Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Calling All Hackers: How money works (2024)

phrack.org

Post reply on HN
Print view View original

61–70 of 262 posts

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

#61

Post by antonvs »

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.

The problem with that is they deny the existence of the time value of money, which is essentially a mathematical fact.

It's why Islamic banks come up with various workarounds to be able to charge the equivalent of interest.

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

#62

Post by danielmarkbruce »

motohagiography wrote: post #57
danielmarkbruce wrote: post #17

This is bad, don't read it. When you borrow $100 you do not create a liability which includes the interest to be paid. People who don't understand the very basics of finance and accounting shouldn't write about finance and accounting.

the US treasury secretary was on calls about whether to bail hedge funds out of gamestop to prevent cascading financial system failures. arguably there is nothing that is too dumb to be written about finance. dont let anyone discourage you.

Various government agencies are on calls to bail out various players in the financial system all the time and will continue to be. That isn't dumb per se.

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

#63

Post by nopamina »

danielmarkbruce wrote: post #55
LeanOnSheena wrote: post #48

Earlier quoted context omitted.

Yes, at the time of the initial transaction the borrower would not have a liability on their balance sheet that included the interest due. Over the course of the borrowing period the borrower would accrue interest expense commensurate with the passage of time that would increase the borrowers total liabilities. The author misunderstands the fundamental accounting definitions of liabilities (and also assets). Liabilit…

Most of the really stupid stuff written is written in good faith. It's not an excuse. There are many good books written about the financial system, accounting, etc. Rather than writing just another (incorrect) blog post, why not point to the good sources of information?

[flagged]

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

#64

Post by [deleted] »

m463 wrote: post #28
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.

[deleted]

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

#65

Post by LeanOnSheena »

isubkhankulov wrote: post #47
danielmarkbruce wrote: post #17

This is bad, don't read it. When you borrow $100 you do not create a liability which includes the interest to be paid. People who don't understand the very basics of finance and accounting shouldn't write about finance and accounting.

The $100 does become a liability on your balance sheet. You’re right that interest doesnt and is an expense. In the context of this post, does it matter? He’s not teaching bookkeeping here. He’s explaining the time value of money.

He's explaining the time value of money but uses an example that accrues interest before any time has passed?

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

#66

Post by gerdesj »

danielmarkbruce wrote: post #17

This is bad, don't read it. When you borrow $100 you do not create a liability which includes the interest to be paid. People who don't understand the very basics of finance and accounting shouldn't write about finance and accounting.

You are fixating on one tiny point which isn't really that important within OP's ... errm "opus".

Why not critique the entire work?

Anyway:

I borrow 100 from someone. I am now in debt and they are in credit - to balance, both are 100.

However, they require a return on investment - usury: 10 for 100 (or a 10% margin - call it what you like).

When I take out my loan, I am in debt for 110 and they are in credit for 100 with a promise of 10 later. So we have some accounts - my one account is 110 in debit (I borrowed 100 and promised to pay 10 on top) and they have two accounts - one for the principal (100) and another for the 10 interest. To me, in this case, the principal and interest are part of the same account but to the lender they are separated out because the interest is probably taxable as income.

However, it might be the case that I can set off my debt or the interest on my debt against some tax. In that case I will maintain two accounts - the principal and the interest.

All those interests will also end up in additional accounts related to probably banking.

I've probably pissed off a few accountants with my choice of terms but in the end I do understand how fiat money works.

What gets on my tits is assertions such as "People who don't understand ..." with no working.

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

#67

Post by arunc »

I can relate to a lot of things said in the article, both practically and philosophical. Thanks for speaking to/for fellow hackers!

PS: Hackers websites don't have to look this ugly. We do take care of attention to detail that the page have to be rendered for mobile devices as well.

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

#69

Post by hsbauauvhabzb »

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.

Being exceptional in cybersecurity is a pretty good indicator that someone will be successful in other fields. A good cybersecurity person will understand that cybersecurity is a mix of technical mastery and the art of understanding human behaviour.

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

#70

Post by hsbauauvhabzb »

m463 wrote: post #28
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.

Is your comment perhaps in reference to the comment ‘ the assumptions and estimates that go into it, I recommend Financial Intelligence by Joe Knight and Karen Berman’ and not the parent comment you’ve replied to?
Post reply on HN