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Show HN: The Coinbase FOMO Calculator

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Re: Show HN: The Coinbase FOMO Calculator

#41

Post by GeneralMayhem »

nightski wrote: post #35
vages wrote: post #12

Earlier quoted context omitted.

When I had crypto assets, I came upon this article about “Greater fool theory” https://en.wikipedia.org/wiki/Greater_fool_theory It made me sell all my crypto (luckily at a profit), and I have not looked back.

So you basically don't invest in anything because that theory can be applied to any asset.

Most assets are, at least in theory, backed by something that can turn a true profit in an efficient market. Anything that's based on capital-intensive resource extraction can pay a dividend on the profit from that capital. Anything that's based on real estate will go up in price as population increases. Anything that's manufactured or based on IP can pay a dividend based on the value delta between inputs and outputs.

In general, anything that turns a raw material of some sort into a more refined product (be it iron ore into steel, steel into machines, or electrons into advertisements) is adding economic value into the system. By doing that work, the total net wealth of humanity increases. The economy is positive-sum, and so investing in anything that's correlated with the economy as a whole should be worthwhile.

Bitcoin doesn't work that way. Trading Bitcoin isn't adding to the total net worth of humanity. Mining Bitcoin arguably could be, because the ability to make transactions has some value, but the practical value of those transactions is less than the value of the electricity, computer hardware, and pollution that go into making them. Speculating on Bitcoin does nothing productive; it's zero sum. Net-zero systems are nearly indistinguishable from gambling unless you have insider information.

Re: Show HN: The Coinbase FOMO Calculator

#42

Post by BurningPenguin »

Jistern wrote: post #17
aaronwalker wrote: post #6

Ive heard conflicting viewpoints on the current crypto crash. Some say that this is different than the rest, and that crypto has already reached it’s all time max, whereas others say that this is just another pullback before an even larger bull run. With crypto, it is so hard to know what it’s actual value should be, since unlike a stock there are no earnings and thus you can’t look at the P/E ratio to determine its…

As I learned from a quotation which is attributed to Mark Cuban, so-called “cyptocurrencies” are collectibles like baseball cards, rare postage stamps, and French impressionist paintings. Fundamentally they're all fads. None of them have any significant inherent value. Typically two types of people purchase them: either avid collectors or speculators. Don't gamble. It's not a productive use of your time. It's also a…

I think you're confusing a Crypto with NFTs. One is virtual money, the other is virtual certificates.

Re: Show HN: The Coinbase FOMO Calculator

#43

Post by [deleted] »

barnbuilder wrote: post #39
vages wrote: post #12

Earlier quoted context omitted.

When I had crypto assets, I came upon this article about “Greater fool theory” https://en.wikipedia.org/wiki/Greater_fool_theory It made me sell all my crypto (luckily at a profit), and I have not looked back.

What is the difference between something explained by the "Greater Fool Theory", and any of the numerous things that simply increase in value over time due to increased demand and/or rising scarcity? It seems to me the only difference is whether the speaker is predisposed to not like the thing in question.

[deleted]

Re: Show HN: The Coinbase FOMO Calculator

#44

Post by kareemsabri »

nightski wrote: post #35
vages wrote: post #12

Earlier quoted context omitted.

When I had crypto assets, I came upon this article about “Greater fool theory” https://en.wikipedia.org/wiki/Greater_fool_theory It made me sell all my crypto (luckily at a profit), and I have not looked back.

So you basically don't invest in anything because that theory can be applied to any asset.

Like a house?

Re: Show HN: The Coinbase FOMO Calculator

#45

Post by tinco »

rplnt wrote: post #23
fishtoaster wrote: post #11

A good counter to "I could have made $X bazillion if I'd gotten into Y thing at Z time" is to remember that you could have doubled your money at the horse track yesterday by betting on the right horse at the right time. So the only question is: what's different between Y thing and horse betting? Did you have enough information at Z time to know you should have invested? Or are you just wishing you could have predicte…

With BTC especially, my argument (to myself) is that if I weren't lazy and got BTC at $20 I would have definitely sold at $100.

I did that, and then rebought at 130 and sold again at 175, and so on until I only had a couple and then MtGox happened and I lost 80% of that and lost interest for a couple years. It's definitely possible to get in early and not become rich at all.

Re: Show HN: The Coinbase FOMO Calculator

#46

Post by mgraczyk »

fishtoaster wrote: post #11

A good counter to "I could have made $X bazillion if I'd gotten into Y thing at Z time" is to remember that you could have doubled your money at the horse track yesterday by betting on the right horse at the right time. So the only question is: what's different between Y thing and horse betting? Did you have enough information at Z time to know you should have invested? Or are you just wishing you could have predicte…

The difference is that I founded and raised millions of VC $$ in the crypto space, and watched some of my friends make tens or hundreds of millions, and yet I made very little from crypto. I didn't build a protocol or anything with a token. The whole time I felt like I could have just built some pie-in-the-sky "crypto for ML" thing and done a huge token sale.

Re: Show HN: The Coinbase FOMO Calculator

#47

Post by [deleted] »

BurningPenguin wrote: post #42
Jistern wrote: post #17

Earlier quoted context omitted.

As I learned from a quotation which is attributed to Mark Cuban, so-called “cyptocurrencies” are collectibles like baseball cards, rare postage stamps, and French impressionist paintings. Fundamentally they're all fads. None of them have any significant inherent value. Typically two types of people purchase them: either avid collectors or speculators. Don't gamble. It's not a productive use of your time. It's also a…

I think you're confusing a Crypto with NFTs. One is virtual money, the other is virtual certificates.

[deleted]

Re: Show HN: The Coinbase FOMO Calculator

#48

Post by [deleted] »

GeneralMayhem wrote: post #41
nightski wrote: post #35

Earlier quoted context omitted.

So you basically don't invest in anything because that theory can be applied to any asset.

Most assets are, at least in theory, backed by something that can turn a true profit in an efficient market. Anything that's based on capital-intensive resource extraction can pay a dividend on the profit from that capital. Anything that's based on real estate will go up in price as population increases. Anything that's manufactured or based on IP can pay a dividend based on the value delta between inputs and outputs…

[deleted]

Re: Show HN: The Coinbase FOMO Calculator

#49

Post by jpgvm »

barnbuilder wrote: post #39
vages wrote: post #12

Earlier quoted context omitted.

When I had crypto assets, I came upon this article about “Greater fool theory” https://en.wikipedia.org/wiki/Greater_fool_theory It made me sell all my crypto (luckily at a profit), and I have not looked back.

What is the difference between something explained by the "Greater Fool Theory", and any of the numerous things that simply increase in value over time due to increased demand and/or rising scarcity? It seems to me the only difference is whether the speaker is predisposed to not like the thing in question.

To qualify for greater fool something must a) overvalued vs its utility and b) purchased on the sole assumption that it can later be resold at a higher value.

This leaves you with a surprisingly small amount of assets. Collectibles probably.

I think the epitome of greater fool is probably NFTs. Unlike a real piece of art you don't actually own anything unless additional value is conferred to you by owning it from the issuing entity, like say legal copyright over the referenced piece in question (if its art).

Re: Show HN: The Coinbase FOMO Calculator

#50

Post by roenxi »

ramraj07 wrote: post #22
fishtoaster wrote: post #11

A good counter to "I could have made $X bazillion if I'd gotten into Y thing at Z time" is to remember that you could have doubled your money at the horse track yesterday by betting on the right horse at the right time. So the only question is: what's different between Y thing and horse betting? Did you have enough information at Z time to know you should have invested? Or are you just wishing you could have predicte…

The issue is that many of us WeRE present and actively monitoring crypto. Heck I even tried to mine bitcoin back when you had a chance to mine one in your own gpu. I even thought maybe I’ll buy a coin or two; it’s only 20 bucks each! But “better judgement” said that it’s a currency it shouldn’t appreciate so why bother unless you want to actually use it? So if there’s regret it’s because many of us feel almost penali…

You have to be ruthless towards your own intuitions when investment. Human nature is absolutely geared towards buying high and selling low, and it isn't the first impression that gets you but the slow pressure in situations where social proof says you were wrong (although social proof proves nothing about money).

Just because someone was actively monitoring crypto & then missed out as the price went from $1 to $10,000 still doesn't mean they have misjudged. Even if crypto is the future - and I've become convinced that it is for privacy reasons - there was still scant evidence of that during Bitcoin's rise. There have been no great arguments circulating to explain why someone should buy in and a lot of the people who made money look like they just got lucky.

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