Crypto is an unproductive bubble • Hacker News Board

Re: Crypto is an unproductive bubble

#201

Post by gonehome » Sat, Mar 19, 2022, 2:15 AM UTC

lern_too_spel wrote: post #192

gonehome wrote: post #175

Earlier quoted context omitted.

That’s only true if you must transact in fiat. It’s mostly true today, may be less true in a future with this kind of restriction on on-ramps and off-ramps. Even so, it’d have to be a global restriction on all exchanges which is more challenging to coordinate.

If your tokens become valueless to other Canadians, other Canadians won't accept them. Non-Canadians who trade with Canadians won't accept them because they can't trade them with Canadians. The value goes to zero by induction.

Yeah, a lot of this assumes you get out of Canada at that point. Just like the people fleeing Russia or Ukraine.

The thing crypto gives you is the capability to get your wealth out intact (at least whatever you had moved into self-custody). If you have fiat in banks frozen by the Canadian government your wealth is trapped.

You’re right if Canada banned Bitcoin it could influence the value of the coin. Similar to governments refusing transactions in rubles. The difference in capability is in the ability to move your wealth and that short of global coordination a global store of value (controlled supply, non-government etc.) is more resilient. The fiat comparison would be having the entirety of your wealth in cash in your house - obviously not viable (and good luck trying to cross a border with it).

Crypto is also more resilient to government meddling in currency production (this is often over-stressed in US, but is a real problem in developing countries where kleptocrats devalue the currency to steal the wealth).

It’s more similar to buying gold and having it on you, but with crypto you don’t have to keep it on your person to maintain direct control of it. You just need to know the seed words.

Re: Crypto is an unproductive bubble

#202

Post by bestcoder69 » Sat, Mar 19, 2022, 2:16 AM UTC

Nextgrid wrote: post #145

Cryptocurrencies have a valid but very specific use-case: being able to transact in a hostile environment. It does so by making certain trade-offs such as an energy-intensive verification process. This is a very valid use-case when you need to transact against the will of a powerful adversary such as governments. It needs to be there and needs to be protected just like free speech needs to be protected. However, day-…

This is more commonly referred to as "crime".

Re: Crypto is an unproductive bubble

#203

Post by anonporridge » Sat, Mar 19, 2022, 2:18 AM UTC

Nextgrid wrote: post #145

Cryptocurrencies have a valid but very specific use-case: being able to transact in a hostile environment. It does so by making certain trade-offs such as an energy-intensive verification process. This is a very valid use-case when you need to transact against the will of a powerful adversary such as governments. It needs to be there and needs to be protected just like free speech needs to be protected. However, day-…

Case in point, marijuana and sex work/pornography, even where legal, are very often not permitted in the financial system and often have to deal directly with physical cash, and of course were some of the early adopters of cryptocurrency.

You don't have to find either of these use cases acceptable to understand the risk at play when the financial system can be used as a mechanism of control used to try to snuff out things the establishment upper class doesn't like without going through proper legal channels and kept in check by our elected representatives.

Re: Crypto is an unproductive bubble

#204

Post by CountSessine » Sat, Mar 19, 2022, 2:18 AM UTC

mancerayder wrote: post #147

Aunche wrote: post #54

Earlier quoted context omitted.

>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.

Buybacks? If you're running a company profitably you're supposed to invest your cash to expand the business, not inflate the share price. The share price is supposed to be a reflection of your future profitability, not your future buyback schemes.

You're giving the earnings back to investors because you don't have anything to invest them in yourself. Just like you're supposed to.

It's just that you're just doing it through a buyback rather than a dividend because dividends in the US are taxed like plain-old income and buybacks turn into capital gains and are taxed less.

Re: Crypto is an unproductive bubble

#205

Post by deet » Sat, Mar 19, 2022, 2:20 AM UTC

Nextgrid wrote: post #145

Cryptocurrencies have a valid but very specific use-case: being able to transact in a hostile environment. It does so by making certain trade-offs such as an energy-intensive verification process. This is a very valid use-case when you need to transact against the will of a powerful adversary such as governments. It needs to be there and needs to be protected just like free speech needs to be protected. However, day-…

Seems like wishful thinking to me.

Unless crypto becomes actually useful for real world transactions, it has to be converted to fiat currency for use, and all the exchanges or technologies that do that conversion are subject to the will of governments.

There was literally a post on HN today in which a government proposed to curtail crypto transactions for entities it considers hostile: https://www.coindesk.com/policy/2022/03/17/senator-elizabeth...

Recently another government seized crypto assets from those it considered adversaries: https://www.coindesk.com/policy/2022/02/16/canada-sanctions-...

And those are just actions taken by relatively benign governments that use regulation to accomplish their goals instead of force. It's tough to think that government-level actors couldn't just disrupt the crypto networks directly if they so desired, either through cyber attacks (ie denial of service or exploiting vulnerabilities that almost certainly exist in the crypto networks). Or in extreme cases even just taking control of network infrastructure directly. Or shutting off the internet. And no, Starlink will not save crypto users against adversaries who can jam EM communications.

Governments are powerful and to think that crypto or anything in the internet space is resistant to that power in the most extreme situations is not wise.

Re: Crypto is an unproductive bubble

#206

Post by hypertele-Xii » Sat, Mar 19, 2022, 2:22 AM UTC

i_like_waiting wrote: post #124

jmull wrote: post #89

Earlier quoted context omitted.

This is typical crypto-hype. Notice that although many points are raised, it doesn’t address the direct objections of the previous post. Obfuscate, misdirect, and confuse the marks.

Thats because nobody refutes those points. Yes, transactions in crypto are irreversible. It might be bad for those number of factors. But even given those cons we see benefits in things mentioned above. E.g. my colleague can send bitcoin to his brother in russia. Tell me what other options to transfer value there are at the moment between west and russia. Very similar for ukraine.

Is it really your selling point that crypto is good because Russians can wage war while circumventing sanctions? The whole point of sanctions is to pressure bad actors to change. You've invented a technology that allows them to continue doing evil? Hurrah?

Re: Crypto is an unproductive bubble

#207

Post by ipaddr » Sat, Mar 19, 2022, 2:24 AM UTC

Nextgrid wrote: post #145

Cryptocurrencies have a valid but very specific use-case: being able to transact in a hostile environment. It does so by making certain trade-offs such as an energy-intensive verification process. This is a very valid use-case when you need to transact against the will of a powerful adversary such as governments. It needs to be there and needs to be protected just like free speech needs to be protected. However, day-…

Government is not the only reason. The credit card cartel will deny certain types of businesses in areas they consider shady like sex toys or legal drugs or certain media. Cryto offers a payment method for these cases.

Re: Crypto is an unproductive bubble

#208

Post by floodyberry- » Sat, Mar 19, 2022, 2:25 AM UTC

cf141q5325 wrote: post #162

babypuncher wrote: post #42

Earlier quoted context omitted.

They view it as a feature, but for all the reasons this poster pointed out, the rest of us view it as an anti-feature.

Then you are not the target audience. You want additional safety at the cost of giving up your autonomy. Good luck with that

Exactly! Imagine not wanting to be your own bank or lose your life savings to a buggy contract... pathetic

Re: Crypto is an unproductive bubble

#209

Post by cf141q5325 » Sat, Mar 19, 2022, 2:25 AM UTC

daenz wrote: post #186

cf141q5325 wrote: post #179

Earlier quoted context omitted.

The market speaks for itself. One works as a store of value, one doesnt.

I think we're debating two different points. My point is about the perception of the trustworthiness of crypto by your average person. Your point seems to be that crypto is a better financial instrument.

It boils down to the same thing. Inflation is nothing more then inflation expectation, as people change their behavior as a result. The fact that fiat is moving towards 10% inflation is a direct result of a reduction in trust in it as a store of value. People expect it to be worth less, and as a result it is. If you look back over any period of time you have a constant erosion of trust in its ability to store value since its inception in the 70s. For cryptos its the opposite.

You can make the argument about different market sizes though. But the trend in both directions is clear.

Re: Crypto is an unproductive bubble

#210

Post by anon2020dot00 » Sat, Mar 19, 2022, 2:26 AM UTC

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…

Stop equating crypto with stocks please.

Stocks represent ownership so just by that virtue, it has intrinsic value.