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Crypto is an unproductive bubble

alexkolchinski.com

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Re: Crypto is an unproductive bubble

#51

Post by UncleMeat »

gonehome wrote: post #40
jmcgough wrote: post #19

One of the biggest drawbacks for blockchain is that transactions can't be revoked after the fact (with the only exception being costly forks of the entire ledger), and there's no additional human oversight (like I'd get when sending a large amount of money through a bank) to protect me. If someone steals my credit card, I have my credit card company to give me some level of protection. They can block transactions if…

Banks won’t protect you from wire fraud either. I’ve written this elsewhere when this topic routinely comes up and crypto is dismissed, but the capability of self-custody is the thing to pay attention to. Nothing else has this capability to the same extent. Today we store most of our wealth in assets (market index funds, stocks, real estate, etc.) and some (typically very little, and rarely outside of a bank account)…

> Banks won’t protect you from wire fraud.

They will if you didn't initiate the wire. If you typed the wrong account number then you are SOL, but that's true of BTC too.

Re: Crypto is an unproductive bubble

#52

Post by paxys »

nly wrote: post #35
paxys wrote: post #7

While I agree with 2 and mostly agree with 3, I don't see how anyone can say "crypto is a bubble" with high confidence. Even if it is a 100% speculative investment with no real world use, that doesn't automatically make it a bubble. There are plenty of similar investment classes that have persisted through the ages and society has deemed perfectly valid – gold, art, precious gems, trading cards, virtual hats...I'm su…

Most of the other things you mentioned are collectibles. They're either rare, non-fungible or completely one-of-a-kind and therefore fought over in the niche markets in which they trade. Gold is a commodity with genuine industrial uses, and ingrained appeal to humans through thousands of years of being adorned and traded as jewelry. Sure, it's been diminished, we have so many materials now that can be used industrial…

That is circular reasoning. Bitcoin is also a collectable, with a fixed number of them (21 million) out there to collect.

Every investment we are talking about is only rare because the community that participates in it has decided they are rare. Otherwise there is nothing stopping me from taking a picture of a piece of art or trading card and reproducing it a million times.

Re: Crypto is an unproductive bubble

#53

Post by gonehome »

UncleMeat wrote: post #51
gonehome wrote: post #40

Earlier quoted context omitted.

Banks won’t protect you from wire fraud either. I’ve written this elsewhere when this topic routinely comes up and crypto is dismissed, but the capability of self-custody is the thing to pay attention to. Nothing else has this capability to the same extent. Today we store most of our wealth in assets (market index funds, stocks, real estate, etc.) and some (typically very little, and rarely outside of a bank account)…

> Banks won’t protect you from wire fraud. They will if you didn't initiate the wire. If you typed the wrong account number then you are SOL, but that's true of BTC too.

Yeah, the similarity there was more of my point. Wire Fraud theft often happens by scammers that have hacked title companies and send emails with fraudulent account numbers to people expecting them.

Frankly banks also rarely help people scammed via other means (Venmo, Apple Pay, Zelle, etc.)

Re: Crypto is an unproductive bubble

#54

Post by Aunche »

benreesman wrote: post #43

How many times are we going to have this conversation? Yes crypto is an asset bubble, alongside equities, real estate, precious metals, you name it. Money printer go brrrr, more dollars are chasing the same amount of Apple sells iPhones. Crypto has no intrinsic value, it pays no dividend and doesn’t give you proxy rights, just like all the tech equities. Proof of work burns a lot of electricity, though this is compli…

>Crypto has no intrinsic value, it pays no dividend and doesn’t give you proxy rights, just like all the tech equities.

Tech companies return money to their investors via buybacks. Most investors prefer this as they get to choose when they get taxed.

Re: Crypto is an unproductive bubble

#55

Post by evanextreme »

dist1ll wrote: post #30
jmcgough wrote: post #19

One of the biggest drawbacks for blockchain is that transactions can't be revoked after the fact (with the only exception being costly forks of the entire ledger), and there's no additional human oversight (like I'd get when sending a large amount of money through a bank) to protect me. If someone steals my credit card, I have my credit card company to give me some level of protection. They can block transactions if…

> One of the biggest drawbacks for blockchain is that transactions can't be revoked after the fact You can transfer money to an escrow smart contract that reverts the transaction if a third party confirms malicious activity. > They can block transactions if they think it's stolen, and if I report it as stolen I can claw back money from fraudulent purchases. Certain DLTs allow you to secure your account with SSI/DPKI…

i think the other problem with crypto, is that all of those things sound like great solutions that either involve significantly more hoops for a user to jump through or are problems the modern banking system have already solved for most people. the point was to have a bankless future, which turned out to be something absolutely no one wanted, so now it's just banks but the money has no consumer safeguards whatsoever. I don't see how this becomes a product someone like my parents would use with any regularity, even if indirectly

Re: Crypto is an unproductive bubble

#56

Post by [deleted] »

seibelj wrote: post #5

Counter point - art itself has absolutely zero non-monetary applications. If you disagree, then you must admit NFTs can be appreciated as art. If so, the argument of the OP is refuted. If you think art can be appreciated without being an NFT, then why pay any amount of money for any physical art when a super high resolution PNG does the same thing?

[deleted]

Re: Crypto is an unproductive bubble

#57

Post by aoeusnth1 »

benreesman wrote: post #43

How many times are we going to have this conversation? Yes crypto is an asset bubble, alongside equities, real estate, precious metals, you name it. Money printer go brrrr, more dollars are chasing the same amount of Apple sells iPhones. Crypto has no intrinsic value, it pays no dividend and doesn’t give you proxy rights, just like all the tech equities. Proof of work burns a lot of electricity, though this is compli…

Tech equities have buybacks.

Re: Crypto is an unproductive bubble

#58

Post by fmvab »

Jommi wrote: post #50
fmvab wrote: post #32

Another point I’d add: isn’t it telling that we haven’t come up with use cases for crypto that aren’t in some way speculation in the last decade plus?

I mean this argument falls apart easily on the debate about use cases for crypto. I'd stay away from making statements like this without backing them up.

What’s your counterexample?

Re: Crypto is an unproductive bubble

#59

Post by NaturalPhallacy »

Aunche wrote: post #54
benreesman wrote: post #43

How many times are we going to have this conversation? Yes crypto is an asset bubble, alongside equities, real estate, precious metals, you name it. Money printer go brrrr, more dollars are chasing the same amount of Apple sells iPhones. Crypto has no intrinsic value, it pays no dividend and doesn’t give you proxy rights, just like all the tech equities. Proof of work burns a lot of electricity, though this is compli…

>Crypto has no intrinsic value, it pays no dividend and doesn’t give you proxy rights, just like all the tech equities. Tech companies return money to their investors via buybacks. Most investors prefer this as they get to choose when they get taxed.

Unless they go under, then the money is just gone.

Re: Crypto is an unproductive bubble

#60

Post by jmcgough »

Jommi wrote: post #46
jmcgough wrote: post #38

Earlier quoted context omitted.

It's not quite the same. With cash, I have to meet them in person. I probably know their name or where to find them again. I can file a lawsuit, a police report. They have incentive to make things right for me because it can have real life repercussions for them. I'm not saying that it's an impossible problem to solve, but our society and legal system aren't structured in a way that makes it easy.

You're starting a fight you can't win here Your base assumption of knowing or finding them is not strong Crypto means you will always know who has your money and where it goes. We can build systems around repercussions for crypto too.

> You're starting a fight you can't win here

I'm not starting a fight, I'm having a discussion, which I think is the point of HN.

> Crypto means you will always know who has your money and where it goes.

If a stranger in another country steals $500 from me I'm going to have a really hard time doing anything about it. And knowing their wallet doesn't mean I know who they actually are, as those aren't tied to an identity.

What about exit scams? How many people have gotten their money back in those situations, or had any justice? You can make the argument that these people are investing in something that may not pan out, but we have a ton of legal regulations around that with fiat - lawsuits, criminal charges. Elizabeth Holmes is going to jail for misrepresenting what people were investing in. Institutional investing is limited to high-net-worth individuals or accredited investors to keep uneducated people from getting fleeced.

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