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New study detects lottery-like behavior in cryptocurrency markets

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Re: New study detects lottery-like behavior in cryptocurrency markets

#81

To the anti-BTC crowd: Yes, the current price of crypto is based on speculation, not in their current utility. But there also was a dotcom bubble 20 years ago. Does that mean that the World Wide Web is useless? Cryptocurrencies will be highly useful as stores of value and maybe as currency. We're just not there yet. This is just the Gartner hype cycle, with the addition that for the first time we have a global market…

Isn’t a better analogy to compare BTC to pets.com and crypto (the technology) to the web?

Re: New study detects lottery-like behavior in cryptocurrency markets

#82

It makes sense. In my experience the primary goal for most crypto holders is to be a part of a new elite. This is why the most popular currencies have a fixed supply. That way, if they're popular earlier adopters get to be a part of the elite. With such a premise it makes sense to treat crypto like the lottery as the gain/loss likelihood is very similar to say, Mega Millions. I do see value in a crypto that's pinned…

> In my experience the primary goal for most crypto holders is to be a part of a new elite. This part doesn’t sound very different from investing in startups, where everyone is hoping to get in really early on the next unicorn. Seems to me the main difference is that this kind of “investment” is generally only available to people who are already “elite” in some sense (i.e. sufficiently wealthy and/or connected).

I almost hate to say it, but compare the benefit of silicon valley startups to broader society and the benefit of bitcoin to broader society. So, either way, lucky duckies get mega rich, richer than anyone should be, but at least the SV stuff usually actually does something.

Re: New study detects lottery-like behavior in cryptocurrency markets

#83

It makes sense. In my experience the primary goal for most crypto holders is to be a part of a new elite. This is why the most popular currencies have a fixed supply. That way, if they're popular earlier adopters get to be a part of the elite. With such a premise it makes sense to treat crypto like the lottery as the gain/loss likelihood is very similar to say, Mega Millions. I do see value in a crypto that's pinned…

> the gold standard, for example, contributed in some ways to The Great Depression

Most people don’t realize this. A great book on the topic is Lords of Finance which outlines how the gold standard made the Great Depression truly great.

Even during covid, I don’t think people realize just how fundamentally important Fed actions were to basic things like keeping food on grocery store shelves.

Re: New study detects lottery-like behavior in cryptocurrency markets

#84
post #62

It makes sense. In my experience the primary goal for most crypto holders is to be a part of a new elite. This is why the most popular currencies have a fixed supply. That way, if they're popular earlier adopters get to be a part of the elite. With such a premise it makes sense to treat crypto like the lottery as the gain/loss likelihood is very similar to say, Mega Millions. I do see value in a crypto that's pinned…

"I do see value in a crypto that's pinned at a weighted average of every single currencies' worldwide weight" The values of currencies are only relative (established by exchange rates). How do you calculate an average for all the existing currencies (weighted or otherwise)? What am I missing?

You use the price of some common basket of goods. Most participants in an economy are chiefly interested in the price of goods and services, after all, not other currencies. Of course, choosing the basket of goods and adjusting it over time is a little tricky...

Re: New study detects lottery-like behavior in cryptocurrency markets

#85

Earlier quoted context omitted.

I think there is an argument to be made that as stock growth has outpaced GDP growth for many years now that the connection between the markets and the real world has become tenuous. The fundamentals become less important over time as crazy speculation continues to win out. GME is a symptom of a broken system.

What is broken about it? People were over leveraged and others acted on it. Seems to be working as intended. If GME is at this P/E a year from I'll agree with you

The complete disconnect from reality? How much of that money is going to be available to Gamestop to turn their business around? How is this different than gambling on horse races except that instead of horses you have corporations?

Re: New study detects lottery-like behavior in cryptocurrency markets

#86
post #52

It makes sense. In my experience the primary goal for most crypto holders is to be a part of a new elite. This is why the most popular currencies have a fixed supply. That way, if they're popular earlier adopters get to be a part of the elite. With such a premise it makes sense to treat crypto like the lottery as the gain/loss likelihood is very similar to say, Mega Millions. I do see value in a crypto that's pinned…

> I do see value in a crypto that's pinned at a weighted average of every single currencies' worldwide weight, but it's a perfectly stable currency If every government in the world is printing money like crazy, how is this "stable". In the US, 23% of the money supply was created in the last year, with no visible inflation (excluding asset prices, home, energy, etc). God knows what it'll be 5 years from now What has b…

If the dollars are borrowed or printed in exchange for collateral, no value has been destroyed, just dollars have been issued to account for that value. Not all newly printed dollars are the same, and this idea that M1/M2 volume is important to determine inflation is an outdated way of thinking.

What the US has "stimulated" is preventing the economy from going into a recession. There are many businesses that are open today because of the money the US gov't has put into the economy. There are landlords that have been paid because of the money put into the economy. And the US economy is forecasted to have over 6% growth this year.

Don't conflate the economy doesn't seem like it's booming/stimulated with the money the US gov't has pumped into the economy has done nothing. I know I can't prove a counterfactual, but if we had done nothing, the US would not IMO be fairing so well right now.

Re: New study detects lottery-like behavior in cryptocurrency markets

#87
post #45

Earlier quoted context omitted.

> My biggest concern is a fixed-supply currency gives no government the ability to provide stimulus if necessary. Good, that's the intention.

Ironically, the cryptocurrency world as a whole is constantly increasing the supply of cryptocurrency and crypto assets. The ultimate supply of Bitcoin and other coins might be fixed, but we’re seeing new cryptocurrencies rolled out all the time. The number of altcoins on the market is staggering and it has never been easier for someone to arbitrarily create their own coin. It’s not uncommon for popular cryptocurrenc…

But that's a better way of doing it, isn't it? A new currency poses the question of additional value to the relevant population and the population determines its value.

This new supply in the form of another cryptocurrency will go through price-discovery and it may turn out that it will fail to reach or maintain any significant market capitulation.

Rather than some central authority (ab)using their position to weigh into the answer to that question that they themselves are asking.

I see this equivalent to updating a contract unilaterally and arguing it is an upgrade versus letting the contract that both parties agreed on stay intact and sign additional contracts.

If the government had printed SARS-COV-2-USD, we could have collectively decided it is backed by hot air and valued it differently but instead we were forced to dilute the supply of our already existent supply.

Re: New study detects lottery-like behavior in cryptocurrency markets

#88

To the anti-BTC crowd: Yes, the current price of crypto is based on speculation, not in their current utility. But there also was a dotcom bubble 20 years ago. Does that mean that the World Wide Web is useless? Cryptocurrencies will be highly useful as stores of value and maybe as currency. We're just not there yet. This is just the Gartner hype cycle, with the addition that for the first time we have a global market…

There is absolutely no evidence backing this. The utility of the WWW was eminently visible to experts even before it existed. I have yet to meet an expert in equivalent fields who complains that the core issues in finance can be solved by cryptocurrencies. In fact I don't really see any issues that can be solved by crypto. Trust issues? Crypto users are as likely if not more to be scammed and the technology itself do…

Purchasing controlled substances and illegal weapons is a problem it solves.

Re: New study detects lottery-like behavior in cryptocurrency markets

#89

Earlier quoted context omitted.

You're getting crazy down voted, instead people should reply.

What is there to reply about? Schiff has been calling bitcoin a scam for years. The linked tweet says that no one will be making a profit, which ignores a lot of people who have already made a lot of money. So it's disingenuous, also he has been wrong for a decade.

bitcoins are valued at $ 600 billions, with 6 million active users it's an average of $ 100,000 per user, which is not much in 10 years time.

probably less than 1% made a lot of money, the rest lost some.

Re: New study detects lottery-like behavior in cryptocurrency markets

#90
post #83

It makes sense. In my experience the primary goal for most crypto holders is to be a part of a new elite. This is why the most popular currencies have a fixed supply. That way, if they're popular earlier adopters get to be a part of the elite. With such a premise it makes sense to treat crypto like the lottery as the gain/loss likelihood is very similar to say, Mega Millions. I do see value in a crypto that's pinned…

> the gold standard, for example, contributed in some ways to The Great Depression Most people don’t realize this. A great book on the topic is Lords of Finance which outlines how the gold standard made the Great Depression truly great. Even during covid, I don’t think people realize just how fundamentally important Fed actions were to basic things like keeping food on grocery store shelves.

There is plenty of blame to throw around during interventionist policies during the Great Depression. Take a look at Wickard v Filburn:

> An Ohio farmer, Roscoe Filburn, was growing wheat to feed animals on his own farm. The US government had established limits on wheat production, based on the acreage owned by a farmer, to stabilize wheat prices and supplies. Filburn grew more than was permitted and so was ordered to pay a penalty. In response, he said that because his wheat was not sold, it could not be regulated as commerce, let alone "interstate" commerce (described in the Constitution as "Commerce... among the several states"). The Supreme Court disagreed: "Whether the subject of the regulation in question was 'production', 'consumption', or 'marketing' is, therefore, not material for purposes of deciding the question of federal power before us.... But even if appellee's activity be local and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce and this irrespective of whether such effect is what might at some earlier time have been defined as 'direct' or 'indirect

It was illegal for farmers to grow wheat above a certain amount... on their own land... to feed their own animals...

You have people trying to tinker with complicated system. Gold is not complicated. It's a unit of account. There's a fixed amount of it with a pretty well known supply and demand. This is the way the world existed since 1971. That's the main value prop of crypto currencies, and by the price appreciation and interest, its a pretty strong feature. Its good to have a fixed unit of account available in the world when money supply can jump by 25% at any time due to the actions of a dozen or so individuals appointed by politicians

https://en.wikipedia.org/wiki/Wickard_v._Filburn

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