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Comment by breul99 | Hacker News Reader

"... way to get really cheap domains that I can turn a very generous profit on via domain parking"

Lost all respect for the author once I read that. Squatting on domains and making people who want to legitimately use the domains pay far above market rate is ridiculously scummy.

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I never said I was a squatter, and I'm not. I buy domains that are very low value to basically everyone but me, because I know how to drive traffic and monetize it effectively. And I almost exclusively buy new domains (less than 0.5% of my portfolio is pre-owned domains). shop.com would have been a VERY unusual purchase for me, I've only bought a domain for more than registration costs once before and it was also $500 (though that transaction went flawlessly).

So you run those crappy sites that totally aren't squatting domains but just have a useless collection of links using referrals and affiliate marketing and ads but no actual content on domains that are places people accidentally wind up either due to typos or clicking your link in search results for something you are linking to?

The rest of us call the people who run websites like that domain squatters, because they are adding zero value to the internet and simply tie up a domain which they would likely sell for the 'right' offer.

So don't buy anything cheap and then sell it later at a higher price because that's scummy or does this only apply to domains; if so, why? Your respect for traders is presumably zero.

Arbitrage is often a little sketchy.

It'll be about the same level as respect for ticket scalping, and with about as much value added.

Yes, my level of respect for traders is exactly zero. There's a difference between investing and trying to make a profit off short-term trades, arbitrage, and other forms of financial practices that offer dubious value to anyone other than the trader.

When you buy stock as an investor who do you think you're buying it from? A trader.

The respectable case is traders who transfer good between supplier and buyer because there is no smooth transfer path or when there is significant risk in communicating directly with the selling, such as stocks, grocery stores, and realtors. The non-respectable case is when the trader exists purely to hold onto then profit on the product. This includes domain squatters, ticket scalpers, and those people who buy things from one thrift store to sell back to another thrift store at a higher price. It's the same reason why patent trolls are so disliked.

Without ticket scalpers I couldn't decide to go to a sold out show or ballgame at the last minute. They provide a valuable service to me.

The standard answer is liquidity, which is a really abstract concept, and one I still struggle to conceptualize (how hft supposedly creates liquidity is still too abstract for me, for instance).

Here is one recent example that was eye-opening to me: http://www.bloombergview.com/articles/2015-07-07/can-you-rea....

Domain hoarding is different from 'buying anything cheap and then sell it later at a higher price'.

Traders add value by bringing the good to the customer. That is the justification behind their margins.

What value does a domain squatter add?

Traders arguably add value by adding liquidity and assisting with price discovery. Arbitrageurs do the latter by definition.

Though, these are fairly complex financial concepts, so it's easy for people to jump to the conclusion that large swaths of the financial industry are worthless. (Of course, some are, but many are not)

Is there some reason domain squatters don't help in price discovery? Seems like there are some analogies between the two cases. Or is that what you're actually saying?

"Squatting on domains and making people who want to legitimately use the domains "

Everytime someone trots out that squatter argument they assume that if the person who owned it that wants to sell it "for ill gotten gains" hadn't gotten to the domain first, that it would have been sitting around for them at the point they needed it for their idea. In 2015 or in 2005.

So, for arguments sake, if PG had wanted to use "Yc.com" instead of Ycombinator.com in 2005, the domain yc.com would just be sitting waiting for him to use at a cost of $NOMINAL_OR_AFFORDABLE because NOBODY ELSE would have used it for their "bake sale website".

How would you charge someone far above the market rate? Isn't the market rate determined by what someone is willing to pay?

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