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Comment by freedomben | Hacker News Reader

I think the elephant in the room is the self harm that is happening. It may be very rare, but it is happening, and it happens in stock market crashes too (not just in crypto). Even if you don't care about crypto, even if you think people who trade in crypto are idiots, please remember there are real humans behind these things.

If you're licking your wounds, remember that things come and go. I know that's a shitty thing to deal with (I've lost my ass is crypto before too so I know first hand), but don't do something to yourself that is permanent and can never come back from. It's absolutely NOT worth it.

If you dodged this one, now is the time to be full of compassion to your fellow humans, not dancing on graves and gloating in "I told you so."

View on HN

I think one can have compassion but there is also no need to infantilize people. It's not idiocy that drives people to this, it's greed. It's the idea of obtaining wealth without work, of speculation, and the thrill of what is plainly gambling. That is a vice in many traditions for a reason, and we would do well rather than just being compassionate to create a culture that doesn't tolerate it.

Protecting people from foreseeable disaster is not the same as infantilizing them, and greed doesn't explain why we need laws requiring seat belts and prohibiting unsubstantiated claims on herbal "remedies" and warnings that hot coffee is hot. A big part of the value of society is the accumulated experience of "seemed like a good idea at the time but wasn't", but only if we make sure that experience is shared with the next generation of tulip bulb speculators or beanie baby collectors before things get out of hand again.

>It's not idiocy that drives people to this, it's greed. It's the idea of obtaining wealth without work, of speculation, and the thrill of what is plainly gambling.

Is it greedy to have a 401k? People and companies have been pushing crypto as a reasonable investment for years. For example, it felt like crypto took the place of beer as the primary advertiser during this year's Super Bowl. It isn't all crypto assholes sitting at the top of Ponzi schemes who have been and will be hurt. Plenty of normal people only put their money in because they saw Matt Damon and Larry David talk about it on TV like any other traditional investment vehicle.

Matt Damon and Larry David don’t shill real investment vehicles. Needing a celebrity sponsor is a major red flag.

I put up with four years of drive by trolling on r/buttcoin from the "have fun being poor" crowd.

And when I post on this forum that crypto is just a worthless decentralized Ponzi scheme that doesn't solve any problems I'll get neckbeards explaining down to me that I just don't understand. Don't get me started on the ones who think that crypto is some kind of radical utopian political solution.

There's literally nothing there, it is all smoke and mirrors, and if you don't understand that and consistently shit on the people telling you that the digital tulips aren't wearing any clothes, don't be surprised when those people don't give a fuck when you lose it all.

I will absolutely dance on graves over this. I'm that deeply exhausted with all of it.

Bitcoin is worth 3x what it was when you started posting there … after the past week’s crash.

Madoff's Ponzi lasted for 20-40 years producing returns until it abruptly stopped.

What I want is these crypto charlatans who were giving malicious financial advice to go to jail.

Yes. The US SEC puts about two of them out of business each month, and often claws the money back, but jail is rare. Too rare.[1]

The IRS sometimes comes in after the SEC if someone operating a fraud didn't pay their taxes. They put people in jail for years.[2]

Remember, Al Capone was sent to Alcatraz for tax evasion.

[1] https://www.sec.gov/spotlight/cybersecurity-enforcement-acti...

[2] https://www.irs.gov/compliance/criminal-investigation/founde...

We see how many went to jail in 2008 when the ‘real’ economy had trouble…

I don't think this is the end of crypto. I expect it to become a permanent competitor to casinos and the lottery. So I hope that people who have been wiped out understand that they can jump in again someday and hopefully pick the next winner.

> I hope that people who have been wiped out understand that they can jump in again someday and hopefully pick the next winner.

The National Problem Gambling Helpline (1-800-522-4700)

I really hope you forgot a /s

> I think the elephant in the room is the self harm that is happening

What is this even supposed to mean? Any large enough institution that involves risk is going to involve suicide, because some people when harmed will choose suicide. Some sports fans are harmed when their team loses, some are harmed so greatly that they commit suicide. Is fan suicide the elephant in the room for professional sports? Some people are harmed when a relationship breaks up, _many_ of them are harmed so much that they commit suicide. Is suicide the elephant in the room of interpersonal relationships? Is there some fundamental problem with romance or sports that must be addressed to prevent further suicides?

I think the loss of personal finances is far more acute than sports, but Sam Anderson, in the book Boomtown, conflates Timothy McVeigh's disillusionment with the Buffalo Bill's Super Bowl loses in the early 90s. It's a good little section of writing.

the r/terraluna sub is pretty wild right now

They locked all new threads. You can still post in an existing thread but you can't create a new one.

I've been angry about it since the beginning. This was predictable, and now people are asking for compassion?

Compassion was us yelling about this since the beginning.

Compassion was the folks who developed Dogecoin as a satire coin to explain the problems involved in the system.

Asking people to 'be full of compassion' is fine, and dancing on graves is terrible, but the time for compassion was the warnings that were years back, in the face of 'have fun being poor' taunts, while never ever folding or letting up. The sentiment here was the same type of nice but not kind nonsense that has gripped much of the culture.

I try to think of the people I convinced not to speculate in these markets. The fortunes not lost because people came to me as a life long investor, asking my opinion of cryto markets, and me carefully arguing that they were a commodity, not an investment vehicle, and you don't generally invest in rocks, because rocks don't produce anything.

Those of us out there that saved people from losing their life savings will never be acknowledged, because humans do not care to think about the lives that were saved by safety precautions, only the lives that were lost due to negligence.

https://medium.com/@philberent1/why-the-terra-luna-protocol-...

https://twitter.com/jordonaut/status/1352363163686068226

Meanwhile I have a house and was able to lift out of poverty by ignoring people like you and saving in BTC instead of USD for the last decade.

YMMV.

Even gamblers occasionally hit the jackpot.

> I have a house and was able to lift out of poverty by ignoring people like you and saving in BTC instead of USD for the last decade. YMMV.

This is fine. But you acknowledge you gambled. If you'd lost, it would have been inappropriate to ask for others' sympathy or, worse, public support.

The only way to not gamble wealth is not to have it. Leaving cash in the bank is gambling that government won't inflate it away. Buying equities is gambling that market conditions won't change. Buying bonds is gambling that the returns will outpace inflation and that the bond seller won't default.

> only way to not gamble wealth is not to have it

This is a false analogy between taking measured risks and gambling. Putting 100% of your assets into anything, particularly a cryptocurrency, is gambling.

Putting 100% of your assets into one thing is bad gambling. Putting your assets into diversified, positive-sum assets is good gambling. I can play semantic games too :)

> Putting your assets into diversified, positive-sum assets is good gambling. I can play semantic games too

Semantics means arguing over definitions, not misunderstanding them.

The difference between positive- and zero-sum systems is unambiguous. We can call participating in the latter, whether by trading cryptocurrencies or derivatives or playing slots, with an intent to profit gambling or wijiwogging or blurlippening, it doesn't matter, the expected outcome is the same.

>Semantics means arguing over definitions, not misunderstanding them.

Ah the semantics of semantics. If two people disagree on a definition, then there will be some belief that the counterparty "misunderstands" the definition. That goes hand in hand.

>The difference between positive- and zero-sum systems is unambiguous.

And uncontested.

>We can call participating in the latter, whether by trading cryptocurrencies or derivatives or playing slots, with an intent to profit gambling

Yes we can.

We can also call a well diversified portfolio of 'positive-sum' investments gambling. You are risking your money on the chance you'll have a favorable outcome. There is no riskless portfolio. You are forced to gamble if you keep your wealth, because there is always an element of chance regarding maintaining your wealth. The default, uninvested state, for most is to gamble inflation won't eat it away.

> can also call a well diversified portfolio of 'positive-sum' investments gambling

We can call it whatever we like. It's still positive sum. (That's the point of the part of the quote you omitted.)

Crypto and slot machines are not positive sum. That is a fundamental difference that separates them from investing.

> is no riskless portfolio

Straw man [1]. Nobody claimed this.

[1] https://en.wikipedia.org/wiki/Straw_man

Again, semantics: 'Investments' are not required to be made on 'positive-sum' underlying assets. For instance, airlines may make an investment in oil futures (a zero sum contract) to hedge expenses that correlate with their fuel costs.

>Crypto and slot machines are not positive sum.

I think this the part where I link to a wikipedia page of a fallacy I don't understand/doesn't apply? /s

You could say the exact same thing about the broader stock market volatility (read: downturn) we’re experiencing. How one can be considered gambling and the other not?

At least the crypto investors aren’t expecting a wholesale bailout at any point, unlike “sophisticated” institutional investors as we saw in 08…

> How one can be considered gambling and the other not?

Positive- versus zero- or even negative-sum games.

That doesn’t explain anything. The broader stock market valuation bears no resemblance to reality and hasn’t for a while.

Crypto does have value. Not all of it, but again we could make the same comparison with ridiculously overinflated stocks like PTON or CVNA.

> doesn’t explain anything. The broader stock market valuation bears no resemblance to reality and hasn’t for a while.

This is irrelevant to the game dynamic. (Trading stock in the short term is usually gambling, by the way, because trading per se is a zero-sum game.)

> we could make the same comparison with ridiculously overinflated stocks like PTON or CVNA

One, I can buy a Peloton. People pay for Pelotons. Positive sum. Two, if you go all in on Peloton stock, yes, you're gambling.

You’re arguing semantics. No one is arguing that dumping all your money into Bitcoin or PTON specifically is a good idea.

> One, I can buy a Peloton. People pay for Pelotons. Positive sum.

Yes and once Peloton runs out of people to sell overpriced bikes and treadmills to, the valuation will (hopefully) return to reality. Uber continues to lose money on every ride.

If you’re going down the “people pay for it” route, we could say that people also pay for NFTs of monkey pictures.

> If you’re going down the “people pay for it” route, we could say that people also pay for NFTs of monkey pictures

I think NFTs are silly, but they are positive value systems. Like art.

>How one can be considered gambling and the other not?

Because stocks have inherent value in the form of dividends or the potential of future dividends (or the current/potential stock buybacks, which are mathematically similar).

I think this misconception must be the root of the whole issue.

Stocks appear to have inherent value if you don't look at the entire planetary economy as a system.

In reality dividends don't distinguish between productive innovation and wealth extraction.

Innovative dividends are derived from the use value of new goods and services which increase freedom of action for the majority of the population. Wealth extraction is derived from zero-sum movements of capital, typically benefiting rentiers at the expense of productive employees, decreasing majority freedom of action.

But even the first can create externalities - which are real physical cost which are not accounted for.

A house that burns down because of climate catastrophe is a real physical loss. A increase in the value of a house created by aggressive speculation is an imaginary gain that only exists because the people in the game believe in it.

Trad economics exists to hide these differences, and make a hallucinatory financial reality which seems more real than the physical world.

Crypto is an obvious symptom of this hallucinatory mindset. Not only are the tokens imaginary, but the environmental costs are catastrophic.

But the rest of the economy really isn't built on firmer ground.

> Stocks appear to have inherent value if you don't look at the entire planetary economy as a system

Stocks have value because companies have value. You can buy the whole company and have something with positive value. Buying every outstanding derivative nets out to zero. Buying every cryptocurrency leaves you with something worthless.

The fact that there is wealth to extract implies that the ticket that allows you to control the extraction has value. The company has assets and the ticket gives you proportionate ownership of them and proportionate control of where they go.

>A house that burns down because of climate catastrophe is a real physical loss. A increase in the value of a house created by aggressive speculation is an imaginary gain that only exists because the people in the game believe in it.

And a house that is built creates real value by taking land, adding materials and labour, and creating something worth more than the sum of its parts.

I don't need to forgive all of the economic system's sins to explain why stocks have value.

One Bitcoin is presently worth $30,000.

I'm generally curious about this question because it popped in my mind when I read your comment but what about the situation where someone builds or buys a house in a dense forest in California?

Said house is destroyed in a fire, insurance can't pay everyone out (see Paradise fire) and then those same people end up begging others for support (Including GoFundMe) pages.

Didn't they gamble on having a house in a high risk area and lost? Why do we only bail out certain people and not feel bad about it?

Just like houses built in known flooding zone.

It’s a good point.

The tricky part is, a lot of flood-prone areas tend to also be very economically active overall. Lots of ports on the coasts or along riverbanks which need people to operate and deal with the economic activity of the area, but rivers do sometimes flood and hurricanes will push water inland.

Well presumably they have insurance, although I think the days of insurance companies offering insurance to just about anywhere in the western US are numbered, with the rapidly disappearing water and constant threat of wildfires. But people who bought LUNA didn't buy insurance.

But generally I agree with you, there are definitely tragic events that happen to people that get more sympathy than other types of tragic events, even if they're pretty similar ultimately.

But I'm also someone who "gambles" on nothing but "ponzi schemes", (i.e. I buy Bitcoin and Ethereum) according to HN. I don't have insurance though, if some black swan thing happened and I lost it all, then I don't have much recourse.

Crypto is far from the only thing where that's a possibility, though. I'd say three of the startups I worked for have been even more of a gamble than my crypto purchases (all three shut down a little more than a year after I joined and I never made a dime more than my kind of low salary, and they didn't offer a 401k so I missed out on a lot of financial accumulation and security there).

That is in no way "gambling" and is in no way analogous to cryptocurrency investments.

Everybody needs a home, and one way to have a home is to buy one. Investing one's savings in buying a home comes with the expected option that one can live in it indefinitely if one wants to. Fulfilling this expectation does not depend on others becoming homeless, nor on their home becoming worse, nor on others being unable to buy a home in the future.

On the other hand, nobody needs to invest in cryptocurrencies. Investing one's savings in cryptocurrencies is done on the expectation that they will increase in value at least until one can sell them at profit. Being able to do this depends on others losing out by comparison, inasmuch as one expects others to buy the same amount of currency at a greater price.

> Investing one's savings in buying a home comes with the expected option that one can live in it indefinitely if one wants to. Fulfilling this expectation does not depend on others becoming homeless, nor on their home becoming worse, nor on others being unable to buy a home in the future.

I don't think any of this is true. You buying a home deprives someone of said home and drives the expected price up. We have a homeless crisis in California because we are not building enough and everyone is treating housing like an investment ("It can only go up!", "This is an investment!").

Living in it indefinitely is also a pipe dream. You're paying taxes and fees that can increase or change at any moments notice if enough people agree. This requires the same consensus as fundamental algorithmic changes in cryptocurrencies. You can't bank of living somewhere "indefinitely" without agreeing that it's a gamble...nothing is guaranteed.

Regarding the "need" to invest in cryptocurrencies, I can kind of agree. Shelter is a need because it helps us survive more efficiently but one could argue investing/growing wealth should also make life easier to live if it works out.

You don't see a difference between people losing their homes, and people losing their money because they were greedy and bought some pictures of apes they thought would make them rich?

I just wanted to share a counter example to those saying Bitcoin is a poor savings vehicle. I did something I believed in and happened to get a better result than I ever planned on. I am in it for digital sovereignty, and establishing an alternative to banks and inflationary fiat that is accessible to all. It going up in buying power on average is something I also do not really see as surprising given the deflationary nature, interest, and adoption.

When the traders walk away I will still be using Bitcoin as a way to store and transfer value p2p unless something with similar properties replaces it.

It is a poor savings vehicle. You got lucky. You are confirmation biasing yourself into thinking it's a good savings vehicle. This it tough love and for your long term well being you should acknowledge this.

I will take storing wealth in a deflationary currency over an inflationary one any day.

How many USD savings accounts are outrunning inflation these days?

You just got lucky. It is time everyone in crypto acknowledge that.

True in almost all aspects of life.

Even if you think BTC with limited coinage is valid (vs Dogecoin which is unlimited), how can you believe an algo "stable coin" like UST is after the iron.finance failure?

Good for you. People like you will make money. That's how all speculative bubbles form... nobody would join them if there weren't highly visible gains in wealth, but they are effectively zero-sum. Unless the product creates value, independent from speculative value, it's a bad investment period.

The entire reason we were banging our drums was exactly because people made money, but the music will stop, and when it does, all that value disappears. There is nothing wrong with crypo as a commodity. If you need it to build something with, fine, but it's not a wealth creating asset. It's a commodity, which is effectively never an investment vehicle.

The crash was in a non-appreciating asset.

“I played Russian roulette and won, you should try it too!” is not a very convincing argument.

Nonetheless, the winners think they’re winners because they made the right choices and will try to convince others to follow suit.

It's not Russian roulette. It's "let's all shoot each other and whoever wins gets all the stuff".

“My dad played a tontine and won. So should we all.”

Don't people trade in commodities though? Corn and soy and other things fluctuate in price because of their utility and changes in supply and demand, no?

Trading != Investing

The commodities trade is driven by people needing those commodities. Right? Like, Kellog and Absolut need wheat. They need them because their business relies on them. They are willing to pay a premium, to make sure their supply will be there when it's time to make cereal or vodka.

(interesting aside, the best heuristic i ever learned on how to get good vodka, look up the manufactures headquarters/operations location on google maps, and if you don't see grain silos, don't buy the vodka)

Who needs bitcoin? Honestly not many people right now. The speculative boom is that, in the future, it becomes internet-cash. Then people will need it, they'll want it a lot to buy things in the internet, and that's fine. If they do, then the value will go up.

However, aside from the fact that bitcoin is absolutely not able to handle cash-like transactions at all, there is still no reason for normal people to speculate on it now. If it becomes the de facto internet cash of the future, then, cool, you just exchange for it in the future.

The idea that anyone could ever anticipate the future demand of a trivially replaceable ledger of exchange is... honestly insane. I'm not saying it's not worth speculating on, but please, god, don't put any serious portion of your investment portfolio in those types of arbitrary bets!

"Who needs bitcoin? Honestly not many people right now."

Worldwide, lots of people.

There's folks in Venezuela and Zimbabwe who need Bitcoin because their national currencies are hyperinflating.

There's folks in El Salvador who need Bitcoin because it is their national currency.

There's folks fleeing Ukraine who need Bitcoin because their nation is at risk of being swallowed by a large empire.

There's folks in Russia who need Bitcoin because their nation is doing the swallowing and getting cut off from the world financial system as a result.

There's folks in China (and other countries) who need Bitcoin because their nation can't be trusted not to interfere with private property and it's good to have a little insurance policy on a thumb drive, piece of paper, or memorized.

I think that cryptocurrency is one of those areas where people in the developed world look at their own life experience and think "Who could ever need that?", not realizing that they represent a tiny fraction of humanity and that the experience of most of the rest of the world is dramatically different. I work on a product (Android) with about 3B users. I work on a tiny segment of it (tablets & TVs), with about 12% market share combined, and we're always struggling to get the larger org to invest in developing us. But when you run the numbers, you realize that the 12% of Android users with a tablet or TV is about 340M, more than the entire population of the United States. Similarly, the number of mobile phone users with accessibility needs (largely vision difficulties) is also larger than the population of the United States, yet it's awfully hard to get people to consider screen readers and assistive technologies when developing.

Americans in general are wildly unaware of what a tiny percentage of humanity they are (for reference: about 4%), and this comes up over and over again in HN threads.

You are talking about storing wealth. There were already myriad ways to store wealth before bitcoin. Precious metals, jewelry, property, etc., bitcoin is not needed like wheat is for vodka. It is just one way of many for doing the things you describe.

I'm not saying bitcoin is going to zero. In these threads, i've always said bitcoin has perfectly reasonable use cases, but if we're being honest not many people really need to use bitcoin, and yes, i'm saying, in the the grand scheme of things, the population of El Salvador is not many people. It will probably not become the de facto unit of exchange in our lifetime, or ever.

I'm not talking about bitcoin is a vehicle for temporarily transferring wealth from one asset to another, i actually think it's pretty useful for that, i'm talking about bitcoin as a vehicle for investment... which is why the lion's share of people have been buying it in the last decade.

What percentage of your examples would not be wildly better served by owning USD?

Maybe China?

Certainly Venezuela, Zimbabwe, El Salvador, and other countries around the globe already use USD as a de facto currency. Heck, in Zimbabwe and El Salvador it's de jure as well!

To be fair, China is a big chunk of the global population already. But crypto enthusiasts are wildly unaware of what little use it actually has. It comes up over and over again in HN threads and on Twitter.

Hello, i'm from a country which is going through rapid inflation (>50% annually).

It's true that people here need either an alternative currency for purchasing foreign goods (access to USD or other currencies is restricted, and customs fees are insane), or an alternative asset for keeping the value of their savings.

But it's not true that people need Bitcoin. As a currency for purchasing things, Bitcoin is useless. People here are better off evading customs taxes (smuggling), and purchasing via USDs bought on the black market. And for keeping the value of their savings, again, people usually turn to USDs. Some people have speculated with BTC and other cryptocurrencies, yeah, but this is not so much for savings, but more for greedy speculation.

And it's not like the USD is important on itself, it's just an intermediate goal for something else. If the USD becomes too unstable or loses much of its value, people here will turn to other stronger foreign currencies.

So, imagine what this means in the context of what your parent comment said: that Bitcoin's ledger being trivially replaceable.

No, Bitcoin is not needed here. Not at the moment at least. And if it is in the future, so be it, but so can be any other crypto or alternative currency. Who can predict which it will be (if any)? I don't see how betting on future Bitcoin's value for countries like mine makes any sense when there nothing inherent about Bitcoin that would make more valuable than any other alternative currency.

So why is it needed and used outside those situations? Like let's say Euro-zone and USA? Seemingly extremely stable currencies, with SEPA absolutely superior user experience if costs are considered. Do those listed markets really support the value we see?

Just fyi,

The Ukrainian Hryvni is only down about 10% since the war started. The Ruble is actually up 10% (these are all quotes on open markets, not ones controlled by governments)

Bitcoin is down more than 30% in that time. It has a short history with incredible volatility and is very illiquid in a bad situation.

Government currencies aren’t the best when controlled by tyrants, bur crypto isn’t ready for global adoption yet. Would you park your GTFO money in a commodity that can be destroyed by an Elon Musk tweet?

Some years ago I updated the Wikipedia article on Skyy vodka, which read like a press release, by putting in actual facts. Such as that the ethanol came from a industrial ethanol plant in Pekin, Illinois which also made ethanol for fuel use. Then it was shipped by rail, in tank cars, to a company in California which mostly makes low-end booze, but also will make a custom brand for you if you pay them. The water used is tap water run through a reverse-osmosis plant. A little bit of re-distillation for polishing, some mixing, some flavoring, and it's piped into the bottling line. The outsourcing company makes about a thousand different brands, but, as they admit in interviews, there are only about hundred different recipes. Skyy itself was purely a marketing company - everything was outsourced. Eventually they were acquired by a real manufacturer, so they found an exit.

So it was a meme brand. But a real product. Now we have meme brands with nothing behind them.

Looking at you, Bored Ape Yacht Club / Otherside / Yuga.

>The outsourcing company makes about a thousand different brands, but, as they admit in interviews, there are only about hundred different recipes.

https://www.youtube.com/watch?v=RqfLOJGS_7o#t=1m24s

Are there other examples of commodities that turned into investments? Tulips? Is that how all many bubbles form?

Unironically as a Nigerian Bitcoin has been a god send. I was and am completely skeptical about crypto given that I believe 99.9% are basically complete scams. However, the idea of a censorship resistant layer of money transfer with no intermediary has worked wonders when our government was restricting access to our own money in our bank accounts. Will Bitcoin be that in the future? Who knows, but the demand is there for sure if you live in a society like this.

Can't Nigerians open bank accounts in a foreign country? Why did you need cryptocurrency to achieve your goals?

I can only imagine it's easier to pay for life's essentials with a debit-card issued by a UK or Dubai bank in Nigeria (or cash withdrawn from an ATM using the same card) than it is to pay for those same things with Bitcoin there.

There are lots of books on the history of financial downturns.

https://www.goodreads.com/book/show/6372440-this-time-is-dif...

And there isn't realization that crypto isn't zero-sum market, but actually a negative-sum market. The not insignificant money spend on it running in first place must come from somewhere. Traditional markets are pretty cheap comparatively.

It does create value. It is an inflation resistant currency I can and very frequently do use to buy things and settle debts. It historically trending up in value is a fantastic and expected bonus because of the inflation resistance and utility. I would keep the same amount of value in bitcoin I do today if the price was truly fixed, or if the price returned to a penny. I will not be selling if it drops to 1k either though losing that much buying power seems unlikely at this point. I want an alternative to the banks, which is the problem bitcoin was created to solve. Not to be a stock.

I bought an item for thousands of dollars in bitcoin just this week just to dodge paypal fees. Some of my clients pay me in bitcoin too. I am considering offering a discount for it as it saves me conversion fees.

The traders are speculating and most of them do not care about privacy or censorship resistance or using it as a currency so they are just here for the hype and greed. They are fickle and will lose a lot of money.

I just buy, hold, and spend, because bitcoin is a currency that, if used without kyc exchanges, offers much better privacy and censorship resistance than visa, paypal, or mastercard.

Privacy and censorship resistance are utility.

Those betting against the internet succeeding long term as the defacto way of exchanging data were wrong, and those betting against decentralized value storage will be wrong too. It will get worse before it gets stable but I am in it for digital sovereignty above all else.

Did new wealth get created? Cryptocoins are a negative sum game (trading is zero sum, but since mining wastes resources, total has to be negative). For you to have gained this wealth, a group of people have to have lost this wealth, they might not have realized it yet.

A ponzi scheme doesn't stop being a ponzi scheme because your personally profited from it. It doesn't stop being a ponzi scheme because it uses complex technology that 99% of people don't understand.

Your money came from the people who ruined their lives gambling.

Bad carma for 7 generations

Yes, but your story only exists because you found a bag holder who may or may not jump off a bridge when the chickens come home to roost.

I am still holding that bag and buying more myself because I see utility in private, decentralized, and censorship resistant value storage.

I will have no regrets for funding digital sovereignty. It is a war for critical freedoms that if lost at least wont be as bloody as those with weapons.

The world I want to live in requires decentralized money and governance and I continually vote with my wallet.

And someone lost their life savings so that you could have that.

Dude, where did you think that money came from?

Let’s see if the next decade delivers returns like the last decade. There’s no guarantees of that, unless you believe past performance is an indicator of future success.

I won’t be getting a house unless it does, so here’s hoping.

I also won’t be in trouble if it doesn’t, so here’s also to a sensible investment strategy.

Yeah, when even cryptocoin bulls consider these ponzis... you have to wonder if there is any rational reason for holding them is a greater fool and a belief that you can get out faster than others. I do wonder how you calculate the psychic cost of constantly monitoring your "stable coin", or maybe the answer is just the 20% annual returns on Anchor?

Almost the exact thing happened with ironfinance a year ago! https://ciphertrace.com/analysis-of-the-titan-token-collapse...

Just pointing out 1 dogecoin is still worth 1 dogecoin.

Wow!

(Also 100% agree on the compassion thing: schadenfreude for ostriches who thought sticking their head in the sand would make the objections false is only natural.)

I know you're being flip, but this is exactly my point. If you needed doge to go out and buy an NFT (if that's your cup of tea) you can still go convert your money into doge to buy an NFT!

The usefulness of the commodity doesn't change, just like apples or steel, it's something you can go out and buy with your savings. Just don't buy apples because you think the value of apples is going to skyrocket forever! At best, apples will go up for a temporary period and then find equilibrium.

> Just don't buy apples because you think the value of apples is going to skyrocket forever

This is terrible advice. People speculatively trade commodities all the time, including agriculture commodities. They are just as valid of an investment as equities are.

Your advice that commodities are “not an investment vehicle” is simply wrong, and can be proved wrong with very minimal effort. I wonder how everybody you convinced using this rationale is going to feel when they discover it is nonsense…

What you're saying makes zero sense. What is this commodity that you think will skyrocket forever, that people should perpetually hold as an investment vehicle?

“Skyrocket forever” is clearly a hyperbole. But commodities can and frequently do go on sustained rallies.

Commodities can be part of a general portfolio. They can be a reasonable hedge on inflation and, if you are well aware of their markets, reasonable to speculate on. I would surely explain this to anyone i talked to.

That said. "Buy bitcoin/eth/avalanche/shitcoin" is not a nuanced understanding of commodities, and the people i was talking to were not asking if "a responsible percentage of their portfolio should be dedicated to commodities."

These are multiple people in my life, people with no equity positions asking if they should put some of their precious savings into bitcoin or etherium, period, and asking which one. After that we had long talks about investment philosophy.

I think you need to get better at explaining your philosophy then, because the entire basis of your parent comment is that commodities are “not an investment vehicle”. Advice that we now seem to agree is not correct.

I am extremely precise when i explain it. If you're going to espouse a position that commodities are something that laypersons should be fine investing in, then i'm going to say we have very different points of view.

“You are not knowledgeable enough to invest in commodities” is probably good advice for most people. It is also honest and clearly demonstrates the way in which you’re being (perhaps rightly) judgemental.

“Commodities are not an investment vehicle” is incorrect, and the way you are presenting it in this argument is intentionally deceptive.

The first quote seems to be the advice you mean to give most people. The second one seems to be the advice you are actually giving, with the implication that you think it will be more effective when it’s presented deceptively?

I would highly recommend you change your approach here. Because all of these people will one day figure out you lied to them, which will taint the credibility of what should fundamentally be good advice.

> People speculatively trade commodities all the time, including agriculture commodities.

Nobody HODL's avocados, there isn't an expectation for bananas to go to the moon eventually.

Trading != speculation != investing

Is that you Do Kwon? Is this me?

I think its the time for education.

Where are the news articles about the stablecoins functioning perfectly? There are a quite a few stablecoins functioning perfectly.

You pressed play on your “oh a crypto thing” script about anything crypto related and tradeable. You’re in comfortable and like company, but the issue with it is that it dilutes the conversation way from the one specific organization that launched Terra and Luna. This is the exact forum that should be talking about system designs, instead has all these odd anti-speculation rants. Half of this forum is paid in lottery tickets, its out of character.

Luna was functioning perfectly until it wasn't. Tether continues to function, for now.

Netflix was doing great, then other services came along. Local restaurants were doing well, then covid hit. Most things have a life cycle and black swan events happen. Can't be avoided; you can only have a contingency plan.

This is not a black swan event.

An entity attacked the peg with 100,000 BTC, its sort of a black swan event.

Isn't it kinda inevitable that if there is money to be made someone will try to make that money?

if your protocol is vulnerable to a death spiral initiated by any flash loan by anyone at any time, and people told you over and over again, its not a black swan

I concede your point, but I feel like black swan event isn't a real thing if its some structural flaw that's obvious in hindsight,

eg. its obvious the 2008 housing market was going to collapse, so that's not a black swan, so what is an example of a black swan then?

> its the time for education

It's time for regulation. Financial institutions that can cause systemic damage are regulated and taxed to pay for (a) that regulation and (b) remediation should (a) fail. We need that for crypto.

> are a quite a few stablecoins functioning perfectly

If people believe this, we need special regulation for stablecoins. The one thing more dangerous than a risky asset is a risky asset pretending to be safe. (The regulator and its enforcers can be funded out of a special tax on stablecoin holdings by U.S. persons. Hell, make it revenue positive.)

There will always be things people can interact with

instruction goes in, stablecoin comes out

input output

smart contracts are vending machines placed on the side of an ephemeral gas station

what regulation would you like to see and how would it apply or prevent.. anything with that reality?

I think instead of punitive taxes the regulators could try to make an approved framework seem more attractive, which just creates another additional option for the user

> what regulation would you like to see and how would it apply or prevent.. anything with that reality?

Publicly disclosed audited financials for stablecoin issuers and a tax on holders of crypto assets that funds enforcement and, possibly, restitution if e.g. someone goes homeless. Starting point would be casino regulation.

Read up about wildcat banking system in the late-1800's early-1900's. That's what we need to educate people about. Not all the banks failed. Not all the notes were worthless. Many, many people still lost their life-savings.

This is not new. This is not the first speculative bubble. This has all happened before.

There is nothing inherently flawed about the concept of a stable coin. They should still not be considered an investment vehicle.

Stablecoins function perfectly until they don't. The others aren't immune to this kind of failure, though they may be more resistant. Once they become unpegged, you can get a "run on the bank", since there's no insurance to protect investors.

Then add insurance.

Imagine the people in the 1920s that were like “you know what would be funny… what if we got the government to add confidence to our private business with public money and then we get all the customers and skim a little bit from them at every turn, I know I know its dumb but that would be funny right”

For a bad enough crash, only governments can provide the necessary insurance.

For reference one protocol offered insurance for UST depegging for a 2% annual cost.

Nice, did it pay out?

I think these unceremonious undramatic payouts should be news

The one I was looking at is a couple weeks out from paying out, but they are collecting everyone's claims right now.

This is why crypto needs to collapse sooner rather than later. To minimize the self harm.

There are a variety of non-tech circles that I incidentally run in. Biking, skiing, gaming, etc. Because I'm the "tech founder" of the group I regularly get questions like, "Soooo... know of any good crypto I should invest in?"

My response eventually consolidated to, "When making an investment, don't buy things you don't understand. Because odds are someone selling it to you as an investment does understand it, and that difference in your respective understandings is their investment."

This is spot on and how whales take advantage of retail. Or influencers dump on their followers.

I agree. What the hell is NFT Stablecoin and all the other snake oils been pedaled all this time .. could not make head or tails of them.

That's fine advice as long as you are willing to, in the same breath, tell people not to invest in vanguard mutual funds.

Any causal investor who claims they understand those is lying, even if they in fact are a stabler, safer investment.

Did you mis-paste? I don't know what that east coast west coast tweet have to do with anything? Seems like a non sequiter, unless I'm missing something?

Read through whole thread. It’s about the difference between being kind, and being nice, and how the two aren’t necessarily connected.

I've read it, the thread makes its way through the internet every week or so. In this case, it seems to just muddy the waters, but obviously others disagree.

It's effectively a non sequitur, yes. The point is that "feeling bad" for people who lost everything does not help them.

It is not, in fact, compassionate, at all. Compassion is donating to funds that help these people. Compassion is not participating in tax-avoidance, and participating in gov't, so we can have a society where people can actually lose everything and move on with their lives in a reasonable way.

"Feeling bad" isn't helping anyone and is actually just a way of making yourself feel faux-noble.

I agree with your stance, but think the metaphor itself is very strained. FWIW I also think the call to action here was "don't be a dick" more than it was "feel bad".

Of course being a dick while advocating for better protections from this kind of scheme is better than feeling bad and doing nothing.

As the article mentions, the drop for BTC and ETH was nothing unusual. This was a problem specific to UST/LUNA. Plenty of people in crypto warned about them. Algorithmic stablecoins like this have been tried before on Ethereum and all of them have failed.

I'll just point out that talking about being "kind" (under this nonstandard definition) isn't doing it. It's great that you gave your friends good advice, but is that what you're doing when you're bringing it up today?

None of us are doing anything material by talking about it on Hacker News, but the person you replied to seems closer to being kind at this moment?

You can be nice at this moment, but it's not helping anyone. Being kind, in this nice vs kind sense, means actually fucking doing something beyond purely symbolic gestures.

I will gloat and dance on graves of assholes who mocked me “ngmi”. I would be graceful and compassionate to those crypto supporters who did not call others names. At the end of the day, the people you meet on your way up are the same people you meet on your way down. If you were asshole on way up, you made your bed.

Case in point, some old tweets from Luna founder Do Kwon:

https://www.yahoo.com/news/terrausd-founder-kwon-mocked-econ...

Yeah, that guy definitely got what he deserved here. What a scumbag.

He would respond to people pointing out these problems in the past by saying he doesn't talk to poor people.

Hope he's bankrupt although I doubt it.

Bankrupt? His company built a huge reserve of bitcoin to use to defend the peg in a “non profit foundation”, no one knows what happened to this money. My cynic take is that at least a good portion of that didn’t get shoveled in the incinerator that was Luna in the last few days.

Also this

https://twitter.com/EncryptedPedro/status/152453147423764070...

"Do Kwon: "95% are going to die [coins], but there's also entertainment in watching companies die too" "

> Even if you don't care about crypto, even if you think people who trade in crypto are idiots, please remember there are real humans behind these things.

I don't care. There is nothing, NOTHING you could say to make me care about selfish cryptocurrency assholes.

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