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Crypto crash deepens, stocks slip

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Re: Crypto crash deepens, stocks slip

#231

Post by sashimi-houdini »

bronzeage wrote: post #192
jmacd wrote: post #11

As an outside observer, who has no crypto holdings at all, but is very deeply invested in the public stock market with a heavy weight on technology stocks... this doesn't look like a crash to me at all. It just looks like some steam being let off and old investors cash out and new investors get more comfortable with how much and where to invest. I consider crypto currency as it is to be an elaborate Ponzi scheme (per…

It's not a Ponzi scheme because in ponzi scheme you deliberately use late investors money to pay early investors. What happens in cryptocurrency is fake-exchange scheme. Tether is a fake currency printed in unlimited way by bitfinex which is also an exchange. By pretending tethers are real dollars you create the appearance of a stronger market for cryptocurrency than actually exists. It all rests on increasing the nu…

The term you're looking for is "naturally occurring Ponzi scheme"

https://openknowledge.worldbank.org/handle/10986/19358

Re: Crypto crash deepens, stocks slip

#232

Post by voldacar »

afavour wrote: post #183
voldacar wrote: post #81

Earlier quoted context omitted.

While you have a point regarding fixed supply, I think bitcoin is more than just a KBC. The ability to do uncensorable (or at least uncensorable without truly absurd computing power) global financial transactions is a really amazing thing and I think it definitely has "intrinsic" value, insofar as any value is "intrinsic" and not the result of social interaction. The energy consumption is definitely bothersome but ov…

Isn't Bitcoin absolutely terrible at transactions, though? It's too slow to ever be used as a cash alternative. Why wouldn't an alternative cryptocurrency fill that void then leave Bitcoin with no actual value at all?

My comment was more referring to cryptocurrency and the blockchain concept in general, I probably should have been more clear.

You are right that BTC isn't that useful as cash. I don't think BTC will be dominant forever, there are already superior cryptocurrencies for use as actual normal currency. If/when another crypto really does fill that void and achieves major adoption, I think BTC will probably retain some value, for speculative reasons and also just because it has the oldest chain.

Re: Crypto crash deepens, stocks slip

#233

Post by pilingual »

jmacd wrote: post #11

As an outside observer, who has no crypto holdings at all, but is very deeply invested in the public stock market with a heavy weight on technology stocks... this doesn't look like a crash to me at all. It just looks like some steam being let off and old investors cash out and new investors get more comfortable with how much and where to invest. I consider crypto currency as it is to be an elaborate Ponzi scheme (per…

Thank you for the disinterested take! It's refreshing to see this as a top comment when so often I see "Crypto makes me sick" which offers zero information and doesn't belong on HN.

A few points to the repetitive comments I keep seeing:

1. Bitcoin is not a Ponzi scheme. Various cryptocurrencies operate in such a manner, but Bitcoin and Ethereum have value propositions: settlement and programmable money respectively. Crucially, these projects are still in a growth phase. More projects are being built on Bitcoin (e.g. Avanti Bank) and Ethereum (e.g. Uniswap) and more institutions like Tesla, MassMutual, and Square have a position in it. Banking institutions are working on supporting Bitcoin.

2. Bitcoin pricing is on a log scale. Dropping to $36k from $50k is not a concern on this scale. If it drops below $10k, there might be some nervousness but Bitcoin's fluctuations have almost never deviated significantly in its 11 year history.

3. Bitcoin is not a currency. How do we know? You can't price the components of a Big Mac in Bitcoin. Again, it is in a growth phase which is what people like Taleb don't understand. When you can price a Big Mac in Bitcoin then maybe it is in some form a currency (not directly, but perhaps indirectly using Lightning or another L2).

4. A lot of smart people are invested in crypto: a16z, USV, Paradigm. These aren't greedy VCs -- it's their job to make returns for institutional investors who are often pension funds or charitable endowments, so if it a "Ponzi" then they are fools. I do not understand how every time cryptocurrency comes up armchair HN users come along and comment when they, very apparently, have almost no understanding of the topic. It's like coming in and starting to discuss how L1 cache works when you aren't a computer engineer or don't have an active day-to-day interest in the matter. Why waste people's time with your vacuous comments? It's like some kind of therapy. "Crypto sucks!" Reinforcing feel-good Circle-upvote is all it is.

Re: Crypto crash deepens, stocks slip

#234

Post by mumblemumble »

cheaprentalyeti wrote: post #168
mumblemumble wrote: post #100

Earlier quoted context omitted.

My rational take is that Bitcoin's carbon footprint is more-or-less a direct function of its price. The market forces are such that you can expect mining to expand until, on average, each miner's expected reward is only a little bit higher than their electricity bill and hardware costs. If prices come down, that is going to encourage some miners to take capacity offline, which is probably great for anyone who's inter…

And you think China's going to shut down their coal plants and dismantle the train tracks carrying coal there just because the price of bitcoin drops? Or are they just going to use the pollution for something else?

Market forces affect the energy industry as well. They aren't burning coal for fun; they're burning it to make money and/or satisfy a demand. If electricity consumption drops, then plants will produce less electricity, and construction of new plants will slow down or stop.

Re: Crypto crash deepens, stocks slip

#235

Post by usrusr »

arcticbull wrote: post #174
inter_netuser wrote: post #112

Earlier quoted context omitted.

That's because Bitcoin is very tightly held, and the amount of tradeable float is very very small compared to holdings. This results in outsized volatility, as it is still a developing market. 1T for a global currency is very small. We'll see how it behaves at 10T.

> That's because Bitcoin is very tightly held, and the amount of tradeable float is very very small compared to holdings. By the diamond-est of hands: those who lost their keys.

Which effectively make the total amount of live tokens (the rough equivalent of share count or money supply in stocks or currencies) more deflatory than useful for any application outside of pyramid games. All projections of market cap that include the dead tokens are even more worthless than other market cap projections.

Problem is: there's no way to tell the dead from the merely sleeping. The bigger the share of dark addresses, the bigger the impact of some "old god" dark address lighting up again. And the longer a "darkening deflation" goes on, the higher the impact of some old darknes wake-up would be.

Re: Crypto crash deepens, stocks slip

#236

Post by AnIdiotOnTheNet »

cheaprentalyeti wrote: post #168
mumblemumble wrote: post #100

Earlier quoted context omitted.

My rational take is that Bitcoin's carbon footprint is more-or-less a direct function of its price. The market forces are such that you can expect mining to expand until, on average, each miner's expected reward is only a little bit higher than their electricity bill and hardware costs. If prices come down, that is going to encourage some miners to take capacity offline, which is probably great for anyone who's inter…

And you think China's going to shut down their coal plants and dismantle the train tracks carrying coal there just because the price of bitcoin drops? Or are they just going to use the pollution for something else?

So they use their pollution for something else, as opposed to using it for that and mining BTC. Still a net-win.

Re: Crypto crash deepens, stocks slip

#237

Post by twic »

lanstin wrote: post #122
fny wrote: post #41

Earlier quoted context omitted.

Gold does not have inherent value either. It's price is determined purely by a market and there are no other pricing mechanisms. You can't use discounted cash flow. You can't use comparables. You can use raw materials. It's a straight up rock that people price.

Only in the same sense that nothing has inherent value. Gold is pretty and durable and people like it. That gives it value in the system of exchanging stuff amongst humans.

Wheat has value because you can eat it. Dollars have value because you can pay your taxes in them.

Gold does have craft and industrial uses, but not enough to explain its value.

Re: Crypto crash deepens, stocks slip

#238

Post by fsagx »

jasonlaramburu wrote: post #155
jmacd wrote: post #11

As an outside observer, who has no crypto holdings at all, but is very deeply invested in the public stock market with a heavy weight on technology stocks... this doesn't look like a crash to me at all. It just looks like some steam being let off and old investors cash out and new investors get more comfortable with how much and where to invest. I consider crypto currency as it is to be an elaborate Ponzi scheme (per…

I wonder what % of our Economic stimulus was used to buy crypto, and how much of that money has simply disappeared over the past 24 hours.

Does it matter? The economic stimulus money "simply appeared" when checks were printed or payments were direct deposited.

Re: Crypto crash deepens, stocks slip

#239

Post by sumedh »

paulpauper wrote: post #225
sumedh wrote: post #210

Earlier quoted context omitted.

Why not have 5% or less in BTC, if it does well, good for you, if it does not, its just 5% of your portfolio.

by that logic, why not just buy lotto tickets?

The probability of BTC going to zero is very very low, the probability of you not winning the lotto is very very high.

Re: Crypto crash deepens, stocks slip

#240

Post by sashimi-houdini »

ericwooley wrote: post #182
jmacd wrote: post #11

As an outside observer, who has no crypto holdings at all, but is very deeply invested in the public stock market with a heavy weight on technology stocks... this doesn't look like a crash to me at all. It just looks like some steam being let off and old investors cash out and new investors get more comfortable with how much and where to invest. I consider crypto currency as it is to be an elaborate Ponzi scheme (per…

Read up on what a ponzi scheme actually is. https://www.investopedia.com/terms/p/ponzischeme.asp#:~:text... . I'm so tired of people saying crypto is a ponzi scheme. Maybe you think it's nonsense, or a bad investment, but it is not a ponzi scheme. > A Ponzi scheme is an investment fraud in which clients are promised a large profit at little to no risk. Companies that engage in a Ponzi scheme focus all of their energy…

Naturally occurring Ponzi scheme is the term of art:

https://openknowledge.worldbank.org/handle/10986/19358

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