4 ms·

The paper that you linked doesn't say that 75% of crypto activity is speculation, at least as far as I can tell. Are you referring to the line that says >Start

The paper that you linked doesn't say that 75% of crypto activity is speculation, at least as far as I can tell. Are you referring to the line that says >Starting from 2015, 75% of the real bitcoin volume has been linked to exchanges or exchange-like entities such as on-line wallets, OTC desks, and large institutional traders. Because there is certainly plenty of speculation outside of those entities. And for the traditional financial system, when you said "see below", are you referring to the ratio of forex volume to global GDP? Because those metrics are terrible proxies for "global financial activity" or "speculation" I would recommend doing some reading on what GDP is, and how it's calculated. It's not the same thing as the total volume of transactions, or even in the same ballpark. The United States alone had more than $128T in just non-cash payments in 2021 (https://www.federalreserve.gov/paymentsystems/fr-payments-study.htm https://www.federalreserve.gov/paymentsystems/fr-payments-st...) You should also understand that all forex activity is not speculation. I would think that global trade would fall under the bucket of "economically meaningful activity", no?

EscapeFromNY 3y ago
> Because there is certainly plenty of speculation outside of those entities. Sure. And there's plenty of non-speculative activity outside of those entities as well. The paper explicitly looks at on-chain activity only. > Because those metrics are terrible proxies for "global financial activity" or "speculation" Maybe so. I put forward my sources, but there could be a better way of calculating it. My broader point was that speculation is the majority of activity, and I doubt that's any different whether you're talking about fiat, gold, oil, crypto, or any other widely used asset/asset class. If you had to calculate that same statistic, what methodology would you use? > You should also understand that all forex activity is not speculation. I would think that global trade would fall under the bucket of "economically meaningful activity", no? In one sense it is meaningful, in another sense it's just a middleman market maker taking their cut, due to the inefficiency of humans having multiple currencies. Either way I don't see how the meaningfulness of trade changes once you introduce crypto. Say I'm subscribed to a Australian musician's patreon. I send her USD, then a middleman sells that USD and gives her AUD. I also support a French musician. I send him BTC. He (or a middleman) sells that BTC for EUR. How can you say either of those situations is more or less economically meaningful?
- greatwave1 3y ago
  > the data is in the paper I linked. 75% of bitcoin volume is speculation. > Sure. And there's plenty of non-speculative activity outside of those entities as well. The paper explicitly looks at on-chain activity only. You claimed that 75% of bitcoin volume was speculation. There is nothing in the paper to support this claim. I'm not arguing that there is 0 non-speculative activity, I'm saying that it is significantly less than 25%, and you're making up bogus statistics that aren't supported by your sources in the way that you say they are. > Say I'm subscribed to a Australian musician's patreon. I send her USD, then a middleman sells that USD and gives her AUD. I also support a French musician. I send him BTC. He (or a middleman) sells that BTC for EUR. How can you say either of those situations is more or less economically meaningful? Yes, these are both economically meaningful. This type of transaction is much more common in the fiat world than it is in the crypto world (where speculation and wash trading drive the majority of transactions). Currency speculators make up a tiny portion of the real-world economy, while they make up the vast majority of the crypto economy.
  - EscapeFromNY 3y ago
    > There is nothing in the paper to support this claim The paper literally says, "75% of the real bitcoin volume has been linked to exchanges or exchange-like entities" You may think the source isn't perfect, but at least I'm bringing some objective data to the conversation. If you disagree, please show me some data of your own instead of just repeating your preconceived bias (which I'm aware of already) I repeat: If you had to calculate that same statistic, what methodology would you use? > This type of transaction is much more common in the fiat world than it is in the crypto world Source? > where speculation and wash trading drive the majority of transactions Source? > Currency speculators make up a tiny portion of the real-world economy Source? > while they make up the vast majority of the crypto economy. Source? Those were some mighty bold claims.
    - greatwave1 3y ago
      > The paper literally says, "75% of the real bitcoin volume has been linked to exchanges or exchange-like entities" Which is an entirely different metric than the % of bitcoin volume that's speculation. If I link a paper that says "1% of squirrels are albino", and I claim that it says that 1% of bitcoin trading is speculative, then I'm not "bringing objective data to the conversation"... I'm just lying My original comment was What do you think the ratio of speculation and illegal activity to legitimate use cases is? I'd be willing to be it's greater than 10:1, maybe even 100:1 You responded by lying and trying to shut down any actual data-driven discussion > You don't have to bet, the data is in the paper I linked. 75% of bitcoin volume is speculation. And then you have the audacity to ask for a source on the claim that "currency speculators make up a tiny portion of the real-world economy"? How many people do you know who are participants in the real world economy (should be literally everyone you've ever met), and how many of them are FX speculators? Now compare that to crypto, where the entire marketing apparatus is built not upon its current value proposition but instead the idea that value will go up. Why would I spend my time digging up data to quantify things are incredibly obvious from observation, when you're willing to lie and make up facts to support your narrative?

EscapeFromNY 3y ago

> Because there is certainly plenty of speculation outside of those entities. Sure. And there's plenty of non-speculative activity outside of those entities as well. The paper explicitly looks at on-chain activity only. > Because those metrics are terrible proxies for "global financial activity" or "speculation" Maybe so. I put forward my sources, but there could be a better way of calculating it. My broader point was that speculation is the majority of activity, and I doubt that's any different whether you're talking about fiat, gold, oil, crypto, or any other widely used asset/asset class. If you had to calculate that same statistic, what methodology would you use? > You should also understand that all forex activity is not speculation. I would think that global trade would fall under the bucket of "economically meaningful activity", no? In one sense it is meaningful, in another sense it's just a middleman market maker taking their cut, due to the inefficiency of humans having multiple currencies. Either way I don't see how the meaningfulness of trade changes once you introduce crypto. Say I'm subscribed to a Australian musician's patreon. I send her USD, then a middleman sells that USD and gives her AUD. I also support a French musician. I send him BTC. He (or a middleman) sells that BTC for EUR. How can you say either of those situations is more or less economically meaningful?

greatwave1 3y ago
> the data is in the paper I linked. 75% of bitcoin volume is speculation. > Sure. And there's plenty of non-speculative activity outside of those entities as well. The paper explicitly looks at on-chain activity only. You claimed that 75% of bitcoin volume was speculation. There is nothing in the paper to support this claim. I'm not arguing that there is 0 non-speculative activity, I'm saying that it is significantly less than 25%, and you're making up bogus statistics that aren't supported by your sources in the way that you say they are. > Say I'm subscribed to a Australian musician's patreon. I send her USD, then a middleman sells that USD and gives her AUD. I also support a French musician. I send him BTC. He (or a middleman) sells that BTC for EUR. How can you say either of those situations is more or less economically meaningful? Yes, these are both economically meaningful. This type of transaction is much more common in the fiat world than it is in the crypto world (where speculation and wash trading drive the majority of transactions). Currency speculators make up a tiny portion of the real-world economy, while they make up the vast majority of the crypto economy.
- EscapeFromNY 3y ago
  > There is nothing in the paper to support this claim The paper literally says, "75% of the real bitcoin volume has been linked to exchanges or exchange-like entities" You may think the source isn't perfect, but at least I'm bringing some objective data to the conversation. If you disagree, please show me some data of your own instead of just repeating your preconceived bias (which I'm aware of already) I repeat: If you had to calculate that same statistic, what methodology would you use? > This type of transaction is much more common in the fiat world than it is in the crypto world Source? > where speculation and wash trading drive the majority of transactions Source? > Currency speculators make up a tiny portion of the real-world economy Source? > while they make up the vast majority of the crypto economy. Source? Those were some mighty bold claims.
  - greatwave1 3y ago
    > The paper literally says, "75% of the real bitcoin volume has been linked to exchanges or exchange-like entities" Which is an entirely different metric than the % of bitcoin volume that's speculation. If I link a paper that says "1% of squirrels are albino", and I claim that it says that 1% of bitcoin trading is speculative, then I'm not "bringing objective data to the conversation"... I'm just lying My original comment was What do you think the ratio of speculation and illegal activity to legitimate use cases is? I'd be willing to be it's greater than 10:1, maybe even 100:1 You responded by lying and trying to shut down any actual data-driven discussion > You don't have to bet, the data is in the paper I linked. 75% of bitcoin volume is speculation. And then you have the audacity to ask for a source on the claim that "currency speculators make up a tiny portion of the real-world economy"? How many people do you know who are participants in the real world economy (should be literally everyone you've ever met), and how many of them are FX speculators? Now compare that to crypto, where the entire marketing apparatus is built not upon its current value proposition but instead the idea that value will go up. Why would I spend my time digging up data to quantify things are incredibly obvious from observation, when you're willing to lie and make up facts to support your narrative?