131–140 of 331 posts
Worth adding >>> And in Silicon Valley, engineers and executives are bolting from cushy jobs in droves to join the crypto gold rush. No they do not. I am an engineer in a technology heavily used by crypto projects and they have a really hard time recruiting. Engineers slam the door in their face the moment you tell them the opening is for this industry.
"Crypto" to me is about cryptography, not cryptocurrencies. re: https://en.wikipedia.org/wiki/Crypto_naming_controversy and (of course) this: https://www.iacr.org/meetings/crypto/ I wish that lazy people did not overload this term.
The article (or, rather, the commentary in the link above on the article) talks about the fallacious notion of "market cap" in regards to cryptocurrencies. That is to say, e.g., multiplying the number of bitcoins in existence times the current market price is a silly metric because the entire market would never be able to cash-out at that maximum price. What I was wondering was: is there a better number? e.g., is the…
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In theory it sounds so logical! Is it though? Have you actually tried to apply this in practice to a trading strategy? I think once you start trying to predict prices based on NPV of future cash flows this quickly falls apart, even with large behemoths like Microsoft, Apple, etc...
I am not suggesting that you or I can compute the NPV of future cash flows and then value the share, certainly not easily. But that was not the point. The point was to distinguish shares (and other securities) from coins: the price of the former is (softly) constrained to be within the vicinity of their intrinsic value. Cryptos have zero intrinsic value.
I don't think it is right to call growth speculation "intrinsic value". The only thing that is truly intrinsic in my opinion is profits. But profits aren't a good way to measure value of an asset. Because the asset (stock in this case) is separate from the company itself. A company could generate slim profits and not grow each year. That has intrinsic value to the employees and customers. But that does little for the stock.
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Working for a crypto startup can be a negative on your resume/CV as well.
In the Hacker News bubble, working for anywhere is a negative on your CV. Amazon treats its warehouse employees badly, Google creates a surveillance state and bows to authoritarians, Facebook drives engagement with hate/dissent, AirBnB is causing a housing crisis by turning long term rentals into short term rentals, Apple has Chinese sweatshops, Netflix and Spotify run controversial content, Uber/Doordash/Lyft/Instac…
The others are regularly criticised to varying degrees, but that doesn’t mean it’s impossible to work there for people somewhat conscious of their conscience. It comes down to the question “can you honestly expect to have an impact on the organisation, or is it more likely to hollow you out and make you into another one of their cynical libertarian defenders?”
This happens to be exactly the same misunderstanding as calling all criticism “cancel culture”.
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I find a lot of DeFi projects to be very useful, but you have a logical fallacy - If I buy 1% of Apple stock at $100, and later it's worth $1000 based on the last trading price, money didn't change hands to make me have more USD, it's my paper wealth. If Bitcoin goes from $1 to $50k, and I never sell, I didn't take any money - the wealth simply grew.
The point is that holding Apple stock is a claim of ownership of the assets of Apple as well as the future income of Apple, either in the form of dividends or stock buybacks. The activity of Apple is economically meaningful; and the price of Apple stock reflects that.
Until someone has built a crypto product that creates values (for the purpose of this discussion it can be a good or a service would be willing to spend USD on even if it wasn't a crypto) crypto is a negative-sum game. Any USD taken out of the system someone else has to have put in, plus whatever the miners take out. Fortunes aren't created, they are redistributed.
I find a lot of DeFi projects to be very useful, but you have a logical fallacy - If I buy 1% of Apple stock at $100, and later it's worth $1000 based on the last trading price, money didn't change hands to make me have more USD, it's my paper wealth. If Bitcoin goes from $1 to $50k, and I never sell, I didn't take any money - the wealth simply grew.
The article (or, rather, the commentary in the link above on the article) talks about the fallacious notion of "market cap" in regards to cryptocurrencies. That is to say, e.g., multiplying the number of bitcoins in existence times the current market price is a silly metric because the entire market would never be able to cash-out at that maximum price. What I was wondering was: is there a better number? e.g., is the…
They purposefully take ungenerous interpretations of statements to build straw man arguments then accuse the article of making straw man arguments. They bring up studies and articles contradicting claims in the piece then dismiss the studies brought up in the piece as being ambiguous because they don't have more rigor. Often, the comments are nothing more than snide remarks deriding the claims without any citations while at the same time writing "citation needed" for various other parts of the article.
As I said, there are many fair points in this criticism but this critique, and other pieces like it, are, in my opinion, not really trying to pursue the truth, they're written to cater to an audience that wants to dismiss cryptocurrency outright.
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The market cap metric may seem silly to you, but it's the same metric used by publicly traded corporations. And there is nothing silly about it. All shareholders would never be able to cash out at the current share price, but this isn't a reason to disregard the market cap metric.
There’s a key difference: corporate shares have a value anchored in the company’s assets and revenue. The market cap can still fluctuate, of course, because different people will have different assessments of the future profitability but the floor is going to be based on the company’s assets, contracts and sales predictions, obligations, etc. In contrast, cryptocurrencies have no floor because there’s no inherent val…
And cryptocurrencies' intrinsic value is this: they are payment networks that work even where traditional systems fail. No denied transactions. No limits. No "account" to open. Works for the underbanked. Send money truly anytime anywhere. No other system does this. That's the value.
In the end, there is no fundamental difference between a service provided by a corporation vs a service provided by cryptocurrencies. Both services can and do have value.