S&P Dow Jones Indices to launch cryptocurrency indexes in 2021 • Hacker News Board

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#361

Post by x87678r » Thu, Dec 03, 2020, 9:41 PM UTC

JxLS-cpgbe0 wrote: post #123

x87678r wrote: post #111

Earlier quoted context omitted.

I dont understand it either. To me yes BTC supply is limited, but there are lots of cryptos so BTC is nothing special. The secret could be if lots of important and smart people are invested in BTC you have to trust that it will keep being special, and better than other cryptos. It sounds sketchy to me, but the network effect is real so there might be something in it. It seems lots of well known financial people are g…

> It seems like a ponzi to me A Ponzi Scheme relies on a central authority, BTC by definition has none. Maybe you were trying to say "market manipulation" or "securities fraud?"

No definitely ponzi. Maybe a central authority is in the definition for ponzi, but I think this is exactly Ponzi without a CA. The whole thing isn't fraud or manipulation because again there is no one single owner, though looking at all the junk on social media there is definitely lots of both.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#362

Post by vladimirralev » Thu, Dec 03, 2020, 9:42 PM UTC

wsc981 wrote: post #126

iamspoilt wrote: post #30

Someone please explain this to me: How is any cryptocurrency even considered an investment vehicle? I would classify myself as Boglehead and I believe in the fundamentals of investing in stocks because in all it's technicality (and given the buy-and-hold strategy), you are investing in a business by owning a part of it which naturally means that you will and do get the returns on it, both in terms of profits (dividen…

I see Bitcoin as a hedge against the USD and EUR as I feel the currencies will be in trouble in the coming years. I see Bitcoin as a store of value. Keeping some of my assets in Bitcoin keeps some of my assets out of the hands of governments and banks and will not be affected by devaluation. There's no risk of a bail-in [0] for example. I don't invest all my assets in Bitcoin, currently perhaps 10% of my net worth. I…

I have a lot of respect for Raul Pal, but when he talks about crypto you start to see his limits in understanding. He still thinks governments can't ban crypto if they wanted, he is very wrong about that. He also thinks that governments would allow a crypto to rival a state currency.

The most likely success story for crypto is it will be only for banks while regular people will be banned from owning it. There is simply no way a government will allow irreversibly hackable assets in the wild. There are no limits to the damage entities can do with anonymous GDP-scale wealth.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#363

Post by misnamed » Thu, Dec 03, 2020, 9:42 PM UTC

okokok___ wrote: post #153

misnamed wrote: post #115

Earlier quoted context omitted.

Sure, not always. To clarify: I mean stocks are shares in companies, which generally generate profits. Yes, some companies may not, or may even go under, but none of this is an issue if you hold a diversified set of stock and bond indexes for the long haul (I'm talking about equities as an asset class, not any one stock). Stocks are stakes in companies - bonds pay a risk premium - crypto, gold, etc... don't generate…

>bonds pay a risk premium - crypto, gold, etc... don't generate income, which by definition makes them speculative. What about staking? In this case, you're providing a service to the network and being compensated for it.

I know what it means but have no idea how profitable it is or whether those profits are guaranteed or fleeting. Best I can tell it's like any service (business, not investment): depending on demand and competition, you can make money for a time, then stop at some point. So far that has never been an issue for people investing in the global stock market (i.e. the global stock market persists even as individual stocks, sectors, industries, even whole countries have crashed in the past).

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#364

Post by sneak » Thu, Dec 03, 2020, 9:44 PM UTC

andrewmcwatters wrote: post #338

colejohnson66 wrote: post #334

Earlier quoted context omitted.

> I’m enjoying sitting on the sidelines and watching people “invest” in a digital “currency” that you cannot spend, does not produce cash flow, and whose values are determined by other shmucks buying it from previous shmucks. Is that any different than a stock though? You can’t spend stocks, they don’t produce cash flow (ignoring dividends), and their value is what other’s are buying and selling it for. Just as I can…

If I buy a company, I literally can choose what to do with its earnings. That’s the point of valuing businesses. You’re not buying the stock. You’re buying a portion of the business. Say you have a drywall company in town. You and the owner are good friends and the owner wants to retire but doesn’t have a family member who is interested in the enterprise. He seeks out buyers. You mention to him you’re interested but…

> If I buy a company, I literally can choose what to do with its earnings. That’s the point of valuing businesses. You’re not buying the stock. You’re buying a portion of the business.

I used to think that, but then I saw what happened to TSLA this year. I don't think that these markets are as different as you think they are.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#365

Post by hiimtroymclure » Thu, Dec 03, 2020, 9:45 PM UTC

FridgeSeal wrote: post #357

centimeter wrote: post #316

Earlier quoted context omitted.

> that you cannot spend, You can spend it. > does not produce cash flow, Neither commodities nor currencies produce cash flow. People still reasonably invest in both. > and whose values are determined by other shmucks buying it from previous shmucks. The value of every other asset in existence is also determined by this process.

Bought any coffees (in person) with the crypto-currency of the week recently?

haha yeah I wasn't able to buy my coffee this morning with my gold bar so I threw it away. worthless metal amirite

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#366

Post by andrewmcwatters » Thu, Dec 03, 2020, 9:45 PM UTC

vmception wrote: post #341

andrewmcwatters wrote: post #332

Earlier quoted context omitted.

I don’t know what you’re getting at. It would be like trying to better understand the microeconomic factors behind Beanie Babies. It’s an exercise in futility. They’re toys and they ended up being resold at prices that made no sense to the common man. Of all the endless knowledge that humanity produces, you have to ask yourself whether or not there’s meaning in pursuing topics endlessly. They’re flowers. This isn’t a…

> This isn’t a discussion about some ECON 500-level course topic. It is. > There’s an academic argument to be had about whether or not the accounts of the event are credible, but that’s not what we’re talking about here. It is. You brought it up. You threw in conjecture. And every rebuttal is more complex than you decided to be willing to pursue. That doesn't become false by saying we aren't talking about something t…

Yeah, I’m ignorant and flowers can be planted by anyone, so great conversation. If you really want to have discussions with people maybe try not to focus on meaningless pedantry.

Your side of the argument is ad hominem. I’m ignorant. OK, great, what’s your point? I should rethink tulips. Why?

You don’t actually make an argument yourself; sure I spouted off some things I think are generally bad because my statements imply you’re not going to find long-term returns from that type of “investing,” but are you not also spouting off some points of your own?

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#367

Post by phkahler » Thu, Dec 03, 2020, 9:46 PM UTC

single_source wrote: post #330

Mc_Big_G wrote: post #129

Earlier quoted context omitted.

Anyone can create a Craigslist clone, but somehow they still make 100s of millions of dollars per year.

Yep, this is what people are not understanding. Too many engineers and not enough business owners on HN. The hardest part of starting a business is getting the network effects on your side, it isn't the tech.

Sure, but then why have a market for hundreds of coins? We dont have a public market for all the craigslist wannabes because they are not relevant at that level.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#368

Post by sneak » Thu, Dec 03, 2020, 9:47 PM UTC

Zamicol wrote: post #210

spir wrote: post #145

Earlier quoted context omitted.

One answer to this question is that Ethereum will soon become a "real investment" because fees will accrue to ETH holders and the huge expense of electricity-intensive proof of work mining will be discontinued forever. Here is how it'll work - in 2021, an improvement to the Ethereum network known as EIP-1559 will launch, causing a portion of all new transaction fees to be burned/destroyed, which is effectively a "sto…

>How is any cryptocurrency even considered an investment vehicle? [...] [Y]ou are investing in a business by owning a part of it which naturally means that you will and do get the returns on it[.] That is how Ethereum works. Validators get returns from Ethereum by holding shares, i.e. ETH. Validators, after EIP-1559, will be paid with newly minted ETH and anything over the base burn fee. (Currently there is no mandat…

That headline, as written, is a real missed opportunity.

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#369

Post by misnamed » Thu, Dec 03, 2020, 9:48 PM UTC

jamesmehaffey wrote: post #269

misnamed wrote: post #137

Earlier quoted context omitted.

I mean if you're literally talking about the difference between 'buying physical servers' and 'buying Bitcoin' ... well, it seems to me you're missing out on a range of other options, like: investing in companies developing new hardware, for starters. Personally, I just lease what I need at going rates, which get ever cheaper. And by cheaper I mean: in dollar terms - so to keep up with that, I don't see the need to h…

Bitcoin is probably not the best case study for this aspect of the conversation, but I suppose you have a fair enough point. Although to be clear, I am thinking of the assets more like commodities than speculative stocks or equities. I do not mean to suggest that traditional servers are going to go away or become obsolete any time soon, but after you get past the cryptocurrency hype in the headlines there really is a…

My main issue is conflating the potential for an approach to technology with something like, say, Bitcoin specifically. Yes, many blockchain applications exist, but that doesn't translate into profits from investing in cryptocurrencies.

I've always liked the saying 'sell pickaxes to the miners' - rather than investing in the virtual gold, why not sell things to those who want to go find it? The real winners will likely be the companies who facilitate things (much like active trading platforms make money while the options traders on them often lose money overall).

Re: S&P Dow Jones Indices to launch cryptocurrency indexes in 2021

#370

Post by sneak » Thu, Dec 03, 2020, 9:49 PM UTC

puranjay wrote: post #166

mlerner wrote: post #155

Earlier quoted context omitted.

The claim about people with "A+ credentials" not working in crypto is off base. Look at the founders of crypto companies from top-tier VCs like a16z: https://a16z.com/crypto/#vertical-landing-portfolio

I should have been more clear: new crypto projects rarely have pedigreed founders anymore.

Rarely, yes, but there are some. I also think you could say "new startups rarely have pedigreed founders". Like any business class, most new entrants try and fail.

I like a long tail, because it means there's a better correlation of profit and skill in being able to (sometimes) predict a company's future. When everything is a bit safer across the board, you can't convert wisdom into money at quite the same rate.