New study detects lottery-like behavior in cryptocurrency markets • Hacker News Board

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

#101

Post by africanboy » Thu, Apr 01, 2021, 7:25 PM UTC

therein wrote: post #87

PragmaticPulp wrote: post #80

Earlier quoted context omitted.

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…

> instead we were forced to dilute the supply of our already existent supply

the expenses to keep the system running are diluted too.

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

#102

Post by whatshisface » Thu, Apr 01, 2021, 7:27 PM UTC

35fbe7d3d5b9 wrote: post #99

bko wrote: post #52

Earlier quoted context omitted.

> 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 every government in the world is printing money like crazy, how is this "stable". It's not stable for most governments, and they risk an inflationary crisis if they go too far. But the US government is a bit different: the dollar is backed up on one side by Saudi oil exports and OPEC agreements to reinvest profits into US Treasury bonds. And on the other side is the Fifth Fleet.

How exactly does the Fifth Fleet back the dollar?

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

#103

Post by gher-shyu3i » Thu, Apr 01, 2021, 7:28 PM UTC

vkou wrote: post #66

kneel wrote: post #51

Earlier quoted context omitted.

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

What makes you so eager to live in a deflationary money system?

It worked forever until the greedy elite decided to move from a gold backed currency so that they're able to print money at whim to further their interests, while leaving the rest of the people far behind.

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

#104

Post by rodiger » Thu, Apr 01, 2021, 7:31 PM UTC

julienb_sea wrote: post #32

rodiger wrote: post #12

Earlier quoted context omitted.

What? Plenty of crypto projects have real utility. Also for a counterpoint: commodities such as gold and other precious metals are predominantly traded as speculative vehicles.

To be fair, the utility of crypto projects has remained primarily in theory. There is only minimal advantage to using crypto for actual payments in any legal transaction, and there are some pretty glaring disadvantages (volatility for one). Also, I'm not sure your counterpoint is that legitimate. No one is investing in gold in the hopes that it doubles or triples in value, whereas that is clearly the hopes of many BT…

Regardless of the scale, the counterpoint is that many of the utility-first investments listed are not, in fact, based on utility. They are speculative investments based on hopeful price increases.

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

#105

Post by darcys22 » Thu, Apr 01, 2021, 7:33 PM UTC

Daishiman wrote: post #64

young_unixer wrote: post #38

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…

existing markets by their very nature don't want to be disrupted.

Its like saying librarians didnt see any issues with the storage of information before the internet came along.

The ‘issues solved’ by programmable money are the opportunity for full automation of the finance industry and for businesses to interact with it via smart contracts (instead of accountants and lawyers)

Uniswap could be a replacement for all the worlds exchanges, real estate agencies, commodities markets (including livestock) and your business could buy items from these markets with a script.

Combine this with something like self driving cars delivering goods and you have a whole supply chain that functions with zero human involvement.

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

#106

Post by rodiger » Thu, Apr 01, 2021, 7:33 PM UTC

qeternity wrote: post #75

rodiger wrote: post #12

Earlier quoted context omitted.

What? Plenty of crypto projects have real utility. Also for a counterpoint: commodities such as gold and other precious metals are predominantly traded as speculative vehicles.

Ok, I’ll play along. Which projects are those?

Decentralized finance is pretty massive right now and has some really novel ways to deploy capital. It's not mainstream or outside of crypto perhaps but it is definitely based on strong utility.

Scroll down this list[0] and you'll find many projects providing a ton of utility (and some, I'm sure, that do not, but I'm definitely not claiming all crypto projects are legitimate/useful)

[0] https://defipulse.com/

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

#107

Post by cmoscoso » Thu, Apr 01, 2021, 7:35 PM UTC

gibrown wrote: post #81

young_unixer wrote: post #38

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?

I would say pets.com is better for the environment than the web. :)

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

#108

Post by ska » Thu, Apr 01, 2021, 7:36 PM UTC

sosuke wrote: post #35

iso1631 wrote: post #25

Earlier quoted context omitted.

> Have you ever tried to trade with someone outside of your country, it's not easy or cheap. Yes, it's easy and cheap

I spent $25 sending a $300 wire transfer from my bank to a different bank. It was easy. But that is not at all cheap. The only service around that allowed a Canadian friend to send me money was PayPal. His bank and mine didn't feel like talking to each other.

I spent about $75 sending a $250,000 wire transfer (actually split, but nominally) from my bank to a bank in another country. It was easy, safe, and cheap.

Wire transfers really aren't designed for your $300. You can complain that EFT should be easier (like they are in Europe) but that isn't a problem with the currency. You could have sent your friend a check for I get that change is frustratingly slow in this, but none of it requires a fundamental currency or technology change. I just paid my rent by phone for $0 in fees, and regularly exchange funds with friends for the same. Between countries this is harder but that's more regulatory than technical.

Unless you are taking the (extreme) view that states shouldn't be able to see, control, or tax/tariff such transactions your issue is with the regulatory hurdles and incentives to integrate incorporating them, not on the networks (or currencies).

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

#109

Post by anonporridge » Thu, Apr 01, 2021, 7:37 PM UTC

endisneigh wrote: post #27

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…

Even years ago before the previous bull run, the most compelling narrative was that bitcoin would first displace gold as a store of value, and then maybe become a global currency. Some people did still cling to the 'digital cash for everyone' narrative, but it's pretty clear that doesn't scale. It's not clear if bitcoin will scale for global payments with second layers, but it seems like the most compelling approach.

Now, there is a competing narrative that bitcoin doesn't even need to take over as a currency. Rock solid store of value that is impossible to debase is more than enough to still be worth at least an order of magnitude more. It's a technology to protect savers from having their wealth stolen through currency inflation. Wealthy people already protect themselves with a diversified basket of assets and treat currency like a hot potato. But the poor and middle class often don't have the knowledge, time, or access to protect their wealth.

The trend of widening wealth inequality in the US seems to have taken off right around the time we abandoned the gold standard in the 70s. It used to be that everyone could just save their currency and that was a really good store of value. Now savings accounts yield ~0.5% and you have to put your money in more risky assets just to preserve your value.

It could be that we end up with a world with both bitcoin as a reserve asset, where you sweep all your excess cash that you don't want to invest, and government fiat currencies, which they can continue to use for stimulus and to print their way out of debt, but without debasing savers to do it as they are now.

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

#110

Post by rodiger » Thu, Apr 01, 2021, 7:39 PM UTC

andrewmutz wrote: post #17

rodiger wrote: post #12

Earlier quoted context omitted.

What? Plenty of crypto projects have real utility. Also for a counterpoint: commodities such as gold and other precious metals are predominantly traded as speculative vehicles.

Which crypto projects are providing real utility to people outside the crypto space? I can think of using bitcoin for remittances or drug purchases, but other than that I have trouble thinking of compelling examples.

Said more in another comment below but decentralized finance is pretty big. There are a lot of novel ways to deploy capital there. Check out any of the projects listed here and feel free to dig in more/ask questions: https://defipulse.com/