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Ask HN: Why crypto is rising so fast when its not creating value?

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Re: Ask HN: Why crypto is rising so fast when its not creating value?

#131

Post by wnkrshm »

mohanmcgeek wrote: post #80
jazzyjackson wrote: post #37

Highly recommend episode #231 of Lex Fridman talking to Alex Gladstein - it's a long but interesting discussion on human rights, democracy, totalitarianism, and how money fits into the picture. Alex describes BTC as a trojan horse, a "number go up" technology that attracts buyers by being the best performing asset (certainly a tautology, it keeps performing well because it's been performing well) - once it becomes th…

> people value money that is not controlled by their government. And that's how banknotes came into being Reserve banks are banks, not their respective countries governments

That's not how a quick read of the wikipedia page on the history of bank notes reads. It reads like bank notes were the result of the shortcomings of coins, i.e. that you had to have actual precious metal to mint them. And the first bank notes as currency were used within the national governments' jurisdictions and juristically established as currency. [0]

[0] https://en.wikipedia.org/wiki/Banknote#History

Re: Ask HN: Why crypto is rising so fast when its not creating value?

#132

Post by supermatt »

thoughtstheseus wrote: post #116
supermatt wrote: post #107

Earlier quoted context omitted.

Nope. Stock represents the fractional ownership of a company, and its price represents the perceived value thereof. By all means use it as whatever indicator you like, but lets stick to the facts.

Cool, tell that to Alan Greenspan. I wonder where that perceived value comes from?

> Cool, tell that to Alan Greenspan.

Your word salad is your own, not Greenspans.

> I wonder where that perceived value comes from?

I believe that is the holy grail of investment. There are many different models that try to approximate it.

Re: Ask HN: Why crypto is rising so fast when its not creating value?

#133

Post by Ekaros »

aliswe wrote: post #120
rhizome wrote: post #30

Because it's a pyramid scheme that is powered by hype. It just so happens that the exponential requirements for the number of participants has grown to the point where you'll start to see ppl talking about it more and more and in everyday conversations.

are you sure the word pyramid scheme is actually accurate?

Probably not, just like it isn't ponzi. Bubble and mania are entirely reasonable terms though. Considering how much value comes from utility and how much from speculation and wish to make easy money... Seeing some tokens popping up going up in value and then coming down. While seemingly not providing anything real yet.

Not that there isn't small cases for remittance and illegal things.

Re: Ask HN: Why crypto is rising so fast when its not creating value?

#134

Post by civilized »

StanislavPetrov wrote: post #123
civilized wrote: post #40

Earlier quoted context omitted.

> Cryptocurrency is backed by the same thing as any other currency: popularity and consumer confidence. I don't think currency is just a confidence game. The most important thing is that the currency is actually used to make transactions that are meaningful to human life. A currency that isn't used to exchange goods is just a collectible. There is no such thing as an abstract "store of value" that has no actual utili…

>The most important thing is that the currency is actually used to make transactions that are meaningful to human life. Millions of people use cryptocurrency on a daily basis to make transactions that are not only meaningful, but absolutely critical to human life. Here in New York I personally know more than a dozen people who regularly send cryptocurrency to their families in other countries. It is cheaper, easier a…

> It is cheaper, easier and faster than using banks and legacy money transfer vehicles like Moneygram or Western Union and it has the added bonus of not being saddled with the red tape or regulatory requirements that go along with these institutions.

This situation feels unsustainable. Traditional institutions don't ask questions because they love getting into your business, they ask because of AML and KYC regulations. If crypto eats the lunch of these traditional institutions because it doesn't have to follow the rules they do, things are going to come to a head sooner or later.

Re: Ask HN: Why crypto is rising so fast when its not creating value?

#135

Post by thoughtstheseus »

supermatt wrote: post #132
thoughtstheseus wrote: post #116

Earlier quoted context omitted.

Cool, tell that to Alan Greenspan. I wonder where that perceived value comes from?

> Cool, tell that to Alan Greenspan. Your word salad is your own, not Greenspans. > I wonder where that perceived value comes from? I believe that is the holy grail of investment. There are many different models that try to approximate it.

No worries, if you have a question on something just ask. Greenspan popularized the view that excess capital flowing into stocks can be viewed as a form of inflation. There are limits (not strict) on short-term consumption so excess capital needs to go somewhere. Some of it goes into stocks until used for future consumption.

Re: Ask HN: Why crypto is rising so fast when its not creating value?

#136

Post by supermatt »

thoughtstheseus wrote: post #135
supermatt wrote: post #132

Earlier quoted context omitted.

> Cool, tell that to Alan Greenspan. Your word salad is your own, not Greenspans. > I wonder where that perceived value comes from? I believe that is the holy grail of investment. There are many different models that try to approximate it.

No worries, if you have a question on something just ask. Greenspan popularized the view that excess capital flowing into stocks can be viewed as a form of inflation. There are limits (not strict) on short-term consumption so excess capital needs to go somewhere. Some of it goes into stocks until used for future consumption.

You are misrepresenting whatever it is you think he has said.

Greenspan has never said that "excess capital flowing into stocks can be viewed as a form of inflation".

Higher price of stock being a potential indicator of inflation (due to the wealth effect, etc) is very different to it "being a form of inflation".

Anyway, I don't care to continue this discussion as is. Please feel free to post references backing your redefinition of economic terms if you wish to proceed.

Re: Ask HN: Why crypto is rising so fast when its not creating value?

#138

Post by thoughtstheseus »

supermatt wrote: post #136
thoughtstheseus wrote: post #135

Earlier quoted context omitted.

No worries, if you have a question on something just ask. Greenspan popularized the view that excess capital flowing into stocks can be viewed as a form of inflation. There are limits (not strict) on short-term consumption so excess capital needs to go somewhere. Some of it goes into stocks until used for future consumption.

You are misrepresenting whatever it is you think he has said. Greenspan has never said that "excess capital flowing into stocks can be viewed as a form of inflation". Higher price of stock being a potential indicator of inflation (due to the wealth effect, etc) is very different to it "being a form of inflation". Anyway, I don't care to continue this discussion as is. Please feel free to post references backing your…

Please don't post shallow dismissals. A good critical comment teaches us something.

Re: Ask HN: Why crypto is rising so fast when its not creating value?

#140

Post by rapjr9 »

abetusk wrote: post #65

Hacker News (HN) is actively hostile to the idea of cryptocurrency. I doubt you'll get a measured opinion, one way or the other. Stacker News (SN) is a place that is at least attempting to have these conversations, though they swing the other way and are actively pro-cryptocurrency, even if the main focus is on Bitcoin and Lightning [0]. --- Let me try to actually answer your question. * Cryptocurrency is creating va…

Another set of reasons that it is rising is because governments, central banks, banks, and Mastercard are taking it seriously and are developing plans and rules for cryptocurrencies. They see a benefit in lowered costs for big transactions (think clearing houses), tracking where money goes (whether you think that is good or bad, China sees it as good), automation of money and contracts, and more. I suspect some of the banks are interested in anonymous derivatives, shadow banking, and off the books transactions. These are all very clear motivations for using crypto on a large scale. The news of this is driving crypto up since once these big players get involved the value of some cryptocurrencies will likely skyrocket, though some will also tank as new regulations take effect.
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