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Speculators buying from speculators and hoping today isn't the day the hot potato explodes.
by TkTech 2y ago
Speculators buying from speculators and hoping today isn't the day the hot potato explodes.
- wyager 2y agoHow long do you think it will take you to update your priors on this?
- MuffinFlavored 2y agoHow long has this been the case for gold roughly? Since the 1970s?
- kerbs 2y agoGold is used to make things. You can argue what its value should be as a material alone, but it’s not entirely speculation.
- exe34 2y agocan you make useful things with abstract art? They're not even good as toilet paper and yet people still buy and trade them.
- hparadiz 2y agoCrypto can be used as a store of wealth when crossing borders preventing search and seizure of your wealth against overzealous governments. See Russia in the early 90s which would regularly search and confiscate cash from people leaving. That alone makes it very valuable.
- Larrikin 2y agoWhat's the scenario where the government can take the digital money from your bank accounts but can't take the digital money from your crypto wallet?
- DennisP 2y agoAny scenario where you're sufficiently careful with your private keys.
- rounce 2y agoWhat happens when they bust out the $5 wrench?
- fallingsquirrel 2y agoThey would need 300 million wrenches, one for each citizen. That leaves society in a much better position than letting them do it at scale with an sql query.
- rounce 2y agoAre wrenches single-use, or are you allocating individual attackers per-citizen? In the case of a successful wrench attacker, how are the stolen funds recovered?
- fallingsquirrel 2y agoThis is the classic time-money tradeoff. Theoretically you only need one wrench and one attacker—but even if she attacks 100 people a day it would take thousands of years to reach everyone. And word of the attacks would spread, so later victims would take steps to safeguard their money and the attacks would become ineffective. To be maximally effective you'd need to mobilize enough attackers and enough windowless white vans to reach the entire populace within probably a day, so let's say 3 million attackers and 3 million white vans. That's when things start getting more expensive than the sql query.
- tmottabr 2y agothat is assuming every citizen has a crypto wallet, something is not even close to be true.. i would guess that percentage of people with wallets would be very small and a relative small team could with a relative small number of white vans and wrenches could get every single one in relative short time.. and for countries that heavily monitor internet usage, like china, i bet they could have a list with pretty good assumptions on who has crypto that they can target for further investigation before sending the wrenched goons..
- kerbs 2y agoYou made a subtle, but important, pivot from the topic of “Bitcoin” to the broader topic of “crypto”. Bitcoin specifically, with its multi-trillion dollar market cap, is built up that high purely on speculation. It is a very fragile store of wealth, especially the higher its market cap becomes.
- superfist 2y agoand how much of gold price is in your opinion value of material itself? Strip out that material price and you have speculation price. Price of Bitcoin is mostly that speculation price + instead of material some mathematical properties.
- lottin 2y ago> Price of Bitcoin is mostly that speculation price + instead of material some mathematical properties. Mathematical properties don't provide economic value. The demand for bitcoin is almost all speculation, and a tiny bit is for purposes of making clandestine payments, paying ransoms, and such.
- superfist 2y agoSo, access to a permissionless SWIFT-like system from anywhere around the world has no economic value in your opinion? Go and ask people in African countries what it means to them.
- lottin 2y agoI said _mathematical properties_ have no economic value.
- superfist 2y agoMost paper money intrinsically has no value at all, even the paper it is printed on can't be used as toilet paper due to its lack of softness. It is only a medium of labor exchange. For me, Bitcoin is exactly the same, but in a very new form, backed by math instead of a government.
- lottin 2y agoYou're quite right that neither fiat money nor bitcoin have intrinsic value, though they both have exchange value (i.e. market value). This means there must be a demand that prevents the market value from falling to zero. In the case of fiat currency, the public demands fiat currency for transaction purposes and to pay taxes. In the case of bitcoin, the demand for transaction purposes is anecdotal, almost nonexistent. So the demand for bitcoin is almost entirely speculative. (There's no other possibility as far as I know, given no intrinsic value.) In other words, people demand bitcoin because they expect that the price of bitcoin will go up. Such a demand can be sustained as long as people continue to have the same expectations. When (or if) these expectations change, the demand can evaporate quite quickly, and the price will collapse dramatically as a result. So bitcoin is not backed by math. It's backed by a speculative demand.
- chairmansteve 2y agoBTC is used for trade. You know, drugs etc. And money laundering. Sanctions busting. Tax avoidance. It has a lot of utility...
- lesuorac 2y agoBTC is pretty bad for illegal activity since the transactions are public. You'd be much better off using the US Dollar. Even if it's through a bank like HSBC.
- kerbs 2y agoIt is used for those things I agree. Those things alone do not hold up a $1.5T market cap. I would say they don’t hold up a $1.5B cap either.
- ASalazarMX 2y agoLet's revisit this again when we can melt bitcoins and sell them. Gold is a finite resource that has to be extracted and processed, ecoins are made out of thin air (mining them is a superficial analogy) and speculation.
- laurentiurad 2y agono, but I am using my index fund on s&p 500 to buy goods and services
- Retric 2y agoDividends provide a real income stream people live off of, bitcoins need buyers. It’s the difference between owning a farm and a gold bar.
- mrighele 2y agoThere are plenty of companies whose stock is sought after but that never paid dividends (I think Tesla and Amazon are some example, or used to be at least)
- onlyrealcuzzo 2y agoThey return cash to shareholders in the form of buybacks.
- deleted 2y ago[deleted]
- Retric 2y agoNever have isn’t never will, dividends and buybacks are a sign the company doesn’t have use for the money. Meta and Google both eventually started paying dividends because they’re essentially tapped out of internal investment ideas. Telsa and Amazon on the other hand believe they have something meaningful to do with the money. But eventually successful companies just don’t have anything useful to do with their giant piles of cash.
- tfehring 2y agoIt’s not really about dividends. If you buy a share of Amazon stock, you’re getting a cut of the value that a million+ people are producing every day by writing code or moving stuff around. The value most workers create for their employers’ shareholders is much bigger than their rent check, and capturing that value is even easier than being a landlord. Dividends are just moving money from one pocket to the other, the value created by people’s work is where the returns come from. Financial returns without value creation are an anomaly, though not necessarily a rare or short-lived one.
- tim333 2y agoThe hot potato has gone 5000+ days without exploding and seems fairly non explosive.
- 4gotunameagain 2y agoMore than 70% drop in less than a year is not an explosion ?
- disqard 2y agoThe hot potato can remain non-explosive longer than you can remain armored.