Comment by danuker | Hacker News Reader

Comment by danuker | Hacker News Reader

From here: https://www.stephendiehl.com/blog/crypto-absurd.html

> There are no fundamentals to any crypto token and it’s discounted future cashflows are all strictly zero and thus its present value must be strictly zero.

This is demonstrably false.

Cash has no future cash flow, yet its value is clearly not zero.

The way I see it, the value of an asset depends on how desirable it is to market participants (demand), as well as on its supply.

If Bitcoin has a believable enough story ("there will only ever be 21M units"), and it draws people in, while national currencies inflate ceaselessly as economic growth stalls, the relative value of Bitcoin grows.

Other assets are far from better.

Current public companies' Shiller PE ratios are in the "ridiculous" area - it takes 35 years to recoup costs of an investment. https://www.multpl.com/shiller-pe

Current inflation is much higher than government bond yields. This is one definition of financial repression - the government sponsors itself with its own currency, in spite of the real negative return.

Well of course it will when enough people (globally) decide to have a literal revolution (including the crime and punishment that entails) after realizing that neo-libertarian ideals are _obviously_ the only plausible way to maintain a society. /s

I see an argument like this in every crypto thread. Come on. You should know that this is a political argument and that, in the US at least, we're pretty damn divided. Talk about stuff that you can plausibly predict at least. You can't predict worldwide economic failure _inevitably_ leading to increased use of crypto. Full stop.

From my perspective, that probably does a lot of damage and doing anything other than leading, governing, non-violent protesting (in person) will not help. The wild west of complete lack of regulation over the economy is a scary and probably dangerous thing. As someone who actually _enjoys_ government regulation (gasp!), I hope you realize that this turn isn't at all likely in the western world from my point of view. Further, if your arguments only apply to countries with authoritarian regimes, please say so.

You may say "well hey, but it's perfect for people living under authoritarian regimes tho!" to which I say, cool - let them get after it. Does it do _anything_ (other than lose/make me money) that I couldn't do with my current currency in the US? No? Okay, then that's a terrible idea.

I never said anything about regulation.

My only issue is that investment in the traditional markets is subject to government-caused inflation.

This was only the case since Nixon. I would love to go back to stricter regulation such as the gold standard. It is a simple way to enforce financial sustainability.

The US never reverted the "temporarily" suspended convertibilty of the USD to gold. Bitcoin is a reaction to that - gold for a digital age. It IS a form of nonviolent protest. It is scarcity through complete accounting and messaging.

Bitcoin isn't a reaction to the loss of the gold standard, something which happened a very long time ago and is widely agreed to be have been a bad idea in the first place.

Really though my main point is that you seem tone-deaf. like - "money hasn't been real since we got off the gold standard" is just old libertarian rhetoric. Are you not aware that there are views on this, mainstream ones even, that disagree? Anyone taught Keynesian economics in high school is going to have a view on this and simply saying "oh yeah all the economists were wrong actually but the crypto people got it right" just isn't convincing anyone except for those who are entrenched and/or uneducated.

Diehl's argument is that the PV is zero, and the post to which you are replying is a response to that. So while you are quite correct that the arguments introduced are political, they are still convincing arguments to some degree, and that is publicly observable, so people will value these assets in the knowledge that there are a hardcore of 'strong hands'. You seem to be saying that these political arguments are more true in 'regimes' than in 'the western world'. This is even better. If the political thesis is true in some countries then the connected assets will be valued based on that, and even those of us who are blessed to live in managerial states will be able to hold assets with those prices – all thanks to Erdoğan, al-Sisi et al.

But this is not Diehl's argument. He's saying that crypto isn't worth anything no matter how many journalists MBS cuts into little pieces. His line (which appears to be a dumbed-down, unattributed version of what Nassim Nicholas Taleb says) is that an asset with no cash flow has zero present value. NNT's version is that an asset with no cash flow must be valued based on the price "at infinity". Diehl wants this to mean that any self-licking ice-cream cone has zero PV, but that is simply false, in that a self-sustaining process which never ceases really does have that "price at infinity". Most of gold's value comes from this, i.e. from the reasonable expectation that humans will value gold for as long as there are humans. There's a respectable theory of money which says that moneys arise in this way – a feedback loop of belief about others' beliefs about value, that ends up creating the common knowledge that something is valuable. To this extent Diehl is simply begging the question, by assuming that something isn't a potential money and valuing it as if it can never be one.

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