S&P Dow Jones Indices to launch cryptocurrency indexes in 2021 • Hacker News Board

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#51

Post by misnamed » Thu, Dec 03, 2020, 4:36 PM UTC

PretzelPirate wrote: post #38

iamspoilt wrote: post #30

Someone please explain this to me: How is any cryptocurrency even considered an investment vehicle? I would classify myself as Boglehead and I believe in the fundamentals of investing in stocks because in all it's technicality (and given the buy-and-hold strategy), you are investing in a business by owning a part of it which naturally means that you will and do get the returns on it, both in terms of profits (dividen…

I think part of the confusion is the word “currency”, which implies it’s something like USD. Ethereum’s ETH token, for example, is an asset that will appreciate if demand of the Ethereum network increases for real-world business applications (not just financial payments). That makes it much more like investing in a limited resource (ex: oil) that will go up in value. It’s still speculating, but most stock investments…

Stocks are shares in profitable companies. They have risks, sure, but they also have expected returns based on sound fundamentals and a long history of generating income.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#52

Post by cgriswald » Thu, Dec 03, 2020, 4:37 PM UTC

bluedevil2k wrote: post #25

SilasX wrote: post #14

Earlier quoted context omitted.

Why do they need a justification? English is under no obligation to imitate Latin plurals, and it adds no functional benefit. Edit: interestingly, the title of the article uses the English, while the body uses the Latin (although in one case that’s because it’s from a name). Edit2: Relatedly, I had a "shower thought" that even the most pedantic Latinophiles say "albums" instead of "alba". Although I also know a Latin…

I agree, it’s time we stop pushing words like “cacti” and just accept the inevitable English-ication of words and say “cactuses”. This is a tangent to the article, but along these lines people love correcting “octopuses” as “octopi”, but “octopus” isn’t a Latin word, it’s Greek, so the “-i” ending isn’t correct.

I think it’s fine to say or write -es or -I in general usage. I think it’s also fine to prefer one or the other in contextual usage. And I think it’s fair to roll ones eyes at people making a big deal of it.

But it’s incorrect to say octopus is not a Latin word. That’s like saying utensil isn’t a French word. It is, and it came to English from Latin through French. Octopus came to English through Latin from Greek. It’s a Latin word and it’s a Greek word.

So, I don’t think it’s a consistent position to be okay with the Englishification of Latin words, but not be okay at the Latinization of Greek ones!

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#53

Post by Infinitesimus » Thu, Dec 03, 2020, 4:38 PM UTC

baron_harkonnen wrote: post #43

iamspoilt wrote: post #30

Someone please explain this to me: How is any cryptocurrency even considered an investment vehicle? I would classify myself as Boglehead and I believe in the fundamentals of investing in stocks because in all it's technicality (and given the buy-and-hold strategy), you are investing in a business by owning a part of it which naturally means that you will and do get the returns on it, both in terms of profits (dividen…

I recommend you read some of Stephen Deihl's thoughts on the subject[0]. You're not alone if you feel that cryptocurrency doesn't make sense as an investment vehicle, but the HN community will make you feel crazy for not seeing what a great thinking this is an incredible new opportunity and "things are different this time!" There is no better indication of a bubble then people telling you that you're the crazy one fo…

> There is no better indication of a bubble then people telling you that you're the crazy one for questioning it. I remember people telling me I was crazy for not buying a house in 2007, and crazy for not trading tech stocks in 1999.

I'm not sure that's a good indicator with so many counter examples: the internet, large touch screen phones, Cloud in the earlier days, etc.

We truly have no idea what the future if Cryptocurrencies are.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#54

Post by tekkk » Thu, Dec 03, 2020, 4:38 PM UTC

iamspoilt wrote: post #30

Someone please explain this to me: How is any cryptocurrency even considered an investment vehicle? I would classify myself as Boglehead and I believe in the fundamentals of investing in stocks because in all it's technicality (and given the buy-and-hold strategy), you are investing in a business by owning a part of it which naturally means that you will and do get the returns on it, both in terms of profits (dividen…

I neither can understand why it is considered as investment but I guess scarcity and how it can be exchanged anonymously and cheaply for large sums makes it lucrative. Especially if you want to avoid governments for some reason.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#55

Post by iamspoilt » Thu, Dec 03, 2020, 4:39 PM UTC

misnamed wrote: post #51

PretzelPirate wrote: post #38

Earlier quoted context omitted.

I think part of the confusion is the word “currency”, which implies it’s something like USD. Ethereum’s ETH token, for example, is an asset that will appreciate if demand of the Ethereum network increases for real-world business applications (not just financial payments). That makes it much more like investing in a limited resource (ex: oil) that will go up in value. It’s still speculating, but most stock investments…

Stocks are shares in profitable companies. They have risks, sure, but they also have expected returns based on sound fundamentals and a long history of generating income.

Exactly my point. They add certain value to the economy and have fundamentals. From my understanding, I don't even consider Gold (a limited resource) a long-term investment.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#56

Post by misnamed » Thu, Dec 03, 2020, 4:39 PM UTC

jamesmehaffey wrote: post #45

iamspoilt wrote: post #30

Someone please explain this to me: How is any cryptocurrency even considered an investment vehicle? I would classify myself as Boglehead and I believe in the fundamentals of investing in stocks because in all it's technicality (and given the buy-and-hold strategy), you are investing in a business by owning a part of it which naturally means that you will and do get the returns on it, both in terms of profits (dividen…

If you are using blockchain tokens to run an application, then you are essentially paying A large network of computer operators for their combined processing capacity. This means their electricity, maintenance cost, etc. instead of investing in servers that will be old by the end of the year. So purchasing cryptocurrency is in fact a very real investment. Think of it like an airline purchasing jet fuel three months a…

A great investment if the cost of fuel goes up, but a bad one of if it goes down. Processing power is getting cheaper and cheaper.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#57

Post by ozorOzora » Thu, Dec 03, 2020, 4:39 PM UTC

baron_harkonnen wrote: post #43

iamspoilt wrote: post #30

Someone please explain this to me: How is any cryptocurrency even considered an investment vehicle? I would classify myself as Boglehead and I believe in the fundamentals of investing in stocks because in all it's technicality (and given the buy-and-hold strategy), you are investing in a business by owning a part of it which naturally means that you will and do get the returns on it, both in terms of profits (dividen…

I recommend you read some of Stephen Deihl's thoughts on the subject[0]. You're not alone if you feel that cryptocurrency doesn't make sense as an investment vehicle, but the HN community will make you feel crazy for not seeing what a great thinking this is an incredible new opportunity and "things are different this time!" There is no better indication of a bubble then people telling you that you're the crazy one fo…

"The Politics of Bitcoin: Software as Right-Wing Extremism"... just wow. Is it crazy to consider that crypto companies might simply provide better tools than a lot of banks, therefore driving worldwide adoption?

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#58

Post by aboodman » Thu, Dec 03, 2020, 4:40 PM UTC

iamspoilt wrote: post #37

vocatus_gate wrote: post #33

Earlier quoted context omitted.

I'll try to use my elevator pitch: With cryptocurrency, you're right they're not an "investment" in the traditional sense. Right now more of a long-term gamble. In my opinion the value is in the network and the ability to move money instantly (or at very least faster than traditional methods), securely, to anywhere in the world for a fraction of a cent. That ability alone is valuable and hasn't existed until now. The…

Okey, calling it a "long-term gamble" only sounds fair to me. Talking about value, isn't blockchain / crypto analogous to a medium that enables moving money quickly? If yes, internet would be similar in some sense (we have instant local money transfers these days) but we don't have anything that tracks internet as an investment. Coming back to it, I can rationalize myself investing in a money transfer business that i…

Any cryptocurrency can be used to move money quickly. So if you buy a cryptocurrency, you are automatically "investing" in that "business". You don't need Transferwise.

Bitcoin is the canonical example. The value investment argument for Bitcoin is that you think Bitcoin is (or will become) a good way to move money. You're buying a scarce piece of that utility.

===

Some cryptocurrencies additionally have other utilities. Example, ethereum can be used to write very slow, shitty software that runs on the blockchain. So far nobody has come up with a super amazing use case for this, but theoretically, if somebody did this would dramatically increase the demand for ethereum tokens - (b) above.

A better example would be something like https://handshake.org/ - a cryptocurrency that is trying to power a decentralized replacement for dns. Remains to be seen whether this can be done and will have adoption. These systems have all the problems of traditional startups, plus all the problems of low level protocol development, plus standardization problems, plus novel math.

However, I hope it's easy to see the value investment argument for something like handshake: dns is valuable, dns has problems, handshake is trying to solve those problems, by buying hns tokens I'm buying a part of this network, and if they succeed demand for those tokens goes up.

Hope this helps.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#59

Post by vesinisa » Thu, Dec 03, 2020, 4:42 PM UTC

Infinitesimus wrote: post #53

baron_harkonnen wrote: post #43

Earlier quoted context omitted.

I recommend you read some of Stephen Deihl's thoughts on the subject[0]. You're not alone if you feel that cryptocurrency doesn't make sense as an investment vehicle, but the HN community will make you feel crazy for not seeing what a great thinking this is an incredible new opportunity and "things are different this time!" There is no better indication of a bubble then people telling you that you're the crazy one fo…

> There is no better indication of a bubble then people telling you that you're the crazy one for questioning it. I remember people telling me I was crazy for not buying a house in 2007, and crazy for not trading tech stocks in 1999. I'm not sure that's a good indicator with so many counter examples: the internet, large touch screen phones, Cloud in the earlier days, etc. We truly have no idea what the future if Cryp…

> We truly have no idea what the future of X is

What an excellent reason not to invest in X!

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#60

Post by misnamed » Thu, Dec 03, 2020, 4:42 PM UTC

iamspoilt wrote: post #30

Someone please explain this to me: How is any cryptocurrency even considered an investment vehicle? I would classify myself as Boglehead and I believe in the fundamentals of investing in stocks because in all it's technicality (and given the buy-and-hold strategy), you are investing in a business by owning a part of it which naturally means that you will and do get the returns on it, both in terms of profits (dividen…

Even if you accepted it as a diversifier, all cryptos combined still have a relatively small market cap, so I don't really see the point in adding them to a stock/fixed-income portfolio. It's a bit like frontier markets: sure, they're possible to invest in, but expensive, small and won't make a big difference at market weights.