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Crypto in 2026: Oh, This Is the Bad Place

stephendiehl.com

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Re: Crypto in 2026: Oh, This Is the Bad Place

#331

Post by bunderbunder »

toenail wrote: post #254
bunderbunder wrote: post #240

Earlier quoted context omitted.

Though, there’s a part of me thinking that the basic idea of creating artificial scarcity for profit is hard to separate from scamminess. It’s giving De Beers.

The entertainment industry tried for decades to achieve artificial scarcity for profit. All scammers?

I do think there’s a difference between charging a price and creating artificial scarcity.

This isn’t to say that the entertainment industry hasn’t pulled some awful shenanigans. But they’re generally willing to sell to as many people as are willing to pay the price they set. For the most part they haven’t tried to place hard limits on how many total people are allowed to watch a movie and control it with some sort of limited edition resellable token. That was an innovation of the NFT folks.

Re: Crypto in 2026: Oh, This Is the Bad Place

#332

Post by l23k4 »

nytesky wrote: post #262
l23k4 wrote: post #184

Earlier quoted context omitted.

I'd argue that the poor capitalization was a core part of wildcat banking, that's not really the case here.

Is that a tongue in cheek reference to my inadvertently weird capitalization of wildcat as WildCat — no idea why I did that, maybe a throwback to my ThunderCats fandom of my youth. Maybe lack of capital is a factor, but doesn’t that only come into play if redemptions are large? If it acts as a currency in circulation, there can be very little actual capital backing it (like how fractional reserves work for regular ba…

>Is that a tongue in cheek reference to my inadvertently weird capitalization of wildcat as WildCat — no idea why I did that, maybe a throwback to my ThunderCats fandom of my youth.

No, but that's hilarious. Good catch!

I don't think "wildcat banking" would be known as that if the banks hadn't been poorly capitalized (as in, they didn't have the money). If the banks had actually worked out, we'd just be calling it "banking".

Today, stablecoins have a hilariously simple way to print money: just buy treasuries, money market funds, or whatever. We're not necessarily going to see them collapsing due to poor capitalization.

Re: Crypto in 2026: Oh, This Is the Bad Place

#333

Post by HWR_14 »

altmanaltman wrote: post #98
thrownawaysz wrote: post #2

>Meet Mike. Mike is a college freshman who is exposed to crypto through social media. He downloads Coinbase, buys ten dollars of CumRocket because his friend group is in on it, watches the price move, and feels for the first time the dopamine rush of gambling on non-economic random walks. By his sophomore year he is onto harder drugs: 0DTE options on triple-leveraged single-stock ETFs he does not understand, traded o…

Yeah like why is Mike thinking he is investing if he is betting on a literal sportsbook? That is delusion and has nothing to do with crypto. I am not pro crypto but the logic here doesn't make a lot of sense. You can say buying crypto is like gambling sure but it literally is not. It's investing in an extremely risky asset that can go to 0. But it is very different than placing a bit on Kalshi or a sportsbook. I actu…

> why is Mike thinking he is investing if he is betting on a literal sportsbook?

But he's not, that's a big issue. If you download DraftKings, it's obvious you are gambling. If you download Robin Hood, and buy shares of Apple, it's obvious you are investing. If you then open Robin Hood and trade oil futures? 0 DTE options? What about when the same app shows you US commodities markets where they are binary options on if the US FIFA team make it to the round of 16?

Re: Crypto in 2026: Oh, This Is the Bad Place

#337

Post by l23k4 »

graemep wrote: post #218
l23k4 wrote: post #191

Earlier quoted context omitted.

I suggest you go outside sometimes, you'll see that the real world looks rather different than whatever crypto-obsessed bubble you live in. I really don't think I need to explain the obvious difference between physical US dollar notes and USDT. I'll point out that in most of the world a $100 note is only worth $100 if it's in basically mint condition, the value falls rapidly as condition degrades.

What? I have never come across that. No problem with notes in many currencies with folds a creases, even small tears.. In my experience bank notes last for ever anyway. I have various notes from countries I have travelled to decades ago in good condition.

If you're going to Paris? Sure, as long as the amounts are relatively small. Try paying with pre 2009 100USD bills in Africa lol.

Even banks struggle with this https://meduza.io/en/feature/2025/05/30/old-money-new-proble...

Goes to show how viable cash is as a store of value for most of the world.

Re: Crypto in 2026: Oh, This Is the Bad Place

#338

Post by sanex »

ac29 wrote: post #263
sanex wrote: post #161

Earlier quoted context omitted.

You're entirely wrong about that. A bitcoin transaction costs me pennies a wire transfer costs me $40.

Most real financial transactions need to start and end in fiat though, and that's where the costs are

That depends though. I recently bought a car in south America and they were willing to take USDT through Bianance Pay. As a US person I don't have access to that so ended up having to wire transfer. I don't know why they wouldn't accept a Bitcoin deposit which they could have easily converted to tether but I suspect it's just a momentum and learning curve thing.

Re: Crypto in 2026: Oh, This Is the Bad Place

#339

Post by pjc50 »

__MatrixMan__ wrote: post #269
alehrs wrote: post #50

I've been deep into crypto for years and I was a big stablecoin supporter. I was fascinated by the tech and I still am. But everything outside the tech itself is just trash, scams, and gambling. I've come to believe that "pure" decentralization is neither practical nor particularly convenient. The only real use case that makes sense to me is giving people in developing countries access to a stable currency they can a…

Crypto was initially interesting to me because scarcity based economics is failing us and crypto give us a way to explore alternatives. But so far, nearly everything we've built with it has just been a clone of some scarcity-based thing that already exists outside of crypto. Since then I've come to the conclusion that it's never worthwhile to buy crypto with fiat. Any scheme which asks that of its users creates too m…

> scarcity based economics is failing us and crypto give us a way to explore alternatives

The entire field of crypto was an attempt to create scarcity where none existed, by turning scarce electricity into special numbers.

Re: Crypto in 2026: Oh, This Is the Bad Place

#340

Post by win311fwg »

__MatrixMan__ wrote: post #303
bigfishrunning wrote: post #275

Earlier quoted context omitted.

Isn't the whole point of an economy a method of resolving scarcity? Money is a proxy for participation; it keeps me from having to agree to paint the miller's fence in exchange for some flour.

That's the perspective that our current systems are based on. And back when the majority of the problems that people were up against had to do with there being not enough of something to go around--when it took half of us working in the fields just to feed the rest of us--then the system worked relatively well. 9 times out of 10, when somebody got a loan (which is the event that injects dollars into the system) it ha…

> When I accept some abstraction from my employer in exchange for my labor

That abstraction is simple debt. Your employer is, in exchange for what you've given them, promising to return to you something of value (food, shelter, entertainment, etc.) in the future. Money is the account of the promise made. The alternative is to forgo the debt and trade something of equal value at the time of the transaction. However, any negative externalities associated with you choosing what item of value you want to trade for exists whether you demand it immediately or defer acceptance until some time in the future. Trying to find a new way to practice accounting isn't going to change anything.

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