Ask HN: Is anyone else glad the crypto market is crashing?

1. Stock market valuation has a fairly tidy theoretical foundation that is not too much use in practice for prediction. (It is used for IPOs etc. in some form, when a market price hasn't been established yet.) It involves basic algebra, along the lines of sum_t=1^infty D/(1+r)^t = D/r, etc.

Fisher Black (of Black-Scholes fame) memorably wrote: "An efficient market is one in which price is within a factor 2 of value", where price = market price, and value = true value, as determined by that tidy formula assuming you had all the correct inputs, which you don't.

2. Similar for FX and Rates, though there is a bit more to it.

3. In derivatives, you have much more sophisticated maths (stochastic processes, Ito calculus, PDEs, Monte Carlo). Its focus is not so much prediction of the future, but a) deducing the true current state of the market from observable prices, and then b) from that true state deduce the price of derivative products, and c) computing risks (partial derivatives), which then lets you d) synthesise these derivative products. But that's not very relevant here.

4. Trying to predict the market is a whole other ballgame. You can work with time series analysis, regression and more sophisticated statistical methods and ML, and use any number of inputs: price history, company fundamentals, macro fundamentals, text/sentiment analysis, order book (market micro structure), etc.

Funny thing about this business is that there's a lot written about it, but those that have figured it out use it to make money, and don't write about it.

5. Now, cryptography involves real maths, but entirely different again, mostly number theory (such as n^p = n (mod p), for p prime).

GP might have been complaining that many vociferous crypto bros lack the basics to understand the mathematical foundations of cryptography. Though, I must say, I think one can understand e.g. hash functions and asymmetric encryption etc. quite well from their functionality alone, without needing to understand the math behind it (just as you don't need to understand transistors to understand what a NAND gate does).

You mean "a large enough contingent of shareholders", right?

What do you all think?

If it's not your bag, don't put your time into it.

/2cents

There's the gold standard. There are an estimated 250,000 tons of gold in the world, with estimated reserves of 60,000 tons. (https://www.usgs.gov/faqs/how-much-gold-has-been-found-world) Unfortunately, quite a lot of that is tied up in things like jewelry which is fixable, I suppose. And world gold production (https://www.statista.com/statistics/238414/global-gold-produ...) has roughly matched gross world product growth (https://en.wikipedia.org/wiki/Gross_world_product#Recent_gro...) over the last few years. On the other hand, when gold production starts going to zero while economic activity continues to grow, you get deflation and financial collapse, so, yeah.

There's a silver standard and multi-metallic standards, and I'm really hoping there's a hilarious story behind this sentence from wikipedia: "Great Britain accidentally adopted a de facto gold standard in 1717 when Sir Isaac Newton, then-master of the Royal Mint, set the exchange rate of silver to gold too low, thus causing silver coins to go out of circulation." (https://en.wikipedia.org/wiki/Gold_standard) (Apparently, the US's introduction to the gold standard was also accidental, caused by the 1849 California gold rush.) Unfortunately, those systems didn't prevent a crash about every decade. (https://en.wikipedia.org/wiki/Financial_crisis#19th_century)

Or you could let things float, like exactly nobody else does. I'm sure that won't be rife with corruption, bank failures, and its own boom and bust cycles.