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Comment by sjtindell | Hacker News Reader

Easily the best take posted here in a while. These are money games. And if you think this will be a minor sector of the economy, look at Wall Street - there is huge demand for these types of games, and that's when only people with $1+ million in net worth can really play. Now anyone can play, at the same time that traditional paths to wealth are stagnating or closing off completely.

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> Now anyone can play, at the same time that traditional paths to wealth...

the association of wealth with "playing" is very much a metastasis of the old system masqeurading as some sort of innovation. this is not wealth creation, this is zero sum games robbing orphans and widows. be my guest "playing" and feeling smug about it, but lets not rewritte the meaning of words

actually that strongest hint that crypto as it stands is an ugly distraction is that there is no real wealth creation associated with it. as in: a real economic activity (that is kosher) that has been enabled by it while it was prevented by fiat currency systems

Sure, I see you saying there’s no “real value” here. I get where you’re coming from, there’s no clear output of value the way we think about it sometimes. For years, even owning tokens, I was torn by this dichotomy. There’s no real value being produced…yet they’re transacting millions of dollars, and now billions, and now trillions. It was hard for me to reconcile that. What gives? I would ask you to consider your definition of real value. If you also advocate for the shuttering of high frequency trading firms, investment banks, and quant desks the world over, then fine, I respect your take. But people want to speculate and play zero sum games. Is what Wall Street does “real” to you? I don’t mean giving out loans. I mean the rampant trillions of dollars worth of speculation that is the real bedrock of what they do. Why does something have to provide “real value” to exist? Close all the poker tables, lotteries, casinos, stock exchanges. What this whole saga has actually made me think is, what is “real value”? Why does this feel different to you? It took me some time to recognize, this is real for many people. That’s all the value that’s needed. Again, the article points that out pretty well I think. And finally, the usage of the phrase “widows and orphans” feels a bit extreme.

> If you also advocate for the shuttering of high frequency trading firms...

yes, that is what I mean by "metastasis of the old system" but there is much more nuance: the overfinancialization of the economy is a recent phenomenon and while it is not black-and-white to separate from actual underlying intermediation needs I seem to recall somebody claiming that 5% of the current financial sector is actually useful. The rest is parasitic wealth transfer, essentially exploiting governance failures. With crypto there is no real economy so it is 100% parasitic.

I don't have a problem with an entertainement oriented gambling industry provided it is informed, discretionary and it does not become an abused addiction. But ideally in a society that has real problems to solve (health, education, environmental degradation) you want to harness the speculative instincts of both finacial system end-users and intermediaries to really perform "God's work"

Alright, I get where you’re coming from. I am a believer in the vampire squid as a mascot for investment banks. And I do think that the brain drain from more positive endeavors into these ones simply because they pay spectacularly more is not necessarily positive. A nuanced counter to the argument, I appreciate it and will ponder.

Who are the orphans and widows being robbed by crypto bubbles?

How does this enable new people to play? The rich can still gamble the most and come in early to earn the biggest rewards.

The poor still take the highest risk. As the poor buy more into it , the rich get richer as well. Maybe the poor get richer but how much money can they lock away? What stopped them from investing that money in the stock market before crypto was around?

I fail to see how this creates a new economy. It's the same economy just wearing a new skin. The players are the same players. The winners are the same winners with the same luck of making it big or not to inspire others to get into the hype.

Parent is referring to the accredited investor definition in the US [0] specifically ($1M+ in assets as one test), but more broadly to similar financial gatekeeping.

I'm skeptical it's an overall social good to remove guard rails that prevent sophisticated sellers from fleecing unsophisticated buyers (say what you want about the SEC, but they do enforce some rules), but I agree the current scheme prevents all people from equally freely investing in all opportunities.

[0] https://www.investopedia.com/terms/a/accreditedinvestor.asp

Thanks for the link. I do agree that playing without guardrails is problematic.

> How does this enable new people to play? The rich can still gamble the most and come in early to earn the biggest rewards.

So far this stuff has circumvented the accredited investor regulations.

You’re right, many of the biggest winners are ironically probably the same players. Probably lots of white, well educated, male, geeks. But the barrier to entry is way lower. Consider rules against “pattern day trading”. Sometimes to make more than 2 equity trades in a day, you need $25,000. To invest in anything besides bare equities, bonds, options, you need $1M+. This is US specific, but it’s common. Average people are literally not allowed to trade “exotic derivatives”. Cryptocurrency opens up the option of putting $100, $500 or $1000 (some tokens sell for fractions of fractions of a penny) into a range of games, derivatives, and other assets that you can trade 24/7, 365. You can create one yourself and make it available to everyone in less than 30 minutes, for free. You need a web browser and some money or credit (not much). Pay your taxes, and you’re good to go. The other options available to people are boring and take decades to pay off on average even if you do it right. But they provide the same thing - no one really cares what stock they own. They are speculating, playing money games. I think there is huge pent up demand for money games because it’s so hard to get into “traditional” finance. Even if you get in, there’s very few games available to you on Wall Street.

And you’re right it is the same economy, just open to all, and with way more fun ideas like flash loans (impossible in traditional finance), no-loss lotteries, decentralized automated market maker exchanges, tokens you can stake for other tokens that represent the interest and the principle which can then be traded again, etc.

Should it be allowed? Up for debate. I’m strongly against any rule that says “you’re too stupid, this is for your own good”.

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