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Calling All Hackers: How money works (2024)

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Re: Calling All Hackers: How money works (2024)

#21

Post by Imustaskforhelp »

staplers wrote: post #14
Imustaskforhelp wrote: post #10

Earlier quoted context omitted.

I recently discovered narrow banking ( https://www.narrowbanking.org/ ) which basically states the idea of narrow banking which can only make it so that the bank doesn't have the issues with fractional reserve banking if you are worried about it Stablecoins feel the most practical way I suppose for narrow banking although there is this UK bank and this Danish bank as well which are the two examples of narrow banking.…

There already are some gold pegged stablecoins Which require blind faith in reserve numbers.

I wouldn't call it blind faith similar to how it isn't blind faith to get usd stable coins

I think paxos and xaut have audits etc. from what I know/ I have heard.

Although having more audits is always a neat idea but I was just proposing that there are ways to invest in things like gold and have things like liquid gold perhaps via stablecoin or some other means too basically allowing you to instantly sell gold and gold is a pretty good hedge against stablecoin imo.

I actually once wrote about this idea of narrow banking discovering it accidentally where I wanted a bank which could invest in treasury bonds for inflation protected money or gold.

https://gist.github.com/SerJaimeLannister/c3db4eb84da96decfc...

Re: Calling All Hackers: How money works (2024)

#22

Post by stong1 »

nerdsniper wrote: post #7
willparks wrote: post #5

> A common lament among founders, even successful ones, is: "Sometimes I feel like I'm wasting my twenties". Interesting perspective, I feel like I see this much more attributed to someone working on a meaningless problem for a paycheck at a large company. I guess it speaks to the difficulty in finding purpose in any endeavor in your twenties. Nice conclusion on what to truly value.

It's basically a tradeoff between wasting your personal life or wasting your professional life. If you get a job that is truly 9-5 (or maybe even a bit less), it leaves a lot of time for forging friendships and relationships and learning hobbies while you're still young, doing sports, seeing the world. Founders usually feel they're missing out on all or most of these. And some of them probably feel like they don't re…

Well said. To expand on what you wrote, I like to think of there being three components (axes) to activities: fun, value, and meaning.

Fun is you enjoy doing it. Playing video games and watching TV is fun.

Valuable is it makes money. Importantly, it's what other people are willing to pay you money for, not what you think is important or even good.

Meaningful is it's spiritually enriching. These are things you would regret not doing on your deathbed. Spending time with your family or going to church are common examples of things that are meaningful to people (and potentially fun). This one is defined based on one's internal compass and varies significantly from person to person.

You can come up with activities that are pure fun, value, or meaning. Measuring activities against these three axes has been a valuable mental model for my time management and life design.

There's jobs that are fun and meaningful, but don't pay much. This is like charity work or passion tax industries such as game dev, music, or art.

There's also jobs that are fun and valuable, but are meaningless. Working at a trading firm/hedge fund is a common example (though some people may find that it's all three or only one). Another example is being a successful startup founder working on the wrong problem.

Finally, there are jobs that are valuable and meaningful, but maybe not all that fun. To me, this is what being a startup founder (working on the right problems) or how I imagine a professional athlete is like.

The grand slam would be having all three, but in my experience these are exceptionally rare. If it's fun and meaningful, everyone wants to do it, and supply and demand pushes the value down. Most of these cases are due to unusual personalities that let one find fun or meaning in activities others don't. This ties into the common startup advice of paying attention to "founder-problem fit" and "what are your unfair advantages".

Re: Calling All Hackers: How money works (2024)

#23

Post by nialv7 »

This smells a lot like a hacker thought because they are exceptional in one field (cybersecurity), they therefore are exceptional in all fields. The result is that information presented in this article is very surface-level, and quite biased.

Re: Calling All Hackers: How money works (2024)

#24

Post by Aunche »

huijzer wrote: post #6

How money works? Well look into fractional reserve banking and do the math. If you’re a bank, you can just loan out 10-100 times what you have in assets and ask say 5% interest. Then 5*10 to 5*100 is your annual interest to the bank. That’s why the Bible and Quran are against usury.

> That’s why the Bible and Quran are against usury.

That's why Christian and Muslim (to a lesser extent since they exploited loopholes) nations relied on Jewish financiers. It does not make sense for the exchange of good and services among one another to be held back because someone deciding to sit on a pile of tokens.

Re: Calling All Hackers: How money works (2024)

#25

Post by littlestymaar »

Imustaskforhelp wrote: post #10
huijzer wrote: post #6

How money works? Well look into fractional reserve banking and do the math. If you’re a bank, you can just loan out 10-100 times what you have in assets and ask say 5% interest. Then 5*10 to 5*100 is your annual interest to the bank. That’s why the Bible and Quran are against usury.

I recently discovered narrow banking ( https://www.narrowbanking.org/ ) which basically states the idea of narrow banking which can only make it so that the bank doesn't have the issues with fractional reserve banking if you are worried about it Stablecoins feel the most practical way I suppose for narrow banking although there is this UK bank and this Danish bank as well which are the two examples of narrow banking.…

> here already are some gold pegged stablecoins

Something backed by a volatile asset isn't, by definition, a stablecoin, though.

Re: Calling All Hackers: How money works (2024)

#26

Post by littlestymaar »

staplers wrote: post #11
jbs789 wrote: post #8

Earlier quoted context omitted.

This is not correct. For starters, loans are assets. Banks start with some capital, borrow in the form of deposits, and lend in the form of bonds, mortgages etc. The regulatory capital ratio determines how much capital they must hold to support the assets.

Loans are assets -1 = 1 And people wonder why finite natural resources skyrocket in value.

For every debt there's a debtor and a debtee. For the first debt is a liability, while it's an asset for the second.

Re: Calling All Hackers: How money works (2024)

#27

Post by mothballed »

dghlsakjg wrote: post #16
huijzer wrote: post #6

How money works? Well look into fractional reserve banking and do the math. If you’re a bank, you can just loan out 10-100 times what you have in assets and ask say 5% interest. Then 5*10 to 5*100 is your annual interest to the bank. That’s why the Bible and Quran are against usury.

That’s not how banking works. Banks cannot lend “10–100× their assets.” Loans are assets. Deposits are liabilities. What limits lending is capital, not reserves, and leverage is tightly regulated at roughly 10× equity, not 100×. The interest math is wrong too. Banks pay interest on deposits, absorb defaults, cover operating costs, hold capital, and meet liquidity rules. Net margins are about 1–3%, not 50–500%. Fracti…

It can be difficult to figure out whether the theoretical limit is 10x or 100x in my mind because there isn't a reserve ratio federally (well, there is one, but it's zero) , and the other regulations surrounding that aren't so cleanly understood in a neat formula.

Re: Calling All Hackers: How money works (2024)

#28

Post by m463 »

nialv7 wrote: post #23

This smells a lot like a hacker thought because they are exceptional in one field (cybersecurity), they therefore are exceptional in all fields. The result is that information presented in this article is very surface-level, and quite biased.

As a much better alternative, I would recommend "debt" by david graeber, which is amazing.

Re: Calling All Hackers: How money works (2024)

#29

Post by mothballed »

Imustaskforhelp wrote: post #10
huijzer wrote: post #6

How money works? Well look into fractional reserve banking and do the math. If you’re a bank, you can just loan out 10-100 times what you have in assets and ask say 5% interest. Then 5*10 to 5*100 is your annual interest to the bank. That’s why the Bible and Quran are against usury.

I recently discovered narrow banking ( https://www.narrowbanking.org/ ) which basically states the idea of narrow banking which can only make it so that the bank doesn't have the issues with fractional reserve banking if you are worried about it Stablecoins feel the most practical way I suppose for narrow banking although there is this UK bank and this Danish bank as well which are the two examples of narrow banking.…

Narrow banking was denied a depositor account at the fed IIRC so it's basically DOA as they've envisioned it.

IIRC the fed said that narrow banking threatens the stability of the banking system since private credit expansion (and ultimately, the risks that come with that) is in their estimation desirable. Regulators want nothing but to crush the idea.

Re: Calling All Hackers: How money works (2024)

#30

Post by jackdecker »

stong1 wrote: post #22
nerdsniper wrote: post #7

Earlier quoted context omitted.

It's basically a tradeoff between wasting your personal life or wasting your professional life. If you get a job that is truly 9-5 (or maybe even a bit less), it leaves a lot of time for forging friendships and relationships and learning hobbies while you're still young, doing sports, seeing the world. Founders usually feel they're missing out on all or most of these. And some of them probably feel like they don't re…

Well said. To expand on what you wrote, I like to think of there being three components (axes) to activities: fun, value, and meaning. Fun is you enjoy doing it. Playing video games and watching TV is fun. Valuable is it makes money. Importantly, it's what other people are willing to pay you money for, not what you think is important or even good. Meaningful is it's spiritually enriching. These are things you would r…

Really enjoyed the way you put this - I’m going to use these axes going forward as I’ve had a hard time putting words to these
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