141–150 of 331 posts
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.
How is it negative sum, and not just zero sum?
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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.
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>The point is to build an open monetary system A structurally impossible goal when it is deflationary in nature.
Why's that?
Bitcoin is a deflationary currency (for now)
"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.
You mean like how you just used the programming definition of "overload" that you won't find in the dictionary?
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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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.
The activity on Ethereum is economically meaningful, whether you believe it is or not. And let's be honest, Netflix or Facebook could disappear off the face of the earth tomorrow and productivity would arguably increase, so is that a negative sum game?
What is people extracting from the Ethereum ecosystem that isn't USD?
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…
Overall, I enjoyed the analysis of the piece, but I disagree with their take on market cap. Amy Castor - "Yeah, market cap is a meaningless number. It assumes everyone bought at the current price and could cash out at the current price." We could just as easily apply that basic logic to any security. Amazon(AMZN) is ~3275 a share with a market cap of ~1.668T. That also assumes everyone could cash out at ~3275, but th…
AMZN is a single ticker, there’s several orders of magnitude more liquidity in equities alone than all cryptocurrency combined. $34B of SPY shares traded today, and that’s a single ETF.
> That also assumes everyone could cash out at ~3275, but the reality is if selling pressure is higher than the buy side demand that selling shares will drive the price down as buyers would be able to continually bid lower. Eventually it would reach ~0 share price and effectively a 0 market cap.
This is wildly inaccurate.
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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.
Why are you comparing a currency with a stock? What is the claim of ownership for USD for example?
Many of the points brought up are completely valid but they're also heavily biased and often lack critical examination. Meaning, they take a stance of skeptic to the article but don't use the same bar for themselves. 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…
Who knows if the larger cryptocurrencies will still be around in 10 years time due to those criticisms or will they just adapt and fit in to better use cases? I also dislike the hype around NFTs as them being a marketplace for JPEGs but not all of them are like this. Perhaps 90% of NFTs will crumble with only 10% of them still being around that have a use case.
Due to a few of them having some utility, I certainly won't dismiss the whole thing or the technologies behind them. Otherwise we will see yet another HN crypto post with the same comments and dismissals attached to them.
I expect for them to easily ignore it since they are convinced it will completely collapse in the future. I'm not sure why they find it very difficult to do this but even I also think the majority of the hype will collapse too due to regulations, but the technologies (including blockchain) will still live on.
Earlier quoted context omitted.
Overall, I enjoyed the analysis of the piece, but I disagree with their take on market cap. Amy Castor - "Yeah, market cap is a meaningless number. It assumes everyone bought at the current price and could cash out at the current price." We could just as easily apply that basic logic to any security. Amazon(AMZN) is ~3275 a share with a market cap of ~1.668T. That also assumes everyone could cash out at ~3275, but th…
> Eventually it would reach ~0 share price and effectively a 0 market cap. This is the misunderstanding breaking your argument: AMZN shares are fractional ownership of a company with assets and ongoing revenue. In the event of a business downturn, those will go down but they’re not going to zero in any plausible scenario - even bankruptcies usually return some fraction of value to shareholders. This is important to u…
Amazon is big and the chances it goes to 0 are less than a company still making vcrs. The same can be applied to bitcoin.
Government and other contracts could be cancelled. The value of assets can be lower the debt. Bitcoin has no debt while a company like Amazon can have billions of dollars of debt.