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Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin

hussmanfunds.com

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Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin

#81

Post by Klathmon »

drdrey wrote: post #63
alex_young wrote: post #45

Earlier quoted context omitted.

>> Every time a block is validated, a single node in the network gets a reward, and everyone else’s computing time is completely wasted. >This is a misunderstanding of what PoW is http://www.truthcoin.info/blog/pow-cheapest/ Honest question: I tried to find the problem with that view in the link you provided, but couldn't. Can you explain it to others who may share the same belief? I think that's what the Bitcoin whi…

Probably not what OP meant, but mining pools are a way to address that. You team up with N other miners, and if one of them finds a solution then the reward is divided among the pool based on the work that was contributed

Which is actually the exact same system as mining, but with a fractional difficulty.

So instead of having to mine a block with a difficulty of 10 million, you are allowed to mine invalid "miniblocks" with a difficulty of 1 thousand. Then when someone in the pool happens to mine a block that is difficult enough to be valid globally, the mining pool software takes that reward and splits it proportionally among all users based on how many "miniblocks" they generated (with different pools doing different weighting).

Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin

#82

Post by Franciscouzo »

alex_young wrote: post #45
VMG wrote: post #14

Understanding Bitcoin is hard. Here is a response to some of the criticism: > Every time a block is validated, a single node in the network gets a reward, and everyone else’s computing time is completely wasted. This is a misunderstanding of what PoW is http://www.truthcoin.info/blog/pow-cheapest/ > The system already features a rather steep cost per transaction, and hardly any of those transactions are for the purch…

>> Every time a block is validated, a single node in the network gets a reward, and everyone else’s computing time is completely wasted. >This is a misunderstanding of what PoW is http://www.truthcoin.info/blog/pow-cheapest/ Honest question: I tried to find the problem with that view in the link you provided, but couldn't. Can you explain it to others who may share the same belief? I think that's what the Bitcoin whi…

No ones computing time is wasted, you don't do any progress while mining, you just have a one in 8481426187000000000 chances of finding a valid hash each time you generate a hash.

Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin

#83

Post by smogcutter »

VMG wrote: post #47
alex_young wrote: post #45

Earlier quoted context omitted.

>> Every time a block is validated, a single node in the network gets a reward, and everyone else’s computing time is completely wasted. >This is a misunderstanding of what PoW is http://www.truthcoin.info/blog/pow-cheapest/ Honest question: I tried to find the problem with that view in the link you provided, but couldn't. Can you explain it to others who may share the same belief? I think that's what the Bitcoin whi…

You need opportunity cost in order to secure the network. Without that, there is no incentive to keep the network secure. There is no cheaper solution to solve this problem, therefore there is no waste.

"Bitcoin is inherently wasteful, therefore it's not wasteful." What?

Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin

#84

Post by sdy »

I believe the man is essentially saying that past performance does not indicate future performance. Ironically, most of the comments here are saying he is wrong, because of his past performance.

Can we instead talk about his specific points and why they are wrong instead of just focusing on his past performance?

Also, it looks to me that his performance was good during the great recession. So if another recession is coming, shouldn't the critics here be flocking to him? Or is everyone stuck in the current bull market feedback loop?

Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin

#85

Post by matwood »

runako wrote: post #13
pdog wrote: post #5

This guy expects a market loss of about -65%, which would send the S&P 500 back down to 900. He also expects negative total returns over the next 12 years. Of course, his Strategic Growth Fund has not only underperformed its benchmark (the S&P 500 index), the fund actually has negative returns over the past 1, 3, 5, and 10 year periods[1]. Losing money in this market is a truly remarkable feat. [1]: https://www.hussm…

This company has ~$750mm under management, and has several funds that manage to have both a) high expense ratios and b) horrible performance over the short and long terms. Serious question, for those who work in finance: how do companies like this stay in business? Shouldn't the transparency of their poor performance have long since driven them out of business? Semi-serious question, also for those who work in financ…

For some people a fund that only does well in bad times is their hedge. You just have no way of knowing who this funds clientele is.

Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin

#86

Post by lmm »

squozzer wrote: post #19

I find myself in agreement with most of the author's statements, especially regarding bitcoin and paper wealth. I also like the following statement -- "If our policy makers are interested in boosting long-term structural U.S. GDP growth, they should be providing direct and targeted tax incentives for real investment, education, research & development, and other factors that could, over time, increase our nation’s pro…

Education is in a bubble of its own at the moment, partly because it's fun out of proportion to its economic value. We're churning out PhDs who then have nothing to do. "Innovation" tax incentives reward companies for registering patents, but if patents ever did reflect innovation that's long since fallen to Goodhart's law.

Infrastructure investment is usually a good idea; so is direct government funding of real research, the kind that NIH or DARPA put out. But if, as the article claims, the biggest issue is the number of people in the labour force, then the best way to improve growth would be to ensure more people can participate in the labour force. That means encouraging things like public transport and flexible working hours, and finding a way to square our current approach to unemployment and medical insurance with the so-called gig economy (i.e. people working multiple part-time jobs). That would be win-win, and is unquestionably the government's area of responsibility.

Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin

#87

Post by [deleted] »

Franciscouzo wrote: post #82
alex_young wrote: post #45

Earlier quoted context omitted.

>> Every time a block is validated, a single node in the network gets a reward, and everyone else’s computing time is completely wasted. >This is a misunderstanding of what PoW is http://www.truthcoin.info/blog/pow-cheapest/ Honest question: I tried to find the problem with that view in the link you provided, but couldn't. Can you explain it to others who may share the same belief? I think that's what the Bitcoin whi…

No ones computing time is wasted, you don't do any progress while mining, you just have a one in 8481426187000000000 chances of finding a valid hash each time you generate a hash.

[deleted]

Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin

#88

Post by erikb »

kyaghmour wrote: post #70
todipa wrote: post #48

There is a lot to dissect but I would focus on labor force. Our labor force used to be all human labor. Now it includes a large number of bots, both physical and software, that take care of business. The (output = labor . x) doesn't work anymore.

Great. But that begs for more questions. Money is a unit of trade between humans for getting something from the other human in exchange for your money. If an entire class of humans is no longer needed, how will they receive money to pay for what they need? How much is your legal tender worth when large swaths of the country whose denomination you claim your wealth from are no longer "part of the economy"? Not that I…

I believe these questions are exactly what is driving the current crisis. Let's not be confused here. People getting more rich, and prices rising doesn't mean we don't have a crisis.

The problem is that nobody knows yet, what this world will look like, where the formula value = number_of_people * output_per_person holds true. So where to put all the capital, power, and information wealth that one has created in a system based on that formula? So everything that gives the impression it may make it over the leap into the next system, start-ups, new currency, tech gimmicks, gives some of the people hope that they have finally found something that will protect them and bring them into a good position for the next cycle of politcal evolution.

Truth though is, there are no systems that hold forever, or which could predict something which is not part of their system. There is only flexibility, intelligence, and a few tricks that sometimes work. E.g. making fire will probably the same, even if capitalism has ended. A useful trick to surivive cold and food-sickness. Also the ability to build trust relationships may survive as long as humanity survives. But few of these really enable one to continue living in the luxuries wealthy people are used to.

Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin

#89

Post by [deleted] »

Franciscouzo wrote: post #82
alex_young wrote: post #45

Earlier quoted context omitted.

>> Every time a block is validated, a single node in the network gets a reward, and everyone else’s computing time is completely wasted. >This is a misunderstanding of what PoW is http://www.truthcoin.info/blog/pow-cheapest/ Honest question: I tried to find the problem with that view in the link you provided, but couldn't. Can you explain it to others who may share the same belief? I think that's what the Bitcoin whi…

No ones computing time is wasted, you don't do any progress while mining, you just have a one in 8481426187000000000 chances of finding a valid hash each time you generate a hash.

[deleted]
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