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

#501

Post by tylerhou » Fri, Dec 04, 2020, 4:11 AM UTC

wizeman wrote: post #496

tylerhou wrote: post #490

Earlier quoted context omitted.

You have to pay taxes in USD. Not being thrown in jail is value... maybe not intrinsic though. USD in paper form can also be burned for warmth, or used to write on. In coin form, it has the same intrinsic value as the metal.

I think you would agree that the intrinsic value of dollars as backed by the metal in USD coins is negligible compared to how many USD exist, because nobody has them in substantial amounts (due to being impractical). The value of the paper that the dollars are printed on is also negligible compared to the value of the bills themselves, let alone all the USD that exist (as you probably know, the vast majority of which…

> I think you would agree that the intrinsic value of dollars as backed by the metal in USD coins is negligible compared to how many USD exist...

Yes, I agree.

> Besides, everything you said, including tax payment and keeping out of jail, also applies to the Venezuelan bolivar and quite a few other fiat currencies that completely crashed in value due to hyper-inflation.

USD will always be valuable as long as the US government exists and taxes its citizens in USD. This means that there will always be demand for USD (again, as long as the US government exists).

I don't think it's wrong to say that the US government is more stable than the other governments that print currencies that are less stable.

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

#502

Post by dwaltrip » Fri, Dec 04, 2020, 4:21 AM UTC

shawnz wrote: post #470

itsoktocry wrote: post #442

Earlier quoted context omitted.

> I'm enjoying sitting on the sidelines and watching people "save" in a fiat "currency" whose value is not linked to anything intrinsic I'm pro crypto, but this is ridiculous. No intrinsic value? I can spend my dollars anywhere in the world with no input or reliance on any other entity. They might be the most valuable asset on the planet.

That's not intrinsic value though. Fiat currency by definition has no intrinsic value. Fiat literally means "let it be done", i.e. it is given value by a decree and not because of its intrinsic value.

There's no such thing as "intrinsic" value. Value is determined by humans depending on the context.

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

#503

Post by kbhn » Fri, Dec 04, 2020, 4:28 AM UTC

wayeq wrote: post #464

andrewmcwatters wrote: post #276

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. What a time to be alive. No wonder the S&P 500 CAPE ratio is beyond the 1929 high. No one has any idea of what the intrinsic value is of anything. Investing in companies that don’t make a profit,…

Looking at Bitcoin solely through the lens of an investment vehicle is myopic. Bitcoin solves a number of problems right now, for example providing an opportunity for the nearly 2 billion people without access to a traditional banking system to securely participate in the world economy with nothing more than an old Nokia phone that can be bought for a few dollars. Another example is how it is providing a way for peop…

> Bitcoin solves a number of problems right now, for example providing an opportunity for the nearly 2 billion people without access to a traditional banking system to securely participate in the world economy with nothing more than an old Nokia phone that can be bought for a few dollars.

This is a fantasy put forth by Bitcoin enthusiasts that's not supported by the facts. The average cost of a bitcoin transaction is currently ~$7.5USD[1]; nobody in the unbanked world is spending the cost of 1-2 Nokias to make day-to-day purchases.

> Another example is how it is providing a way for people in hyper-inflationary economies like Venezuela to store value.

This isn't true. Zelle's ability to store actual USD make it the preferred means for storing digital currency safely in Venezuela right now[2]:

"Ecoanalítica, a local consulting firm, estimates that 17% of transactions at retail establishments in Caracas go through [Zelle] and that other Venezuelan cities are seeing similar usage levels. The actual figure may be larger, considering the data do not include smaller shops."

Accusing others of being ill informed or dishonest while yourself pushing forth maximalist narratives that aren't grounded in reality is a bit rich.

[1] https://ycharts.com/indicators/bitcoin_average_transaction_f.... [2] https://www.bloomberg.com/amp/news/features/2020-11-11/zelle...

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

#504

Post by andrewmcwatters » Fri, Dec 04, 2020, 4:29 AM UTC

shitgoose wrote: post #495

andrewmcwatters wrote: post #276

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. What a time to be alive. No wonder the S&P 500 CAPE ratio is beyond the 1929 high. No one has any idea of what the intrinsic value is of anything. Investing in companies that don’t make a profit,…

crypto is money. money can be invested, i.e. crypto can be invested. one does not invest in crypto. you are looking from the fiat=the_only_money prospective, which is limited. there are many types of money - fiat, crypto, gold. you can move between them, but those are not strictly investments in a sense of cash flow generation. re intrinsic value - i think that intrinsic value is a fiction. there is always a market v…

How many legs does a dog have if you call his tail a leg?

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

#505

Post by didibus » Fri, Dec 04, 2020, 4:35 AM UTC

diab0lic wrote: post #234

didibus wrote: post #94

Earlier quoted context omitted.

When you buy into a Crypto you're investing into the technology itself. If you believe that more and more payments will be handled through it, its value will go up, thus making it a good investment. If you take Bitcoin, there's a small pool of total Bitcoin and that's guaranteed by the technology. Each new coin costs real money to mine, due to needing physical compute resource to do so, and it gets harder and harder…

> When you buy into a Crypto you're investing into the technology itself. This argument of technology + limited supply is fallacious. If the technology is so useful the coin can just be cloned with more supply. The technology itself doesn't force me to participate in a limited supply market in order to get the benefits.

> The technology itself doesn't force me to participate in a limited supply market in order to get the benefits

I'm not sure what you mean here. The technology does indeed force you, that's part of it. If you want to trade in its currency, you can't cheat it and make more coins for it, the network consensus will catch you and prevent you to cheat.

If the tech fails to deliver this property, nobody would trust its currency, and nobody would use it for transacting.

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

#506

Post by didibus » Fri, Dec 04, 2020, 4:59 AM UTC

overcast wrote: post #455

didibus wrote: post #94

Earlier quoted context omitted.

When you buy into a Crypto you're investing into the technology itself. If you believe that more and more payments will be handled through it, its value will go up, thus making it a good investment. If you take Bitcoin, there's a small pool of total Bitcoin and that's guaranteed by the technology. Each new coin costs real money to mine, due to needing physical compute resource to do so, and it gets harder and harder…

The only thing you're investing in is the wasting of the worlds energy supply. At best it's speculative.

All investment is speculative, you hope that the asset you acquire with your money is worth more in the future.

With Crypto, you hope that the coins you acquire from it are worth more in the future.

Same thing.

Energy requirements of Bitcoin are a technical limitation, but as proof of stake is trying, that might just be a matter of time till it's minimized. Similarly, physical settlements today is also costly, moving real physical dollar bills across borders obviously comes with its own energy expenditure. So I don't know which one is wasting more.

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

#507

Post by disown » Fri, Dec 04, 2020, 5:03 AM UTC

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 would classify myself as Boglehead and I believe in the fundamentals of investing in stocks

If you are a boglehead, just stick to no-load, low fee diversified funds. It's the smart way to go for most people. If cryptos are worth investing in, eventually you'll get cryptocurrency exposure via the funds you own or maybe a dedicated crypto fund through vanguard or whomever. I wouldn't take any investment advice on a social media platform.

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

#508

Post by ayyy » Fri, Dec 04, 2020, 5:14 AM UTC

andrewmcwatters wrote: post #380

vmception wrote: post #355

Earlier quoted context omitted.

> It’s supposed to be a currency. And yet it’s not. It doesn’t exhibit any of the traits of a currency I’d want to spend at least. ah that argument, I read that recently, those are skeumorphs, here is a quote > When it comes to this asset class, there are still people that argue against the concept of Bitcoin, mostly in reaction to one of its sales pitches without ever noticing what this really is. For example, peopl…

The creator was trying to make “electronic cash” that evaded central banking manipulation from what I can tell. Except there’s a fixed supply. There isn’t a fixed supply of value in the world.

It's a "fixed supply" of something that's very divisible. The media loves the fixed supply narrative, but it's really not important. Other coins have permanently inflating supplies and their charts mostly match the bitcoin chart.

The real gift of bitcoin is that it jump-started a wave of innovation by birthing "cryptocurrency". Once people saw that money would flow into bitcoin, people started new projects to try out all the other now-obvious ideas for cryptocurrencies. People want to build important things.

If you're thinking of bitcoin in the mindset of beanie babies or building a better credit card, then you may have missed the bigger thing that's happening. It's becoming obvious, to me at least, that cryptocurrency is trending in a direction where it will profoundly disrupt any industry that uses the internet, beginning with finance.

Also, I've been following this thread, and you should probably re-read all of vmception's comments. IMO he's right about some important stuff that your replies suggest you may be missing.

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

#509

Post by lamp_book » Fri, Dec 04, 2020, 5:21 AM UTC

Der_Einzige wrote: post #98

baron_harkonnen wrote: post #43

Earlier quoted context omitted.

I recommend you read some of Stephen Deihl's thoughts on the subject[0]. You're not alone if you feel that cryptocurrency doesn't make sense as an investment vehicle, but the HN community will make you feel crazy for not seeing what a great thinking this is an incredible new opportunity and "things are different this time!" There is no better indication of a bubble then people telling you that you're the crazy one fo…

You are crazy for not buying a house in 2007. I can't think of a better investment to have right now than a house purchased in 2007...

I think you are forgetting about all the people who could not hold onto their houses.

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

#510

Post by didibus » Fri, Dec 04, 2020, 5:23 AM UTC

andrewmcwatters wrote: post #463

didibus wrote: post #94

Earlier quoted context omitted.

When you buy into a Crypto you're investing into the technology itself. If you believe that more and more payments will be handled through it, its value will go up, thus making it a good investment. If you take Bitcoin, there's a small pool of total Bitcoin and that's guaranteed by the technology. Each new coin costs real money to mine, due to needing physical compute resource to do so, and it gets harder and harder…

Can I try and convince you why that's not a good idea? Let's say you and I agree that a day's wages is worth 30 or so units of my currency--well pick any value, it doesn't matter for this example. And yet the currency keeps growing in value week over week. Should I not be paying you less and less over time? If the currency increases in value 7% in a month, should I not decrease your pay proportionally? And are you re…

I don't know what that has to do with crypto though? That's how all currency works.

> And are you really going to negotiate that day-to-day, week-to-week, month-to-month, year-to-year? What if the value drops significantly in the middle of the day? What do I pay you at the end of the week?

Whatever we agree on. My current pay is mostly company stock, and that has a big fluctuation, yet tons of people seem fine to pay in stock and be paid in stock.