrium instead of a static equilibrium, which means a little perturbation and the whole things goes off the rails. He remarked that my insight, after hearing the details for the first time, was exactly what did happen. It's funny watching crypto slowly try to reinvent every financial item that failed and do exactly the same things that caused previous things to fail. Stable coins are not new, after all. It baffles me that people keep trying to do things that are simply dumb, either out of hubris, greed, or ignorance. Good luck on whatever stable coins you expect to happen. If they keep it up long enough they might eventually invent financial derivatives, but I expect that to be when the world has already moved past those and found yet better products.

usrusr 4y ago

I think it's safe to assume that the person posting is "bragging for a friend"

deweller 4y ago

Crypto is not a zero-sum game. You may not see it, but there is value in decentralized digital currency.

malermeister 4y ago
... such as? Extraordinary claims require extraordinary evidence.
- galangalalgol 4y ago
  The idea was that it would be immune to nation states playing fiscal games, but the digital currencies seem to be following the stock markets behavior more closely than things like gold, which seems to imply that isn't the case? Anonymous currencies for purchasing things that are illegal in the jurisdiction of the seller and/or buyer certainly have a value, but more as a service than a currency, so I wouldn't expect to make money sitting on coins. Instead I'd expect the payoff to be for buying them from the illegal sellers to sell to the illegal buyers. Essentially, being a launderer with possibly lower risk and less effort than in the past.
  - malermeister 4y ago
    I'm not sure that enabling illegal things is a positive value though. Sure, there might be some things that are banned for dumb reasons (cannabis comes to mind), but if you enable any and all commerce, you end up also enabling stuff like assassinations and child abuse. Imo a currency that makes those possible has negative value. Regarding the "fiscal games" by nation states part - in democratic societies those "games" are policy decisions, voted for by the people. I find trying to circumvent the will of the people as expressed in a democratic vote morally questionable, and think that enabling antidemocratic behavior, too, is negative value. (Not to mention that it doesn't work anyways, as you noted).
    - galangalalgol 4y ago
      I was talking about economic or market value, not societal or moral value. While I agree that that enabling child abuse or trafficking in people is a societal negative value, that sadly does not mean there isn't a positive market value for doing so. When you live in a nation whose bank's decisions don't influence the world economy, you don't get a vote when those nations decide to raise or lower interest rates, or to suppress the value of their currencies, or have trade wars with each other. The idea of insulating yourself from those decisions that you did not vote on is attractive, but it now seems like more traditional assets are likely a better approach.
    - ziddoap 4y ago
      >Imo a currency that makes those possible has negative value. 'Regular' currency has been used for all sorts of nefarious things since the dawn of currency, including assassinations and child trafficking and such. Nothing about USD/EUR/CAD/etc. inherently makes it impossible to purchase or participate in illegal goods/activities. I'm not in favor of cryptocurrency, but the argument that cryptocurrency is the thing enables bad things to be bought/sold is a really tired argument and seems to forget all of human history prior to the last 10 years.
      - ALittleLight 4y ago
        If this were true then cryptocurrency would not replace regular currency for drugs, assassinations, and dark market activities generally. I believe KYC, banking regulations, and traceability all reduce the utility of conventional money for bad things. You can't easily transfer large amounts of money without leaving a trail that investigators may find in the conventional system. Bitcoin solves this!
        ziddoap 4y ago
        What do you mean "If this were true [...]" ? How do you think crimes were paid for before BTC? On a related note, my dealer takes cash and even accepts electronic transfers, but not BTC.
    - 4y ago
- prvit 4y ago
  That decentralized digital currencies provide no value is the extraordinary claim. It's a statement that is obviously false to anyone who's been following mainstream news in the past years. Darknet markets exist, are not a big secret, and are largely enabled by cryptocurrencies. This stuff has been in mainstream press since 2013.
  - malermeister 4y ago
    > Darknet markets exist, are not a big secret, and are largely enabled by cryptocurrencies. Ask people if they think a market for criminals to exchange illegal goods and services provides positive value and you'll find that most don't think it does. Just cause there's money to be made, doesn't mean value is created or otherwise robberies would be quite valuable too.
    - prvit 4y ago
      Given that there are voluntary buyers and sellers choosing to engage in these exchanges of real products, the suggestion that no value is created directly contradicts very basic economic theory.
      - malermeister 4y ago
        Economy is not the only indicator of value and to treat it as such is an overly reductive view of the world. If a market enables breaking of laws created by democratic processes, any economic value is outweighed by its negative societal and democratic value.
        prvit 4y ago
        Even if the outcome isn't net positive, that doesn't mean that there is no value created.
        malermeister 4y ago
        I suppose that is true, but also very nitpicky. Let me rephrase: no net value is created. If you win 50 bucks in a casino and spent 100 betting, I suppose you technically "won" 50 bucks, but in colloquial use of language it'd be more correct to say you lost 50 bucks.
throwaway0asd 4y ago
In theory or practice? Where is this value hiding? Everybody has been watching for the past decade and that value has yet to materialize.
- pezure 4y ago
  I'm not a fan of and don't own any crypto, but in fairness Matt Levine points out that joint stock companies were mostly scams for ~a century and ended up changing the world. Just because something doesn't reveal its value for even 100+ years doesn't mean it doesn't actually have value. That said you might be dead before it materializes.
  - LegitShady 4y ago
    "this might not be a scam 100 years from now" sounds like the most stupid "i am very smart" point a person might make about crypto. "well sure its a scam now, but in 100 years from now..." "Nobody cares matt" but then it turns out there's an army of crypto fools who repeat any stupid point he makes without reflecting on the value of those points.
    - pezure 4y ago
      I don't really get your reaction here. The obvious takeaway from that point is a) determining the impact of any given technology is difficult and may take decades to centuries, and b) you should be aware that even IF your assessment of the technology is correct in the long term, you could still lose all of your money by investing in it. It's in no way an endorsement of investing in crypto, and I don't think he's responsible for every conman who will selectively quote him to shill a product.
- prvit 4y ago
  For example, darknet markets deliver very real value.
  - codegeek 4y ago
    So basically illegal activities.
Schroedingersat 4y ago
Wake us up when someone invents one then, rather than a tool to assign all surplus trade value to capital holders.
macksd 4y ago
Oh I agree, and yet it seems that an astonishingly small portion of crypto transactions are actually decentralized, or as currency. Until that changes, every conversation I have on the matter seems to end with "no bro, you'll see."

NickM 4y ago

It’s worse than a zero sum game; unless the utility gained outweighs the value of all the energy spent on mining (which it clearly doesn’t) then it’s actually a negative sum game.

deleted 4y ago

[deleted]

dcolkitt 4y ago

Honest question, do you think there is zero value to stablecoins? There's obviously huge demand for dollar assets in middle income countries without easy access to dollarized banking. In countries like Turkey or Argentina or Nigeria, stablecoins have achieved widespread adoption because they're far safer form of savings than inflationary local currency. It's hard for me to imagine how that's zero-sum.

ChrisLomont 4y ago
>do you think there is zero value to stablecoins? So far they've failed to be stable, so I'm not sure what other aspect you would consider valuable. Such things have failed through all of history. Adding crypto as a buzzword doesn't make them stable.
- svnt 4y ago
  Arguing that things that have never worked before will continue to not work, barring obvious violations of the laws of physics, has a pretty poor history. A global stablecoin is one area where decentralization might make a significant difference in utility.
  - ChrisLomont 4y ago
    >has a pretty poor history It has a terrific history - you must be not counting all the stuff that fails for previously known reasons that people try again. Sure, if you only cherry pick post hoc examples of things that eventually worked, then you can claim a poor history. But the correct evaluation is to pick all things being tried right now by any person on the planet, and measure how many were new and worked for the first time. You know what does have a poor history? People claiming something will work because they once saw some unrelated thing work and assuming that means all things will work, no matter what the previous evidence. >barring obvious violations of the laws of physics Why limit yourself to physics? Those are not the only laws that govern how societal structures work. Also is it possible that the reason some dreams in economics fail because they eventually hit physics? The same works for crypto. Santa isn't real. Unicorns don't live in the chimney. There is no free energy, despite probably 10s to 100s of thousands of people and inventions that said there were. All those people that found counterexamples to Fermat's Last Theorem were wrong. The list of medical things tried well after they were known to be wrong is astounding, and none of those things will likely ever, ever work. I could go on and on. It's far easier to make up stuff that will not work than to make up stuff that possibly could work or definitely works. So no, most things that currently don't work will never work, which is how we acquired the knowledge we have - we ruled out dumb and stupid things. There is a tiny, tiny sliver on the edge that is undecided, and that is where almost all new things and inventions come from. The vast landscape of settled knowledge will stay that way. So, as to stablecoins, and mostly crypto in general - this is what happens when programmers generally wildly ignorant of the reasons for how modern finance work try to make modern finance. Since they're mostly ignorant of why the system has evolved to where it is over millennia of knowledge, they're simply trying to reinvent all that stuff one destroyed speculator at a time. The current stable coins imploded as nearly anyone with much knowledge about econ would have guessed. I didn't follow them closely, but one night a friend carefully explained all the processes behind (I think it was) Luna. At one point I told him that the pieces he explained form a dynamic equilibrium instead of a static equilibrium, which means a little perturbation and the whole things goes off the rails. He remarked that my insight, after hearing the details for the first time, was exactly what did happen. It's funny watching crypto slowly try to reinvent every financial item that failed and do exactly the same things that caused previous things to fail. Stable coins are not new, after all. It baffles me that people keep trying to do things that are simply dumb, either out of hubris, greed, or ignorance. Good luck on whatever stable coins you expect to happen. If they keep it up long enough they might eventually invent financial derivatives, but I expect that to be when the world has already moved past those and found yet better products.