Coinbase targets financially vulnerable young adults • Hacker News Board

Re: Coinbase targets financially vulnerable young adults

#101

Post by roenxi » Thu, Dec 14, 2023, 6:26 PM UTC

avree wrote: post #76

exoverito wrote: post #23

Of all the antagonisms for young adults, I would say an easy method to buy cryptocurrency and hedge against inflation is not one of them. The much more significant antagonist for financially vulnerable young adults is the Federal Reserve and its inflationary monetary policy that has priced many out of ever owning a home. Furthermore, the elite's industrial policy of offshoring manufacturing to China, deindustrializin…

Weird, I know friends who lost all their savings to cryptocurrency. Don't know anyone who lost all their savings due to inflationary monetary policy.

1) Are you sure? Inflationary monetary policy is literally "people who try to hold cash will lose all their savings over 50 years". You must know someone who tried that; it's an easy mistake to make and most people are really bad at understanding investment.

2) The Bitcoin price is currently comparable to its all-time highs. So someone who lost all their money on crypto was doing something more exotic than just buying and holding a diverse basket of cryptos.

Re: Coinbase targets financially vulnerable young adults

#102

Post by latchkey » Thu, Dec 14, 2023, 6:26 PM UTC

dragontamer wrote: post #84

latchkey wrote: post #57

Earlier quoted context omitted.

You act like BTC is only available in the US.

People saying "inflation hedge" are at a minimum, English speakers, and secondly, are likely Americans who were concerned about the 9%+ inflation of a year or two ago. Alternatively, maybe they're British but the great inflation affected both sides of the Atlantic. Then again, Coinbase is an American company providing American services, so I think its safe to say that this topic is American focused.

Coinbase is an American company, but operates globally. From wikipedia:

"Coinbase operates as a remote-first company and has no physical headquarters.[5] As part of its SEC filing to go public, the company reported 43 million verified users, 7,000 institutions, and 115,000 ecosystem partners in over 100 countries."

As for inflation, let me refer you to this post (and thread), a favorite of mine.

https://news.ycombinator.com/item?id=26238410

Re: Coinbase targets financially vulnerable young adults

#103

Post by Geisterde » Thu, Dec 14, 2023, 6:26 PM UTC

dragontamer wrote: post #92

Geisterde wrote: post #90

Earlier quoted context omitted.

Value is subjective, not intrinsic. It is guarenteed to rise like everything else of limited supply; the value of fiat currencies must necessarily decrease over time in their operation, because the base monetary unit can only be issued as credit which must be paid back at interest. Were the value of fiat currencies to increase in any meaningful sense, it will result in widespread defaults in the banking sector.

> It is guarenteed to rise like everything else of limited supply They aren't making any more VHS copies of Toy Story, which IIRC was estimated to be ~21 Million copies of tape.

You are being pedantic, bitcoin has monetary qualities that put it in contention in this regard.

Re: Coinbase targets financially vulnerable young adults

#104

Post by dragontamer » Thu, Dec 14, 2023, 6:27 PM UTC

mdgrech23 wrote: post #97

dragontamer wrote: post #32

Earlier quoted context omitted.

> and hedge against inflation is not one of them BTC lost value through the great inflation and is only gaining value today now that inflation is down to 3%. Sounds like a pretty bad hedge against inflation. People need to stop repeating this lie. EDIT: If people need an inflation hedge, buy i-bonds first, and then TIPS after you max out. These are indexed against CPI, so the more inflation happens the more i-bonds/T…

Last time I checked overall BTC has gone up in value over the last 5 years and by a large margin unless you bought at all time highs. The statement it lost value through inflation doesn't even make sense.

"Inflation Hedge" means you have an correlation with Inflation. Or in statistical terms, reason to believe that r-value is positive. (ie: if Inflation is +9%, then inflation-hedge is positive, or even close to +9%, though it could be +18% or whatever. If inflation is -5%, then an inflation-hedge should also be -5% or otherwise negative)

Anyone claiming "inflation hedge" needs to tell me how they calculated this correlation.

Re: Coinbase targets financially vulnerable young adults

#105

Post by dragontamer » Thu, Dec 14, 2023, 6:30 PM UTC

Geisterde wrote: post #103

dragontamer wrote: post #92

Earlier quoted context omitted.

> It is guarenteed to rise like everything else of limited supply They aren't making any more VHS copies of Toy Story, which IIRC was estimated to be ~21 Million copies of tape.

You are being pedantic, bitcoin has monetary qualities that put it in contention in this regard.

Okay.

* Zimbabwean dollars aren't being made anymore.

* Lunacoins / Terracoin isn't being made anymore.

Do these have any reason to go up? And they are (were) real currencies / cryptocoins.

Re: Coinbase targets financially vulnerable young adults

#106

Post by roenxi » Thu, Dec 14, 2023, 6:36 PM UTC

pkkm wrote: post #100

injeolmi_love wrote: post #33

Earlier quoted context omitted.

Crypto is not zero sum since new value is created.

How so? It's pretty easy to see how economic value can be created via stocks and bonds: they're basically indirect ways to give companies or governments money for investment. That money can then be used to hire more/better people, buy equipment, or build infrastructure, which will hopefully produce more value than it cost. What's the equivalent in cryptocurrency speculation or "yield farming"? Can you explain where t…

Providing a consistent-over-time and tamper-proof record of transfers. It is pretty obvious how that provides value; if you have a system that provides that and one that doesn't, we'd expect the first to be more valuable. We're also seeing the first asset in history which can't be reliably confiscated without the cooperation of its owner which is also worth a lot. Involuntary rules change mid-game by local authorities has been the cost of doing business for all of human history and it is quite exciting to see that change.

Also, if you're assumption is that all government regulation is automatically good then we don't have common ground on this one but ... most government regulation is destructive. The market for bitcoin is implicitly showing the enormous costs of financial regulation where it makes sense to burn absurd amounts of energy rather than get involved in the financial system. Shaking that off is likely to lead to better outcomes. Freer systems tend to prosper more than systems people don't want to be in.

Re: Coinbase targets financially vulnerable young adults

#107

Post by rsynnott » Thu, Dec 14, 2023, 6:37 PM UTC

> But regardless of how much crypto is being purchased, users are typically charged an additional "spread fee"of 0.5%.

... Wait, is this correct?! Why does anyone use this? Like, you can buy delicious bitcoins through normal brokers, these days, right? And those don't usually charge 0.5% for, well, just about anything.

> Purchasing crypto on Coinbase with a debit card triggers an additional fee of 3.99%. Funding your purchase with your bank account comes with a 1.49% fee.

... Eh?

This all seems so _wildly_ out of whack with conventional discount broker behaviour, it's hard to understand why anyone uses it if this is accurate.

Re: Coinbase targets financially vulnerable young adults

#108

Post by dragontamer » Thu, Dec 14, 2023, 6:43 PM UTC

datadata wrote: post #94

dragontamer wrote: post #32

Earlier quoted context omitted.

> and hedge against inflation is not one of them BTC lost value through the great inflation and is only gaining value today now that inflation is down to 3%. Sounds like a pretty bad hedge against inflation. People need to stop repeating this lie. EDIT: If people need an inflation hedge, buy i-bonds first, and then TIPS after you max out. These are indexed against CPI, so the more inflation happens the more i-bonds/T…

Inflation is a lagging indicator. Bitcoin gained in 2020 and early 2021 when debasement happened and the supply of money increased. That debasement takes time to show up in price data, and then even longer to show up in headline inflation, which is a 12 month average. TIPS and i-bonds are limited in their role as a hedge. Sure, you are exactly compensated for inflation on the capital you invest. However, without the…

It sounds like you're trying to tie BTC to the monetary supply. BTC goes up when M2 increases, and possibly goes down when M2 goes down?

So why is BTC going up when M2 is shrinking for the past 18+ months?

https://fred.stlouisfed.org/series/WM2NS

Re: Coinbase targets financially vulnerable young adults

#109

Post by dragontamer » Thu, Dec 14, 2023, 6:45 PM UTC

roenxi wrote: post #93

dragontamer wrote: post #32

Earlier quoted context omitted.

> and hedge against inflation is not one of them BTC lost value through the great inflation and is only gaining value today now that inflation is down to 3%. Sounds like a pretty bad hedge against inflation. People need to stop repeating this lie. EDIT: If people need an inflation hedge, buy i-bonds first, and then TIPS after you max out. These are indexed against CPI, so the more inflation happens the more i-bonds/T…

CPI has typically not been keeping pace with the amount of money creation afoot [0]; attempting to index against the CPI seems like a way to end up with low quality investments. IMO if an asset isn't comparable to the M2 it is quite questionable; I'd expect inflation hedges to act more like gold, on average showing "real" returns. Seems likely the time horizon you're talking about is too short in this case. The last…

> IMO if an asset isn't comparable to the M2 it is quite questionable;

M2 has shrunk for the last 18 months. Anything correlated to M2 would have similarly shrunk for the last 18 months... which is basically nothing being discussed in this topic.

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"Inflation Hedge" is traditionally CPI, maybe PCE if you're being fancy. There's a few other inflation indicators but they're all within a magnitude (and well correlated) to CPI / PCE.

Re: Coinbase targets financially vulnerable young adults

#110

Post by datadata » Thu, Dec 14, 2023, 6:54 PM UTC

dragontamer wrote: post #108

datadata wrote: post #94

Earlier quoted context omitted.

Inflation is a lagging indicator. Bitcoin gained in 2020 and early 2021 when debasement happened and the supply of money increased. That debasement takes time to show up in price data, and then even longer to show up in headline inflation, which is a 12 month average. TIPS and i-bonds are limited in their role as a hedge. Sure, you are exactly compensated for inflation on the capital you invest. However, without the…

It sounds like you're trying to tie BTC to the monetary supply. BTC goes up when M2 increases, and possibly goes down when M2 goes down? So why is BTC going up when M2 is shrinking for the past 18+ months? https://fred.stlouisfed.org/series/WM2NS

Not sure, it is just a correlation not an iron rule and definitely not the only influence. The shrinking here of m2 is much much smaller than the previous increase was as well.