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Comment by low_tech_love | Hacker News Reader

I love the fact that crypto people are not satisfied with creating one pseudocurrency out of thin air; as soon as that has the tiniest semblance of stability (in this case ether) they go and create other ones “backed” by it. How did we reach the kind of socioeconomic climate where people are actually willing to put their hard-earned money into such a thing?

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> How did we reach the kind of socioeconomic climate where people are actually willing to put their hard-earned money into such a thing?

They’re unregulated slot machines. Go and look at the Terra/Luna Twitter and Reddit. It’s filled with casual to addiction-level gambling tells. The responsible ones acknowledge they’re putting a few hundred in and will likely lose it but maybe it goes up. The less fortunate treat it like an investment.

The regulated companies didn't do much better: CVNA -91% PTON -91% RIVN -90% FVRR -90% HOOD -90% U -85% ROKU, DKNG, RBLX, the list goes on

.. and we call those investments.

Go ask a CFA and they’ll tell you that buying stocks in these companies is not investing, but speculating. Nothing in these company’s fundamentals warrants any investment. If you buy a stock based on the idea that someone will buy it at a higher price without considering it’s intrinsic value, it’s speculating.

it's fine to speculate, as long as the person doing the speculating knows what they're doing. The only problem happens when you speculate, but think you're investing.

There’s a difference between equity in badly performing companies, and a Ponzi scheme where “stable” coins that promise a value of 1$ can depeg.

There is a difference, the code for UST/LUNA was open-source and risks were out in the open.

In contrast, a company can hide wrongdoing and you can be left with something like Enron.

Long-term, I'd trust the algos more than the traditional system. Survival is a powerful selector, flawed ideas will be weeded out. Those that remain will be both resilient and transparent.

> I'd trust the algos more than the traditional system

LUNA being an algo stable helped with nothing. Do Kwon erratically bought BTC at a peak and during this attack, it was "sold" but is now /unaccounted/ for. Further, they minted more LUNA and increased circulating supply from 350k to 7T in a few days.

None of this is algorithmic, but purely (and messily) human-operated.

Agreed, there will always be scammers out there. Trust the code, not the human shills. Just as with a company, consider who has controlling interest. One advantage of crypto however is that the books are wide open to those willing to look.

No, my point is that an algorithm can only control very few things - most governance actions are manual and attacks can exploit anything.

Yes that's fair, but if you choose algos/chains with actual distributed governance then you at least the voting has to happen on-chain so you can sell if you don't agree with the way a vote is going.

You can sometimes do the same with companies but definitely not always.

At least there are like two or three levels max here; in 2008 the banks had some synthetic assets that owned themselves! I think crypto is a scam but probably no more than most of wall street.

> How did we reach the kind of socioeconomic climate where people are actually willing to put their hard-earned money into such a thing?

Many people feel it's their only way to escape wage slavery.

That's the core of every MLM sales pitch.

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