6 ms·

Anytime I read an article about crypto, I feel as if I'm reading the review to a fantasy novel. Like, is any of this real? The words all sound made up.

john_alan 4y ago
I imagine all these rich, successful people investing in this stuff must know something you don't
- pavlov 4y ago
  People like Sequoia and the Ontario Teachers' Pension Plan who invested tens of millions into FTX last year, and whose investment is most likely worthless now? Smart people make bad investments too, often out of FOMO.
  - djtango 4y ago
    The FOMO can get institutionalised. When you are incentivised to chase funding (as a GP) if you aren't doing the cypto thing, your LPs will go with another fund and/or you'll get redeemed. And if you have to go in on crypto, FTX was supposed to be a sure bet
- dvt 4y ago
  This might be satire, but in case it isn't: there are plenty of very rich people that are very dumb. And plenty of brilliant people that are destitute. This disparity is even moreso skewed in industries like finance, which tends to favor luck way more than, e.g., in startup land where you need things like customers and product market fit, so "faking it until you make it" is much harder. Most of the "investment" that companies like OpenSea/FTX/etc. have been getting is pure gambling by the likes of a16z and other institutional investors. There's no traditional "exit" to pursue here, and the whole strategy is essentially a pump and dump (often involving arcane tokenomics) where VCs dump on retail and make 10-100x returns. There's no technology, no value, hardly any users, and if you're not sure who the sucker is, it's probably you.
  - senttoschool 4y ago
    and the whole strategy is essentially a pump and dump (often involving arcane tokenomics) where VCs dump on retail and make 10-100x returns. A lot of people didn't see this. VCs used their reputation to pump a token. Then they dump the token almost immediately on retail. This was a much faster way to make money than waiting years for a traditional startup to exit. VCs were in on the scams. This is why I lost complete respect for a16z and hate that crypto-shill Garry Tan will run Y Combinator.
    - dvt 4y ago
      > This is why I lost complete respect for a16z and hate that crypto-shill Garry Tan will run Y Combinator. Even though I understand this from an ethical standpoint, this is the entire job of venture capital: make a ton of money as fast as possible while minimizing risk. Crypto is literally the perfect vehicle for this. They can't do this in traditional markets because actual hedge funds like Jane Street and Two Sigma will absolutely demolish them. So I think that a16z, Sequoia, etc. have been brilliantly making their clients a lot of money. If we had money in their fund, we'd both probably be very happy campers. I blame governments for being slow regulating crypto and I blame individuals for being greedy. Imo, blaming VCs for making money is like blaming water it's wet.
      - senttoschool 4y ago
        I blame governments for being slow regulating crypto and I blame individuals for being greedy. Imo, blaming VCs for making money is like blaming water it's wet. I'm not blaming them. I just lost respect for them.
      - prepend 4y ago
        > make a ton of money as fast as possible while minimizing risk. I like to think that the right way to do this is by creating lots of lasting value. Many VC wins make them money and create value for the company, employees, users, world. It’s not exclusive that they must create fake bullshit to make money. Funding Apple makes money and results in hardware, software, and innovation. Pumping lottery and Ponzi schemes just exploits value from poor suckers.
- senttoschool 4y ago
  Crypto is a transfer of wealth from the poor to the rich. This is because the poor is hoping to get rich quick. But the rich has all the inside information in an unregulated environment as well as the ability to pump and dump. Occasionally, someone poor makes money and tells his friends about his new lambo - hoping to get others into the scam/ponzi.
  - ETH_start 4y ago
    Regulations, i.e. centralized control via the SEC, doesn't help the poor. All of the massive returns since the SEC's entry into the crypto market in 2017 have been reserved for venture capital funds. Before 2017, ordinary people were able to participate in Ethereum's token crowdsale and subsequently get returns of 1000X. Narratives like yours are peddled to the poor to manufacture consent for anti-capitalist "consumer protection" laws that deprive them of investment options, so that insiders gain a competitive advantage over them.
    - senttoschool 4y ago
      99% of projects that had ICOs before 2017 are dead. All investors were wiped out. Founders who raised money were free to use the money however they want, including for personal purchases, insider trading, etc. Guess who got wiped out the most? The uninformed poor people.
      - ETH_start 4y ago
        The market capitalization of projects that did token sales before 2017 is orders of magnitude greater than the amount invested in token sales before 2017, meaning investors in pre-2017 token sales are, in the aggregate, massively up. This is what venture capital investing is: you invest in 100 projects to hit one homerun. Here is a good paper showing that token sale investments were primarily small, and opening up the venture capital market to the broader public: https://link.springer.com/article/10.1007/s11408-020-00366-0 https://link.springer.com/article/10.1007/s11408-020-00366-0 You need to insist otherwise because thousands of regulator jobs, and dozens of venture capital funds, depend on it. The poor are just the propaganda fodder the insiders cynically use to gain a political mandate for their repression of the poor.
- prepend 4y ago
  Obviously. If Matt Damon and Kim Kardashian think it’s a good idea and promote it, it must be good, right?
pavlov 4y ago
Even the names of the people are on-the-nose parody. FTX's founder is Sam Bankman-Fried. Sam rhymes with scam, and as of yesterday he's officially a fried bankman. All this would be too ridiculous for a novel.
- djbusby 4y ago
  Remus Lupin was a werewolf and Sirius was a dog!
fourstar 4y ago
I do the same with government.
highwaylights 4y ago
$420.69 million dollar round. 69 investors (one of whom was the Ontario Teachers Pension Plan - one of the largest retirement funds in Canada). When I think "prudent retirement planning based on low risk, sound long-term principles" I think of a group of bros giggling at how many weed and sex references they could jam into their sales pitch.
- thundergolfer 4y ago
  Jeez that’s shameful. What kind of capital management system lets crypto within 100 miles of a pension plan.
- onlyrealcuzzo 4y ago
  Such is life when you're forced to buy negative yielding bonds from the government and still get a return for your investors.
  - tomp 4y ago
    I mean, the issue is that positive yield bonds exist… like, why is the government just printing money?! The only correct risk-free interest rate is 0%. Wanna return? Invest and risk!
    - atdrummond 4y ago
      Bonds aren’t risk free. Just asking holders of Argentina’s.
      - pjc50 4y ago
        Well, yes. That's why bonds have a positive and also variable yield. I guess the parent poster doesn't understand the difference between yield and coupon.
    - pjc50 4y ago
      sigh Whether the bonds have a positive yield and how currency is issued have no relation. There have been plenty of positive yield bonds during the gold standard. Indeed, "hard money" standards tend to make borrowing at high interest rates more necessary. This is like the bizarre argument sometimes made that hard money will end war; that's not how it works. The war will happen anyway and a means will be found to pay for it. Gold was heavily used as an inter-governmental currency in WW2 - resulting in a few very expensive shipwrecks.
lizknope 4y ago
Yes it is all made up. Or about 95% made up with a tiny amount of actual USD or Euros Just listen to Sam Bankman-Fraud on a financial podcast describe his magical ponzi box. Well now the thing anyone with a brain would have said sounds like a scam has been exposed as a scam. https://www.youtube.com/watch?v=C6nAxiym9oc https://www.youtube.com/watch?v=C6nAxiym9oc

john_alan 4y ago

I imagine all these rich, successful people investing in this stuff must know something you don't

pavlov 4y ago
People like Sequoia and the Ontario Teachers' Pension Plan who invested tens of millions into FTX last year, and whose investment is most likely worthless now? Smart people make bad investments too, often out of FOMO.
- djtango 4y ago
  The FOMO can get institutionalised. When you are incentivised to chase funding (as a GP) if you aren't doing the cypto thing, your LPs will go with another fund and/or you'll get redeemed. And if you have to go in on crypto, FTX was supposed to be a sure bet
dvt 4y ago
This might be satire, but in case it isn't: there are plenty of very rich people that are very dumb. And plenty of brilliant people that are destitute. This disparity is even moreso skewed in industries like finance, which tends to favor luck way more than, e.g., in startup land where you need things like customers and product market fit, so "faking it until you make it" is much harder. Most of the "investment" that companies like OpenSea/FTX/etc. have been getting is pure gambling by the likes of a16z and other institutional investors. There's no traditional "exit" to pursue here, and the whole strategy is essentially a pump and dump (often involving arcane tokenomics) where VCs dump on retail and make 10-100x returns. There's no technology, no value, hardly any users, and if you're not sure who the sucker is, it's probably you.
- senttoschool 4y ago
  and the whole strategy is essentially a pump and dump (often involving arcane tokenomics) where VCs dump on retail and make 10-100x returns. A lot of people didn't see this. VCs used their reputation to pump a token. Then they dump the token almost immediately on retail. This was a much faster way to make money than waiting years for a traditional startup to exit. VCs were in on the scams. This is why I lost complete respect for a16z and hate that crypto-shill Garry Tan will run Y Combinator.
  - dvt 4y ago
    > This is why I lost complete respect for a16z and hate that crypto-shill Garry Tan will run Y Combinator. Even though I understand this from an ethical standpoint, this is the entire job of venture capital: make a ton of money as fast as possible while minimizing risk. Crypto is literally the perfect vehicle for this. They can't do this in traditional markets because actual hedge funds like Jane Street and Two Sigma will absolutely demolish them. So I think that a16z, Sequoia, etc. have been brilliantly making their clients a lot of money. If we had money in their fund, we'd both probably be very happy campers. I blame governments for being slow regulating crypto and I blame individuals for being greedy. Imo, blaming VCs for making money is like blaming water it's wet.
    - senttoschool 4y ago
      I blame governments for being slow regulating crypto and I blame individuals for being greedy. Imo, blaming VCs for making money is like blaming water it's wet. I'm not blaming them. I just lost respect for them.
    - prepend 4y ago
      > make a ton of money as fast as possible while minimizing risk. I like to think that the right way to do this is by creating lots of lasting value. Many VC wins make them money and create value for the company, employees, users, world. It’s not exclusive that they must create fake bullshit to make money. Funding Apple makes money and results in hardware, software, and innovation. Pumping lottery and Ponzi schemes just exploits value from poor suckers.
senttoschool 4y ago
Crypto is a transfer of wealth from the poor to the rich. This is because the poor is hoping to get rich quick. But the rich has all the inside information in an unregulated environment as well as the ability to pump and dump. Occasionally, someone poor makes money and tells his friends about his new lambo - hoping to get others into the scam/ponzi.
- ETH_start 4y ago
  Regulations, i.e. centralized control via the SEC, doesn't help the poor. All of the massive returns since the SEC's entry into the crypto market in 2017 have been reserved for venture capital funds. Before 2017, ordinary people were able to participate in Ethereum's token crowdsale and subsequently get returns of 1000X. Narratives like yours are peddled to the poor to manufacture consent for anti-capitalist "consumer protection" laws that deprive them of investment options, so that insiders gain a competitive advantage over them.
  - senttoschool 4y ago
    99% of projects that had ICOs before 2017 are dead. All investors were wiped out. Founders who raised money were free to use the money however they want, including for personal purchases, insider trading, etc. Guess who got wiped out the most? The uninformed poor people.
    - ETH_start 4y ago
      The market capitalization of projects that did token sales before 2017 is orders of magnitude greater than the amount invested in token sales before 2017, meaning investors in pre-2017 token sales are, in the aggregate, massively up. This is what venture capital investing is: you invest in 100 projects to hit one homerun. Here is a good paper showing that token sale investments were primarily small, and opening up the venture capital market to the broader public: https://link.springer.com/article/10.1007/s11408-020-00366-0 https://link.springer.com/article/10.1007/s11408-020-00366-0 You need to insist otherwise because thousands of regulator jobs, and dozens of venture capital funds, depend on it. The poor are just the propaganda fodder the insiders cynically use to gain a political mandate for their repression of the poor.
prepend 4y ago
Obviously. If Matt Damon and Kim Kardashian think it’s a good idea and promote it, it must be good, right?

pavlov 4y ago

Even the names of the people are on-the-nose parody. FTX's founder is Sam Bankman-Fried. Sam rhymes with scam, and as of yesterday he's officially a fried bankman. All this would be too ridiculous for a novel.

djbusby 4y ago
Remus Lupin was a werewolf and Sirius was a dog!

fourstar 4y ago

I do the same with government.

highwaylights 4y ago

$420.69 million dollar round. 69 investors (one of whom was the Ontario Teachers Pension Plan - one of the largest retirement funds in Canada). When I think "prudent retirement planning based on low risk, sound long-term principles" I think of a group of bros giggling at how many weed and sex references they could jam into their sales pitch.

thundergolfer 4y ago
Jeez that’s shameful. What kind of capital management system lets crypto within 100 miles of a pension plan.
onlyrealcuzzo 4y ago
Such is life when you're forced to buy negative yielding bonds from the government and still get a return for your investors.
- tomp 4y ago
  I mean, the issue is that positive yield bonds exist… like, why is the government just printing money?! The only correct risk-free interest rate is 0%. Wanna return? Invest and risk!
  - atdrummond 4y ago
    Bonds aren’t risk free. Just asking holders of Argentina’s.
    - pjc50 4y ago
      Well, yes. That's why bonds have a positive and also variable yield. I guess the parent poster doesn't understand the difference between yield and coupon.
  - pjc50 4y ago
    sigh Whether the bonds have a positive yield and how currency is issued have no relation. There have been plenty of positive yield bonds during the gold standard. Indeed, "hard money" standards tend to make borrowing at high interest rates more necessary. This is like the bizarre argument sometimes made that hard money will end war; that's not how it works. The war will happen anyway and a means will be found to pay for it. Gold was heavily used as an inter-governmental currency in WW2 - resulting in a few very expensive shipwrecks.

lizknope 4y ago

Yes it is all made up. Or about 95% made up with a tiny amount of actual USD or Euros Just listen to Sam Bankman-Fraud on a financial podcast describe his magical ponzi box. Well now the thing anyone with a brain would have said sounds like a scam has been exposed as a scam. https://www.youtube.com/watch?v=C6nAxiym9oc https://www.youtube.com/watch?v=C6nAxiym9oc