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> It's a self-organizing pyramid scheme > "Market cap"s are inventions. The amount of actual liquidity in the system is tiny Is this different than the stock

> It's a self-organizing pyramid scheme > "Market cap"s are inventions. The amount of actual liquidity in the system is tiny Is this different than the stock market? Or the banking sector? There are penny stocks, and there are bigger players. It seems like in finance, sentiment is everything and it's a self-fulfilling prophecy. > BTC can support c. 7 transactions/sec. Ethereum c. 20 Would you criticize the whole internet because dial-up was slow? Oh, and regarding the vitamins: High-dose vitamin C enhances cancer immunotherapy https://www.science.org/doi/10.1126/scitranslmed.aay8707 https://www.science.org/doi/10.1126/scitranslmed.aay8707 It's all about the dose and delivery method, you can't just make blanket statements. https://www.cancer.gov/research/key-initiatives/ras/ras-central/blog/2020/yun-cantley-vitamin-c https://www.cancer.gov/research/key-initiatives/ras/ras-cent... Note how the vitamins aren't sufficient, but they enhance traditional treatments. Seems relevant.

mjburgess 3y ago
> Is this different than the stock market? There's a scale from "there are buyers at this market cap" (eg., suprisingly, twitter)... to "there are no buyers at this market cap". Consider if you and I start a business which sells shares in the business (and nothing else), and we sell 1/1000 shares for $1000 -- that makes our business $1m on paper. But is there a buyer for that $1m? Well sure, there was for SBF. Until jail, of course -- but many bought his shares in his business which sells shares in his business. This isnt unique to crypto... crypto is just the latest incarnation whose "productive valuation dial" is close to 0%.
- pazimzadeh 3y ago
  It sounds like the only difference is scale. I have not experienced liquidity issues in practice, because I have avoided the tiny players in crypto. Have you had liquidity issues selling ETH or BTC? Regarding hodling, again I don't see how this is different than the stock market. You can try to time the market or you can just hold AAPL for 30 years, understanding that any point it could all come crashing down when you're looking away. In my experience though, every time I have sold ETH (including at the local peak in Jan 2018) it would have always been more profitable to hold it for longer (since I didn't have an immediate use for the cash).
  - mjburgess 3y ago
    The reason the stock market grows is because businesses on that market grow. A factory opens another warehouse; apple invents a new phone. The reason to hold stock is just to wait until your ownership stake (stock) in the business is worth more because the business is more economically productive. A crypto token cannot be economically more productive. The only means by which its value can increase is ponzi-economics, ie., by more people entering the system increasing the *apparent* future demand for that token. When people stop entering the system, tomorrow -- or in a decade -- the whole thing collapses.
    - pazimzadeh 3y ago
      I understand the point you're trying to make but I'm not sure if you've actually proven it. > A crypto token cannot be economically more productive What about when ETH was upgraded to use less power? Or future upgrades to reduce transaction fees? Ditto for the other planned upgrades: https://twitter.com/VitalikButerin/status/1588669782471368704?s=20 https://twitter.com/VitalikButerin/status/158866978247136870... Unless you are arguing that the whole network is worthless, so upgrading something worthless is still worthless? Is that what you're saying? Regarding "The reason the stock market grows is because businesses on that market grow" isn't there also an opposite scenario, where more investments (into factories, etc..) get made by companies/individuals with cash reserves during a recession because prices have come down? https://www.businessofapps.com/data/apple-data/ https://www.businessofapps.com/data/apple-data/ Using AAPL as an example, company revenue has steadily been going up since at least 2005 (with Q1 2008 being a record quarter), so why wasn't it spared during the 2008 recession? Is it not because of meme-nomics in the stock market? Similarly, why do people say "buy on the rumor, sell on the news" if stock market reflects business reality? > When people stop entering the system, tomorrow -- or in a decade -- the whole thing collapses Isn't that exactly what Marx predicted of the capitalist system as a whole? I again fail to see the difference between crypto and the rest of finance. If anything, crypto, seems like a more extreme version of the traditional system (https://en.wikipedia.org/wiki/Accelerationism https://en.wikipedia.org/wiki/Accelerationism) Also, I don't think BTC/ETH would cease to function if the prices went down. You seem to be confusing the promises made by certain charlatans with the actual utility of these assets, which is that they are inherently traceable and can be used to avoid things like this: https://www.yahoo.com/video/pentagon-35-trillion-accounting-black-231154593.html https://www.yahoo.com/video/pentagon-35-trillion-accounting-... And I am aware that they are not the ONLY solution to this problem, but I don't see how you can argue that they have no utility at all.

mjburgess 3y ago

> Is this different than the stock market? There's a scale from "there are buyers at this market cap" (eg., suprisingly, twitter)... to "there are no buyers at this market cap". Consider if you and I start a business which sells shares in the business (and nothing else), and we sell 1/1000 shares for $1000 -- that makes our business $1m on paper. But is there a buyer for that $1m? Well sure, there was for SBF. Until jail, of course -- but many bought his shares in his business which sells shares in his business. This isnt unique to crypto... crypto is just the latest incarnation whose "productive valuation dial" is close to 0%.

pazimzadeh 3y ago
It sounds like the only difference is scale. I have not experienced liquidity issues in practice, because I have avoided the tiny players in crypto. Have you had liquidity issues selling ETH or BTC? Regarding hodling, again I don't see how this is different than the stock market. You can try to time the market or you can just hold AAPL for 30 years, understanding that any point it could all come crashing down when you're looking away. In my experience though, every time I have sold ETH (including at the local peak in Jan 2018) it would have always been more profitable to hold it for longer (since I didn't have an immediate use for the cash).
- mjburgess 3y ago
  The reason the stock market grows is because businesses on that market grow. A factory opens another warehouse; apple invents a new phone. The reason to hold stock is just to wait until your ownership stake (stock) in the business is worth more because the business is more economically productive. A crypto token cannot be economically more productive. The only means by which its value can increase is ponzi-economics, ie., by more people entering the system increasing the *apparent* future demand for that token. When people stop entering the system, tomorrow -- or in a decade -- the whole thing collapses.
  - pazimzadeh 3y ago
    I understand the point you're trying to make but I'm not sure if you've actually proven it. > A crypto token cannot be economically more productive What about when ETH was upgraded to use less power? Or future upgrades to reduce transaction fees? Ditto for the other planned upgrades: https://twitter.com/VitalikButerin/status/1588669782471368704?s=20 https://twitter.com/VitalikButerin/status/158866978247136870... Unless you are arguing that the whole network is worthless, so upgrading something worthless is still worthless? Is that what you're saying? Regarding "The reason the stock market grows is because businesses on that market grow" isn't there also an opposite scenario, where more investments (into factories, etc..) get made by companies/individuals with cash reserves during a recession because prices have come down? https://www.businessofapps.com/data/apple-data/ https://www.businessofapps.com/data/apple-data/ Using AAPL as an example, company revenue has steadily been going up since at least 2005 (with Q1 2008 being a record quarter), so why wasn't it spared during the 2008 recession? Is it not because of meme-nomics in the stock market? Similarly, why do people say "buy on the rumor, sell on the news" if stock market reflects business reality? > When people stop entering the system, tomorrow -- or in a decade -- the whole thing collapses Isn't that exactly what Marx predicted of the capitalist system as a whole? I again fail to see the difference between crypto and the rest of finance. If anything, crypto, seems like a more extreme version of the traditional system (https://en.wikipedia.org/wiki/Accelerationism https://en.wikipedia.org/wiki/Accelerationism) Also, I don't think BTC/ETH would cease to function if the prices went down. You seem to be confusing the promises made by certain charlatans with the actual utility of these assets, which is that they are inherently traceable and can be used to avoid things like this: https://www.yahoo.com/video/pentagon-35-trillion-accounting-black-231154593.html https://www.yahoo.com/video/pentagon-35-trillion-accounting-... And I am aware that they are not the ONLY solution to this problem, but I don't see how you can argue that they have no utility at all.