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Algorithmic stablecoins are provably impossible without continuous funding

fragileequilibrium.substack.com

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Re: Algorithmic stablecoins are provably impossible without continuous funding

#21

Post by MuffinFlavored »

samsquire wrote: post #19

Let me share my theory that the economy is impossible or paradoxical and that the American dream is impossible and that everything is built on by faith. To buy a loaf of bread, the price needs to pay for the wheat, ovens, energy and the employee costs. This relationship is recursion. The staff of the bread company need to afford bread of their own and shelter and energy and transportation. Everyone is thereby support…

why do some people make it to the top then? why do some people make $40k/yr, some make $80k, some make $120k, some make $200k, some make $400k, some make $4m, some make $40m, some make $100m

Re: Algorithmic stablecoins are provably impossible without continuous funding

#22

Post by readthenotes1 »

samsquire wrote: post #19

Let me share my theory that the economy is impossible or paradoxical and that the American dream is impossible and that everything is built on by faith. To buy a loaf of bread, the price needs to pay for the wheat, ovens, energy and the employee costs. This relationship is recursion. The staff of the bread company need to afford bread of their own and shelter and energy and transportation. Everyone is thereby support…

I think that is the author's point, that a closed system makes it impossible. You need the wealth from outside sources to fund the debt to fund the spending. Also, at some point, there is some production that is not just shuffling existing assets around.

Re: Algorithmic stablecoins are provably impossible without continuous funding

#23

Post by MuffinFlavored »

jqpabc123 wrote: post #5

Analysis aside, common sense suggests that it is very difficult if not impossible to manufacture long term stability in any system based mostly on speculation with limited hard assets to back it up.

yet people still buy and hold into crypto daily, no?

Re: Algorithmic stablecoins are provably impossible without continuous funding

#24

Post by samsquire »

MuffinFlavored wrote: post #21
samsquire wrote: post #19

Let me share my theory that the economy is impossible or paradoxical and that the American dream is impossible and that everything is built on by faith. To buy a loaf of bread, the price needs to pay for the wheat, ovens, energy and the employee costs. This relationship is recursion. The staff of the bread company need to afford bread of their own and shelter and energy and transportation. Everyone is thereby support…

why do some people make it to the top then? why do some people make $40k/yr, some make $80k, some make $120k, some make $200k, some make $400k, some make $4m, some make $40m, some make $100m

For someone to earn high value numbers someone else has to be doing the grunt work, the work that allows that value to be unlocked.

These people are desperate and have no capital. Money is a time machine and if you have none of it you are forced into grunt labour.

You don't get 100 million working as a pizza delivery driver or delivering parcels but the owner sure does.

Re: Algorithmic stablecoins are provably impossible without continuous funding

#25

Post by truckerbill »

MuffinFlavored wrote: post #21
samsquire wrote: post #19

Let me share my theory that the economy is impossible or paradoxical and that the American dream is impossible and that everything is built on by faith. To buy a loaf of bread, the price needs to pay for the wheat, ovens, energy and the employee costs. This relationship is recursion. The staff of the bread company need to afford bread of their own and shelter and energy and transportation. Everyone is thereby support…

why do some people make it to the top then? why do some people make $40k/yr, some make $80k, some make $120k, some make $200k, some make $400k, some make $4m, some make $40m, some make $100m

The answer is usually luck

Re: Algorithmic stablecoins are provably impossible without continuous funding

#26

Post by alacritas0 »

samsquire wrote: post #19

Let me share my theory that the economy is impossible or paradoxical and that the American dream is impossible and that everything is built on by faith. To buy a loaf of bread, the price needs to pay for the wheat, ovens, energy and the employee costs. This relationship is recursion. The staff of the bread company need to afford bread of their own and shelter and energy and transportation. Everyone is thereby support…

The United States is a society of excess. Yet, we still let people starve and go unsheltered. There is an easy solution that doesn't have the unreasonable expectation of the poor relying on the goodness of other people: tax individuals with high incomes at higher rates. The marginal tax rate for the highest income earners has steadily fallen in the past decades. People with those high incomes have the least marginal utility on their income and should have a higher tax burden on the portion of their income which isn't necessary for their comfort.

This isn't to say that charitable giving is bad. If you are financially stable and have money to spare, please donate your time or money to those that need it. It just isn't the solution to a national problem.

Re: Algorithmic stablecoins are provably impossible without continuous funding

#27

Post by samsquire »

alacritas0 wrote: post #26
samsquire wrote: post #19

Let me share my theory that the economy is impossible or paradoxical and that the American dream is impossible and that everything is built on by faith. To buy a loaf of bread, the price needs to pay for the wheat, ovens, energy and the employee costs. This relationship is recursion. The staff of the bread company need to afford bread of their own and shelter and energy and transportation. Everyone is thereby support…

The United States is a society of excess. Yet, we still let people starve and go unsheltered. There is an easy solution that doesn't have the unreasonable expectation of the poor relying on the goodness of other people: tax individuals with high incomes at higher rates. The marginal tax rate for the highest income earners has steadily fallen in the past decades. People with those high incomes have the least marginal…

Those wealth creators go elsewhere or stop doing a business if isn't lucrative. I think they're called Laffer curves.

Tax more and people do less as it doesn't pay to do more labour and get less of it back.

Re: Algorithmic stablecoins are provably impossible without continuous funding

#28

Post by QuadrupleA »

samsquire wrote: post #19

Let me share my theory that the economy is impossible or paradoxical and that the American dream is impossible and that everything is built on by faith. To buy a loaf of bread, the price needs to pay for the wheat, ovens, energy and the employee costs. This relationship is recursion. The staff of the bread company need to afford bread of their own and shelter and energy and transportation. Everyone is thereby support…

I like to think of it simpler - if everyone in a society contributes something helpful, however it's organized / monetized - we all win.

Re: Algorithmic stablecoins are provably impossible without continuous funding

#29

Post by samsquire »

QuadrupleA wrote: post #28
samsquire wrote: post #19

Let me share my theory that the economy is impossible or paradoxical and that the American dream is impossible and that everything is built on by faith. To buy a loaf of bread, the price needs to pay for the wheat, ovens, energy and the employee costs. This relationship is recursion. The staff of the bread company need to afford bread of their own and shelter and energy and transportation. Everyone is thereby support…

I like to think of it simpler - if everyone in a society contributes something helpful, however it's organized / monetized - we all win.

I like staying in a city as I rely on all the people around me to pay towards the costs of garbage collection, water pumping, electricity distribution costs and supermarket logistics chains of getting food from factories to where I am.

Society requires everyone to produce more than they cost. The government invests in you in terms of free education and in some countries free healthcare.

Work is the resource that is renewable. Everyone is forced into a grind to raise enough to pay for everyone else's costs and your own due to the recursive relationship of costs.

Re: Algorithmic stablecoins are provably impossible without continuous funding

#30

Post by sterlind »

samsquire wrote: post #19

Let me share my theory that the economy is impossible or paradoxical and that the American dream is impossible and that everything is built on by faith. To buy a loaf of bread, the price needs to pay for the wheat, ovens, energy and the employee costs. This relationship is recursion. The staff of the bread company need to afford bread of their own and shelter and energy and transportation. Everyone is thereby support…

It's not recursion because the earth is not a closed system.

Farmers don't have to pay for the energy used to grow wheat. The Sun provides that for free. Same with the oxygen, and much of the water. Value is created, it's not a zero-sum game (except from the perspective of universal entropy.)

In a healthy economy, most of the value should be created rather than extracted from others. But ownership of fixed resources like land led to serfs and sharecroppers, which led to landlords and industrialists accumulating capital, which led to exploitation. That's Marx's whole thing.

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