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

#271

Post by vmception » Thu, Dec 03, 2020, 7:40 PM UTC

timdaub wrote: post #258

puranjay wrote: post #233

Earlier quoted context omitted.

How else do you figure out whether the devs can actually do what the whitepaper promises? Just go by their word?

I've been navigating the space since 2014. It's not too difficult if you know the tech. Here's some fat tony advice: Good project/founders/devs: - Are tightly connect to other good projects (e.g. check Twitter) - Are shipping features/products continously (and talk about it) - Adjust their vision/roadmap appropriately (crypto changes really quick) - Are value-driven - Try to improve upon difficult but possible engine…

> - Try to improve upon difficult but possible engineering problems (e.g. we build a smart contract for a EUR stable coin compared to "we solve remittance for all the unbanked")

+1 to that.

I think in the past it was more tempting to try to solve all the problems at once, because it was easy to perceive how many problems there were and that not enough people were perceiving it.

But now there is enough mindshare and activity to just focus on one thing and that made more sense to begin with.

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

#272

Post by Erlich_Bachman » Thu, Dec 03, 2020, 7:40 PM UTC

postingpals wrote: post #263

Erlich_Bachman wrote: post #254

Earlier quoted context omitted.

Your logic stumbles when you consider gold. "no one uses it" either to "buy things", and yet it is valueable and has been so for eons. Store of value is a very important function in itself.

The gold standard was abandoned precisely because it was inferior. It was pretty useful up until early 20th century as a medium of exchange too. People used to use gold coins to buy things, didn't they?

Now it's not, and yet it's still valueable.

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

#273

Post by modeless » Thu, Dec 03, 2020, 7:43 PM UTC

root_axis wrote: post #240

nofunphil wrote: post #229

Earlier quoted context omitted.

Buying Bitcoin is becoming similar to buying gold. It’s a Store of Value. Why is gold an investment? Because it’s scarce and we have, as a society, decided it’s an investment. There may be nuances here, but that’s the basic idea. Bitcoin is digital gold. Most other tokens are similar buying fiat currencies which can help if you local fiat currency is hyper-inflating. But then some tokens give access to de-fi which a…

Cryptocurrency isn't actually scarce though, it may be "scarce-like" but the scarcity is an artificial property that can be arbitrarily changed, unlike gold's scarcity which is an unalterable property of reality.

Bitcoin is scarce; the consensus mechanism makes it prohibitively difficult to change the supply. It's barely even possible to do widely desired protocol upgrades; anything more is simply out of the question. The scarcity is far more secure than any fiat currency.

I think it would actually be easier to increase the supply of gold via asteroid mining than to increase the Bitcoin supply. That doesn't require consensus and will probably happen someday.

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

#274

Post by root_axis » Thu, Dec 03, 2020, 7:44 PM UTC

tiwprueowut47 wrote: post #251

root_axis wrote: post #240

Earlier quoted context omitted.

Cryptocurrency isn't actually scarce though, it may be "scarce-like" but the scarcity is an artificial property that can be arbitrarily changed, unlike gold's scarcity which is an unalterable property of reality.

Gold’s scarcity is certainly not unalterable. Gold can be destroyed, increasing its scarcity. Plus we already have the technology to create gold out of other elements in a particle accelerator, decreasing its scarcity. That process happens to be prohibitively expensive, but there is no guarantee it remains so. The scarcity of cryptocurrencies and gold both depend on the actions of other people.

Yes, it's possible to destroy or transmute gold, but as you already stated, it's prohibitively expensive thus with respect to scarcity it might as well be impossible. Yes, that might change in the future but there is no reason to believe that it will.

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

#275

Post by lotsofpulp » Thu, Dec 03, 2020, 7:47 PM UTC

pashamur wrote: post #225

lotsofpulp wrote: post #112

Earlier quoted context omitted.

The price of the house structure itself decreases with time. The price of the land the house sits on might increase, depending on where it is. Land prices in very, very few areas have increased sufficiently to match a risk adjusted return (or even the nominal return) of a broad market index fund, such as VOO or VTI. Especially considering the liabilities and ongoing maintenance costs with owning housing structures. T…

*with the caveat that those very few areas also hold a large percentage of the population, since land prices are correlated with population density and zoning regulations (i.e. see Hong Kong for ex.) One thing to not forget is the amount of leverage provided for you in the housing market is disproportionate compared to the leverage you would get in stocks (20% down is 5x leverage, and there are some options to get in…

Absolutely right about the advantages of leverage. And with real estate, you can do a 1031 tax exchange and continue growing your wealth tax free indefinitely as long as you can pay the property taxes. Although, residential real estate offers a pittance in returns compared to commercial.

But I think almost everyone who doesn't have an interest in doing the grunt work of real estate investing would be better served sticking their money in an index fund ETF rather than real estate. It's drastically less work, less worry. Extremely low cost broad market index funds and ETFs are relatively new too, I'd be interested in seeing an analysis of performance after they went mainstream.

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

#276

Post by andrewmcwatters » Thu, Dec 03, 2020, 7:47 PM UTC

I’m enjoying sitting on the sidelines and watching people “invest” in a digital “currency” that you cannot spend, does not produce cash flow, and whose values are determined by other shmucks buying it from previous shmucks.

What a time to be alive. No wonder the S&P 500 CAPE ratio is beyond the 1929 high. No one has any idea of what the intrinsic value is of anything.

Investing in companies that don’t make a profit, investing in companies whose investment returns are below real inflation, investing in SPACs that don’t expose financials.

You’d literally make more money today taking your cash and starting a business than dumping it in some of these worthless pursuits.

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

#277

Post by the_gastropod » Thu, Dec 03, 2020, 7:50 PM UTC

Erlich_Bachman wrote: post #246

mrlala wrote: post #243

Earlier quoted context omitted.

Honestly that is just bs. Gold is a physical thing that is scarce and has real uses other than being treated as 'money'. We have only mined a cube with 28 meter sides of gold from the dawn of time! It's useful- that's why it has value. If it wasn't useful (pretty for jewelry and an essential industry product) then it would be fairly worthless. You say crypto is scarce? The scarcity is artificial, and you can create a…

They already have created an infinite number of them. Nobody is buying them. BTC and a couple of others have the property of being valueable (which is decided in consensus by the users in the real world), while also being scarce. Nobody cares if some shitcoin on the bottom of coinmarketcap is not scarce. It is irrelevant. So yes, useful cryptocurrencies are scarce.

> BTC and a couple of others have the property of being valueable

I'm not sure this is a rock-solid argument. Ponzi schemes also have value (until they don't). MLM's are often massively valuable, too. But most people would acknowledge they're little more than scams to the huge majority of people "invested" in them.

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

#278

Post by flignats » Thu, Dec 03, 2020, 7:50 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…

The world's first global, decentralized, transparent, immutable ledger has come into existence. And you can own a piece of it by owning Bitcoin.

Who knows what it will be used for, but it will be used.

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

#279

Post by myth_buster » Thu, Dec 03, 2020, 7:50 PM UTC

Was this the reason prices spiked last month?

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

#280

Post by spurgu » Thu, Dec 03, 2020, 7:52 PM UTC

brightball wrote: post #222

spurgu wrote: post #191

Earlier quoted context omitted.

Imagine a society not based on consumerism and quarterly report increases. Gasp! Back in the day people used to get interest (covering more than inflation) from holding money in their bank accounts. What's changed?

My understanding has always been interest rates. Interest rates on savings accounts are supposed to be slightly lower than interest rates on loans with the bank taking a profit in the middle. Home loans used to be much higher, in the 10-15% range and you could get 6-7% on your savings account. With home loans in the 2-3% range, those margins aren't feasible anymore. But that's probably an old understanding. I'm sure…

I'm not an economist either but what you said makes sense. We instead nowadays have tons of various fees on our bank accounts so the return ends up being negative. And we're supposed to accept that this is fine and normal? Economy is booming? Give me a break.

This is why creative solutions like bitcoin, if not (necessarily) directly solving anything, do give pause for thought, and maybe shine some hope for a non-corrupt (immutable) system of money.

I need to read up on whether a deflationary currency/economy would really be an issue, or if it just wouldn't work with how things are currently set up.

Edit: And yes, it's a complex issue with no outright easy answers. Doesn't hurt to think about it though.