431–440 of 532 posts
Earlier quoted context omitted.
Wow. I just learned that all the toyally legit things I've done with Bitcoin are all illegal.
You can use a helicopter to commute to work. It's just not a very rational thing for most people to do.
I recently watched some traditional cable and was shocked by the number of crypto ads bombarding viewers. I have to imagine that this market was goosed up by retail investors trading on coinbase and binance just as the e-betting market was. The only difference between crypto and e-betting is that everyone got to be a winner on the crypto markets for a while. As users lose out, and exchanges stop ad campaigns - how lo…
> Crypto needed a tangible market/reason d'etre to be valuable. I have recently paid $40 for a $240 SWIFT transaction that I made on behalf of my father, as his bank (with most Russian banks) have been cut of from the world's financial system. Crypto is fulfilling a real need felt by many people all around the globe; it's just most of those people don't live in first world nations.
That is way more than it should be, but could easily be solved with traditional methods (banks & fintech) with some competition and sensible regulation (like SEPA transfers in Europe being basically free).
I recently had to pay nearly 100$ for accidentally data roaming a few MB abroad, but the conclusion is not that the internet and 5G is fundamentally flawed and need to be replaced by web3.
> Crypto is fulfilling a real need felt by many people all around the globe
Yes, the need to circumvent regulations regarding money transfers.
Earlier quoted context omitted.
False. Fiat monetary systems are built on a state monopoly on violence. Trust is merely a byproduct. You are required to pay taxes in the local fiat currency, and if you fail to pay then the government will eventually seize your assets by force, or perhaps put you in jail. This is a feature, not a bug, and it generally works fairly well in practice as long as the government is at least minimally competent.
"generally works fairly well" - I agree with this, but I doubt we would agree at what it does fairly well. In the fiat systems the people with the most coins can issue themselves more coins on a whim, thereby devaluing all the other coins held by the poor. This too is a feature, not a bug, and it works really well for all the people with the most coins. They get to slowly and consistently extract wealth from the poor…
Earlier quoted context omitted.
> You say speculative, I say productive. Oh I totally agree! Stocks in companies are absolutely productive assets. Though they are still speculative. I guess the first thought that comes to mind is well, so what? Does it make sense for individuals to plow money into the stock market even at all-time highs? Should you basically have to perform an investor level due diligence for buying these productive assets? Sometim…
Gold famously doesn't decay, but why should I expect prices to remain constant in terms of gold? If I sell you a chicken today for 80 milligrams of gold, why would you be obligated to sell me an equivalent chicken for 80 milligrams of gold in twenty years? Gold isn't a perfect store or value, it's just a perfect store of gold.
The cost of chicken has actually plummeted over the last century, even adjusting for inflation, because we can battery farm them now and they produce way more meat than they used to due to selective breeding etc.
Earlier quoted context omitted.
> Why is financial engineering inherently universally without qualification bad? Yeah because it takes up engineering time and produces no tangible good but to widen inequality.
I cited three examples of financial engineering. Just to be clear you oppose mortgages, index funds, and ATM machines? I agree all of these or at least mortgages and index funds probably increase inequality especially given uneven access. As far as tangible goods — home ownership, retirement savings, and less time spent waiting at the bank.
Mortgages were invented way earlier. ATMs are an earlier invention. If you use todays categories they would have been invented by automation engineers.
While index funds are a financial product they were invented before financial engineering became a thing. Financial engineers are not needed to run index funds. They are employed to out perform them.
"Financial engineering plays a key role in the customer-driven derivatives business — delivering bespoke OTC-contracts and "exotics", and implementing various structured products — which encompasses quantitative modelling, quantitative programming and risk managing financial products in compliance with the regulations and Basel capital/liquidity requirements."
And i am not alone with my distain.
"The financial innovation often associated with financial engineers was mocked by former chairman of the Federal Reserve Paul Volcker in 2009 when he said it was a code word for risky securities, that brought no benefits to society. For most people, he said, the advent of the ATM was more crucial than any asset-backed bond."
As for definition of financial engineering, i takes those from http://www.wirtschaftslexikon24.com/d/financial-engineering-...
The term financial engineering is also used insofar as it is about the use of innovative financing and risk hedging instruments. In this sense, financial securities are first broken down into their basic elements, e.g. interest, repayment, currency, maturity, security, additional rights (»stripping«) in order to be able to evaluate them (individually) better. Based on this, new, optimal financial titles are created during »Replicating«, in which the modules are optimally combined according to the respective financing case.
The concept of financial engineering can be seen in summary as the design, development and implementation of innovative financial instruments and processes as well as the realization of creative, tailor-made solutions for investors and buyers
Earlier quoted context omitted.
>I'd say you have a more black-and-white vision than me. I definitely do. If a part of bitcoin's chain of usage requires enough trust to ask the government to intervene to protect me, why not just trust the government? >My suspicion was simply that many HNers tend to reflexively upvote any comment that paints crypto in a bad light. I think that many people agree with me, and that it's not some reflex, fud, or decepti…
> I definitely do. If a part of bitcoin's chain of usage requires enough trust to ask the government to intervene to protect me, why not just trust the government? I am not sure I understand the question, Bitcoin does not require trust or intervention from the government. Your original comment is objectively incorrect in two different ways. It's not even remotely a surprising event[0] and most importantly, self-custo…
I disagree and have made my case elsewhere. Anymore and I think we'd be going in circles.
>You can't make this up": used to express great surprise.
I think I used it correctly, but agree to disagree on this as well.
Sorry for confusing your suspicions with something more conspiratorial.
Earlier quoted context omitted.
> I'd doubt BTC will go to zero I think there's some serious liquidity issues coming up ahead. You need a buyer at the other end to sell, and I think there's an unknown point where there are effectively no buyers. Right now there are still plenty of crypto-bugs out there that will provide some liquidity because they think things will eventually turn around, but even these people only have so much cash. There's a mome…
The problem is, when does bitcoin actually crash? I agree it is a scam and should crash in a sane rational world. But I’ve heard these exact arguments like 5 years ago. It’s the scam that just keeps going! Eventually it has to end, right? What is the thing that makes it end? Or will it just fizzle out with no real implosion? Maybe after 10 years to most people it would be just a distant memory?
It's impossible to predict.
> What is the thing that makes it end?
Regulation, sentiment, Tether falling apart, a serious recession... Anything, and nothing could be the last straw.
Precisely speaking, it'll end when people, on the net, will stop see buying it as a way to make money. When that will happen is anyone's guess.
Earlier quoted context omitted.
> Being happy about retail investors losing money is immoral. I hope you realize that. No, it is not immoral. Retail "investors" should know better than "invest" into things with very shaky connection to reality where it is predicted value next Wednesday can be anywhere between zero and infinity. If they loose all your money on crypto that is purely their fault for "investing" into something which has no real value a…
So someone made a mistake? And the correct moral approach is to laugh and gloat?
Earlier quoted context omitted.
You did not cite 3 examples of "financial engineering," you cited examples of "financial services." If crypto made it meaningfully easier to borrow capital to invest in utility assets, then I'd :heart: it too. (Mortgages) If crypto made it meaningfully easier to own equity capital in assets priced by utility, then I'd :heart: it too. (ETFS) If crypto made it meaningfully easier to transact for utility goods/services…
Can you provide a decision rule that distinguishes financial services from financial engineering? I do not feel as confident as you seem that the group of things called “crypto” will not be useful for financial services.
To give you a crypto example of this, Aave is financial engineering, because it allows users to make a bet that they can execute high-volume short-duration trades that yield more than Aave lending fees.
In terms of what is financial services, my definition is: Any action taken that allows capital holders to better deploy their capital into the real (read: goods and services) economy. Again, no prefect source, but [3] [4] [5]
Again the key nuance here is financial services primarily focus on supporting the real economy, while financial engineering is primarily focused on risk/reward
And to be frank, I would absolutely love it if cryptocurrencies supported the real economy in literally any way shape or form. I would get "BTC4Life" tattooed on my forehead, I would dedicate my life to working for the innovators in the space, but unless you've got some secret, I don't think you can give me an example of literally anything cryptocurrency does to support the real economy that a centralized solution couldn't also do.
[0] https://en.wikipedia.org/wiki/Financial_engineering
[1] https://www.investopedia.com/terms/f/financialengineering.as....
[2] https://www.iaqf.org/what-is-financial-engineering
[3] https://www.imf.org/external/pubs/ft/fandd/2011/03/basics.ht...
[4] https://www.cisa.gov/financial-services-sector
[5] https://www.law.cornell.edu/definitions/uscode.php?width=840...
Earlier quoted context omitted.
The difference between speculation and investing isn't in that you want to earn money (everybody who buys stock want to increase their wealth). The reason is for why you pick this particular instrument. When I buy stock (or when Berkshire Hathaway does it) I buy into business that I hope has sound fundaments and is going to grow and create more value over time. I spend considerable effort trying to understand the sit…
Unless you have an equity position you haven't given the company anything for the shares when you buy Berkshire stock. You are essentially riding off of Buffett's success and making money without doing any work.