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This is when I get to say “I told you so”. Excerpt from my 9 month old comment [1] A whole bunch of these startups have sprung up; which take up real money (US

This is when I get to say “I told you so”. Excerpt from my 9 month old comment [1] A whole bunch of these startups have sprung up; which take up real money (USDT or even USD, INR etc.,) promising very attractive guaranteed returns without locking up customers' fund. Look at these[1] for examples. Anyone who knows anything about banking in the traditional world knows how ridiculous it is. And indeed some of these are beginning to unravel[2]. In Anchor's case there are way more lenders than borrowers so Anchor is resorting to pay those high yields from their reserves. It's cutting close to being a Ponzi scheme at the moment. In a traditional banking world businesses take a loan either to cover for a short-term cashflow crunch (example an invoice that's delayed by their client) or for longer term investment. That money usually goes into economic activities which are expected (hoped?) to bear fruit to repay the loan. In the crypto world however such loans are taken only to be put back into the crypto world; to be swapped into some hot new coin to be staked and what not. The music has got to stop at some point. [1] https://news.ycombinator.com/item?id=30335625 https://news.ycombinator.com/item?id=30335625

hanniabu 4y ago
You're still wrong. The issue here isn't crypto, it's centralized entities which act similar to banks. It also failed because user money was stolen and mismanaged by hugely incompetent 20 year olds, not because it was invested in crypto. It's like someone saying the whole stock market is a scam because of Bernie Madoff.
- TremendousJudge 4y ago
  I'd say the difference with the stock market is that that the bottom of it is composed of companies that produce and sell actual, tangible products: cars, planes, oil, computer software, construction materials, etc. All financial instruments (legitimate or not) are built on top of this. You buy into some index fund under the assumption that, on some level, you're putting money into the production of goods and services. Meanwhile, the "crypto market" deals only in hype all the way down. There are no goods and services produced (unless you count "hype"), only dollars going in one end and coming out the other. If I put my dollars in some "crypto investment", it's only so that some early adopter with 50000 btc can get some dollars out. The rest is misdirection.
- twblalock 4y ago
  > It also failed because user money was stolen and mismanaged by hugely incompetent 20 year olds, not because it was invested in crypto. Ah, but you repeat yourself! Almost every actor in crypto is an incompetent 20-something, or an intentionally criminal 20-something. Exchanges like Coinbase might be the "good guys" but when the assets they let you exchange are inherently worthless magic beans and many of them are intentional scams, it's hard to justify the stock market analogy.
spaceman_2020 4y ago
I can't understand the mentality of anyone who buys crypto...and stores it in a centralized exchange. What's the point of holding USDT or USDC if you're going to keep it in a quasi-bank? Isn't the whole point of crypto NOT to trust governments and centralized authorities?
- deleted 4y ago
  [deleted]
- chinabot 4y ago
  Totally agree How do you even know the exchange spent the money on crypto if you dont see the keys, you may have just handed over $$ for a positive transaction on a virtual spreadsheet
- hn_throwaway_99 4y ago
  > Isn't the whole point of crypto NOT to trust governments and centralized authorities? Perhaps originally, but now it is simply a bunch of get-rich-quick schemes, or maybe more accurately wallstreetbets-style gambling. I.e. even if people know it's going to all go to shit, try to play the game long enough and get out before someone pulls out the Jenga piece below you.
  - spaceman_2020 4y ago
    Really sad how crypto devolved into a bunch of "wagmi" nonsense. It was originally meant to be a more serious counterweight to the excess of central bank monetary policies. Now it's just grifters and scammers. Oh well.
    - oblio 4y ago
      Idealistic solutions are vulnerable to this. Decentralized solutions are vulnerable to this. Idealistic decentralized solutions...
      - spaceman_2020 4y ago
tromp 4y ago
> real money (USDT Not really...

hanniabu 4y ago

You're still wrong. The issue here isn't crypto, it's centralized entities which act similar to banks. It also failed because user money was stolen and mismanaged by hugely incompetent 20 year olds, not because it was invested in crypto. It's like someone saying the whole stock market is a scam because of Bernie Madoff.

TremendousJudge 4y ago
I'd say the difference with the stock market is that that the bottom of it is composed of companies that produce and sell actual, tangible products: cars, planes, oil, computer software, construction materials, etc. All financial instruments (legitimate or not) are built on top of this. You buy into some index fund under the assumption that, on some level, you're putting money into the production of goods and services. Meanwhile, the "crypto market" deals only in hype all the way down. There are no goods and services produced (unless you count "hype"), only dollars going in one end and coming out the other. If I put my dollars in some "crypto investment", it's only so that some early adopter with 50000 btc can get some dollars out. The rest is misdirection.
twblalock 4y ago
> It also failed because user money was stolen and mismanaged by hugely incompetent 20 year olds, not because it was invested in crypto. Ah, but you repeat yourself! Almost every actor in crypto is an incompetent 20-something, or an intentionally criminal 20-something. Exchanges like Coinbase might be the "good guys" but when the assets they let you exchange are inherently worthless magic beans and many of them are intentional scams, it's hard to justify the stock market analogy.

spaceman_2020 4y ago

I can't understand the mentality of anyone who buys crypto...and stores it in a centralized exchange. What's the point of holding USDT or USDC if you're going to keep it in a quasi-bank? Isn't the whole point of crypto NOT to trust governments and centralized authorities?

deleted 4y ago
[deleted]
chinabot 4y ago
Totally agree How do you even know the exchange spent the money on crypto if you dont see the keys, you may have just handed over $$ for a positive transaction on a virtual spreadsheet
hn_throwaway_99 4y ago
> Isn't the whole point of crypto NOT to trust governments and centralized authorities? Perhaps originally, but now it is simply a bunch of get-rich-quick schemes, or maybe more accurately wallstreetbets-style gambling. I.e. even if people know it's going to all go to shit, try to play the game long enough and get out before someone pulls out the Jenga piece below you.
- spaceman_2020 4y ago
  Really sad how crypto devolved into a bunch of "wagmi" nonsense. It was originally meant to be a more serious counterweight to the excess of central bank monetary policies. Now it's just grifters and scammers. Oh well.
  - oblio 4y ago
    Idealistic solutions are vulnerable to this. Decentralized solutions are vulnerable to this. Idealistic decentralized solutions...
    - spaceman_2020 4y ago

tromp 4y ago

> real money (USDT Not really...