Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

What the Crypto Crowd Doesn’t Understand About Economics

bloomberg.com

Post reply on HN
Print view View original

61–70 of 88 posts

Re: What the Crypto Crowd Doesn’t Understand About Economics

#61

Post by JumpCrisscross »

martin1975 wrote: post #40
tfehring wrote: post #32

I still don't see how you get to a cryptocurrency that's broadly useful as a currency without enough price stability for it to be a unit of account in some sense. Tesla may have accepted BTC for payment, and it might do so again, but is it really going to commit to pricing its next model at (say) 1 BTC and just let the dollar-denominated price swing wildly? Probably not - its competitors price in dollars, so if BTC g…

Doing a stablecoin to replace something like the USD is an extremely difficult problem. Reserve.org is one company which understands the gravity of the issue and is committed to producing a stablecoin for anyone, worthy enough to replace the USD.

> a stablecoin to replace something like the USD is an extremely difficult problem

It's also a solved one.

There is one party on the planet that can credibly solve this problem, and it's the Fed. Walter Bagehot wrote about this effectively in 1873 [1], it's still comprehensible, and it is to the Federal Reserve Act what the Declaration is to the Constitution.

Every U.S. dollar stablecoin issued by someone who is not (a) the Fed and (b) fully reserved is trying to solve the impossible trinity [2].

[1] https://en.wikipedia.org/wiki/Lombard_Street:_A_Description_...

[2] https://en.wikipedia.org/wiki/Impossible_trinity

Re: What the Crypto Crowd Doesn’t Understand About Economics

#62

Post by marcus_holmes »

lamestream wrote: post #22
marcus_holmes wrote: post #11

Earlier quoted context omitted.

I just spent a couple of minutes in dev tools deleting about 50 script, iframe and div tags that didn't contain the actual text. Then remove the "overflow:hidden" css style on the top div. Utterly miserable waste of everyone's bandwidth. But that's media for you...

Right?! They seem desperate for income, I can't figure out why. Oh here's a link to skip paying them for a subscription btw.

It's not the business model I object to. Though they'll probably need to do something different to actually make it work: you can't write clickbaity shite that optimises for ad revenue and then expect people to pay for it.

It's the horrible inefficiency and ineffectiveness of their markup that I object to. Megabytes of script and tags that achieves nothing except using up bandwidth and cpu cycles. Why are there 3 iframes (iirc) in there? Why are there so many script tags? Can't they use a packer? It's all so badly done.

Re: What the Crypto Crowd Doesn’t Understand About Economics

#63

Post by walkedaway »

TheFreim wrote: post #26
arberx wrote: post #10

Earlier quoted context omitted.

Most people do not understand anything about economics-in fact most economics is a work in progress.

I'd go farther and take the Taleb route that NOBODY understands economics due to its random nature.

Thomas Sowell seems to have a solid grasp on economics. Too bad people don't study his work. Maybe if he wasn't black people in the US would listen to him.

Re: What the Crypto Crowd Doesn’t Understand About Economics

#64

Post by black6 »

> A second point, oft neglected in the crypto community, is that crypto prices won’t continue to go up forever at high rates.

The True Believers expect and want this to happen. It has to level out to be a currency. Cryptocurrency is useless as a currency with the current volatility as a result of ignorant and rank speculation.

Re: What the Crypto Crowd Doesn’t Understand About Economics

#65

Post by koheripbal »

JumpCrisscross wrote: post #34
koheripbal wrote: post #29

The fact that having a deflationary money supply is bad, is even debated in cryptocurrency forums is the clearest indication that they have no idea how economics works. ...also, the point of a currency is to act as a STABLE unit of exchange, not some speculative moon-shot. Once these money supply and stability issues are ironed out, and once the scalability problem is solved, I think we might really have something.

> the point of a currency is to act as a STABLE unit of exchange Very few informed observers seriously expect crypto to become a general-use currency. That's a role it detached from years ago, first in practice and then in rhetoric. The closest analog to what crypto seems to want to become in our financial markets is in risk-free assets. Universal collateral. This used to be gold. Now it's Treasuries and Bunds. None…

If we forget all the "wants" various parties might have today, I think we can all agree that IF the scalability issue can be ironed out, then there is extremely significant value in cryptocurrencies acting as a real world currency.

Re: What the Crypto Crowd Doesn’t Understand About Economics

#66

Post by endisneigh »

The problem with cryptocurrencies is very simple.

At some point X-COIN will reach a maximum price, $MAX. Why would anyone buy X-COIN at $MAX? By definition it will lose you money. You can repeat this argument with any amount, because ultimately you're just going to subject someone else to the same situation.

Regress this to its logical extreme and you see there's no point of buying it at all, unless crypto itself has some meaningful value beyond its converted price to fiat. That itself has yet to be proven.

Re: What the Crypto Crowd Doesn’t Understand About Economics

#67

Post by fredthomsen »

koheripbal wrote: post #29

The fact that having a deflationary money supply is bad, is even debated in cryptocurrency forums is the clearest indication that they have no idea how economics works. ...also, the point of a currency is to act as a STABLE unit of exchange, not some speculative moon-shot. Once these money supply and stability issues are ironed out, and once the scalability problem is solved, I think we might really have something.

It's very easy for people today to forget the 1800s that had significant periods of deflation and thus one of the reasons the federal reserve was created... although they allowed deflation to happen during the great depression as well. There is certainly some debate that can be had about the way to easy money policies that exist today (and I do think it's far too dovish), but people need to learn their history and realize the damage that deflation does.

Re: What the Crypto Crowd Doesn’t Understand About Economics

#68

Post by bun_at_work »

walkedaway wrote: post #63
TheFreim wrote: post #26

Earlier quoted context omitted.

I'd go farther and take the Taleb route that NOBODY understands economics due to its random nature.

Thomas Sowell seems to have a solid grasp on economics. Too bad people don't study his work. Maybe if he wasn't black people in the US would listen to him.

This is an outrageous statement.

Thomas Sowell is a widely cited and studied economist. Many people study his work (including myself!). What does his being black have to do with anything? There is no group of people ignoring him for being black.

In fact, the contemporary politics would suggest that, since he's black, he'd be democrat, but his economics are very libertarian, a group more associated with racists. So what are you on about?

People don't "listen" to him because he's incredibly biased towards free-market economics, not because his skin color.

Re: What the Crypto Crowd Doesn’t Understand About Economics

#69

Post by Jommi »

arberx wrote: post #10
runbathtime wrote: post #8

Most people in crypto do not understand anything about economics. They understand ponzi/ greater fool theory and how to obfuscate to the public and regulators to pull the wool over someone's eyes.

Most people do not understand anything about economics-in fact most economics is a work in progress.

this is true, its also problematic because you're studying a system that not only constantly changes but will also change based on the fact that you observe and report on it.

Re: What the Crypto Crowd Doesn’t Understand About Economics

#70

Post by jMyles »

mech422 wrote: post #45
jMyles wrote: post #42

Earlier quoted context omitted.

I think the former is a perfectly reasonable consideration, while the latter is short-shrift. Am I wrong?

sorry - I lost track of the former and the latter... Guess I need more coffee :-) What are they referring to?

I think that the consequences of imperialism and warfare are reasonable understood as part of the ecological toll of the dollar for the purposes of comparisons to the carbon costs of PoW mining. (that's the former)

...while I don't think that fiat currency will suddenly crash based on a eureka moment regarding the monetary policies by which the dollar is minted and lent (the latter).

Post reply on HN