Facebook messenger doesn't let me share that url to friends. What the hell.
Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies
171–180 of 317 posts
Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies
#172Earlier quoted context omitted.
No, smart contracts can't make money show up from 'thin air' aka outside the system the way dividends do.
First of all, yes they can. Proof of stake coins pay dividends. Second of all, dividends from companies don't show up 'from thin air'. They show up from the economic activity of the company. Which is facilitated by their capital investments. Just like staking in cryptos.
Think about this really carefully. Smart contracts can pay out coins but not money.
If every year your coin splits so now you have 2 coins then 4 etc no money was added. I can have 10^1000 in a database, but that's not new value.
Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies
#173Earlier quoted context omitted.
Several different points and comparisons here. Providing capital to someone does not only occur in the IPO stage. I'm not even sure how to go about refuting that statement; that's... not how finance works anywhere on the planet. People do trade stocks with the expectation of stocks rising or falling in varying periods. People also hold stocks for long terms and then sell them afterwards. Just like cryptocurrencies! H…
First, let's ignore cryptos because I'm talking about IPO's only (albeit the thread is about cryptos) "Providing capital to someone does not only occur in the IPO stage. I'm not even sure how to go about refuting that statement; that's... not how finance works anywhere on the planet." First, I provided that statement in the context of the parent comment. In the equities market, providing capital occurs only in IPOs,…
...What do IPOs have to do with parent argument?
Yes, Apple is not receiving any money if there is a share transaction between two investors (duh?). However, providing capital to public companies or does not only occur in IPOs (edit: even if we restrict that with the clause: in an "equities market").
You're right, I could have provided a counter argument. However, at the same time, you should not make such an absurd, unqualified assertion that other people who lack knowledge and are reading these forums may read and assume to be true.
Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies
#174Earlier quoted context omitted.
Bitcoin can absolutely have a net positive return. People can simply keep buying it and holding it. Do you think gold cannot be an investment?
Gold is a store of value. Buy 1 lb of gold and in 100 years you have 1 lb of gold minus storage fees. However, over a long enough timeframe storage fees eat up the entire value of gold stored thus it's not a long term investment.
So is bitcoin. Except that it doesn't have storage costs. Buy 1 bitcoin today, and you will retain it in perpetuity, in its exact same quantity.
Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies
#175Earlier quoted context omitted.
A better question might be: How is anything an investment? If the stock market is priced efficiently, it is as much a gamble as Bitcoin. The stock market is of course not perfectly efficient, but it is likely extremely efficient relative to the knowledge of your average retail investor. Which means that buying Bitcoin or other cryptos is no more a gamble than any stock market investment with a similar volatility.
What separates investing from gambling is the expected return for everyone is greater than zero. AKA buy stock at 100$ and sell it at 100$ does not mean you broke even. You could have gotten 10$ in dividends. Now that positive may be small and some people may lose money, but that's allowed as long as the expected returns end up positive. Bitcoin's can't have a net positive return because they only way to add money in…
Some cryptocurrencies generate the equivalent of "dividends", especially those based on Proof of Stake systems. For example, holding Neo generates Gas equivalent to a 3-6% annual return[0], and Stellar (given free to HN readers a few years back[1]) has "inflation" equivalent to around 1% annual return[2], to name two that Robinhood will be listing.
Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies
#176Earlier quoted context omitted.
It's a very good app for buying up small (50-500 dollar) blocks of ETFs to hold, which is what I do. Thanks for the free trades, VC guys.
Robinhood makes money on execution (through exchange maker-taker fees [1] and reselling order flow to hedge funds or market makers). It's in their best interest to promote more volume to increase revenue. They're making money of each and every trade. [1] for example https://www.nasdaqtrader.com/Trader.aspx?id=bx_pricing
Ah, I didn't know they made money off that part of it. I suppose you give up some privacy/data when they resell your order, similar to using Facebook or Google. It's a slick business model, I didn't even realize it.
Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies
#177Earlier quoted context omitted.
Bitcoin can absolutely have a net positive return. People can simply keep buying it and holding it. Do you think gold cannot be an investment?
Gold is speculative, stocks are investments. Bitcoin is speculative. https://i.imgur.com/AltAcnB.jpg Keep in mind this graph is logarithmic in scale.
You think stocks are not speculative?
Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies
#178Earlier quoted context omitted.
I don't think so, as gold has no inherent expected return.
The combination of its increasing scarcity and real world use doesn't drive a return?
no. real world use explains why it has value not why this value should increase in expectation relative to general level of inflation.
Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies
#179Something about Robinhood just makes me uneasy - clearly their main target market is the small retail investor who is sensitive to a $7/trade fee, but the low friction, mobile-first no fee stock trading experience they've created mostly serves to encourage bad investor behavior i.e. emotional, irrational day trading among people who can least afford it. Now they are "democratizing" margin trading (Robinhood Gold), op…
I think Robinhood does a great job of giving young traders the experience and knowledge of what actual trading is like before they're managing really meaningful amounts of money. College kids trading $500 on Robinhood are going to become 30 year olds who have a much better sense of how markets work and how emotion affects their own trading than college kids who are just instructed to give all their savings to mutual funds. I think RH has a niche and potential to really change things provided they don't do too much to incentivize dangerous behavior (like the deleted tweet).
Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies
#180Earlier quoted context omitted.
First of all, yes they can. Proof of stake coins pay dividends. Second of all, dividends from companies don't show up 'from thin air'. They show up from the economic activity of the company. Which is facilitated by their capital investments. Just like staking in cryptos.
Think about this really carefully. Smart contracts can pay out coins but not money. If every year your coin splits so now you have 2 coins then 4 etc no money was added. I can have 10^1000 in a database, but that's not new value.
You don't actually know much about cryptos, do you? Here, read this:
https://github.com/ethereum/wiki/wiki/Proof-of-Stake-FAQ
Staking doesn't produce new coins. It pays dividends from transaction fees. I.e. actual economic activity.