Misplaced Crypto Schadenfreude
ortutay.substack.com
ortutay.substack.com
I also find the comparison to tech stocks odd. Stocks are, of course, a fever dream. But far fewer snake oil salesmen are marketing them as magical financial instruments with lofty safety guarantees. Besides, unlike the tech crash, a huge part of the lack of confidence in crypto right now is failed Ponzis like Terra Luna.
Terra / Luna is so last month.
Today is all about speculating upon Celsius.
Edit: On the other hand, it's a somewhat refreshing alternative to the usual exchanges, like, "Did you hear, X is bust?" – "This is, because you don't know how going bust works." – "???". (In essence, it's actually the same, as the alleged real worth of something going bust is the investment opportunity and anyone pointing at the values destroyed just doesn't understand this, since – allegedly – there isn't anything destroyed, but only opportunities created.)
Very true. But arguments in favor of cryptocurrencies often rely on absurd false dichotomies that start from a reasonable premise, and take it somewhere wildly unreasonable. This is just one example.
My favorite example: the way that human beings believe that gold has intrinsic value is somewhat arbitrary and based on historical or cultural factors, so it might as well be completely arbitrary -- this distinction is meaningless and/or doesn't exist. (This ignores obvious factors, such as the fact that gold is used in various industrial contexts, despite its high cost. Just for starters.)
The "natural" value of gold can be surmised by looking at platinum, palladium, and iridium, used more industrially.
I like cryptography, there is so much clever constructs in there, that allow to solve information-theoretical problems in really elegant ways. The blockchain certainly is one of those clever constructs. The thing is: it solves a very specific set of problems with the grace of a sledgehammer. And somehow everybody wants to have those problems. In fact even if they don't have these problems they do their best to squeeze their eyes very hard in order to pretend they do — and they take the weight of the whole sledgehammer with them.
Most problems people throw blockchains at can be solved mich better and way .ore reliable and efficient by a data base, or a certificate authority. And even in those places where it fits like a glove the true practicality of the resulting solutions is questionable at best. Imagine paying at the supermarket with bitcoin and waiting 15 minutes till the transaction is through.
We don't have to imagine or make up situations.
When Steam experimented with BTC a few years ago, it was a complete disaster. BTC can only handle so many transactions per 10 minutes because of the blockchain limit. The influx of purchases caused the BTC transaction fees to skyrocket from $1 / transaction to $10/transaction or $20/transaction, which for a $10 to $60 game is just unworkable.
Furthermore, when returns happened, you have to deal with the ridiculous price changes of BTC. For example, a 30-day return policy means that a user could have bought a $50 game for 1.7 mBTC on May 21st 2022, but if the user hits the "return" button... what do you return?
* Do you return 2.4 mBTC (representing today's $50 value?)
* Do you return 1.7 mBTC (representing the original purchase price of 1.7 mBTC?)
If BTC goes up, or down, during the traditional 30-day return window of retailers, the entire process is completely screwy. There's no good solution.
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The general answer is to "transact everything in terms of dollars", in that the 1.7 mBTC is converted into $50 back then. When you return the game, its $50 is returned and you get 2.4 mBTC back.
Except you just paid 2x BTC Transaction fees for this purchase and then return-order. And transaction fees are a market that varies in price severely. Or really, 8x BTC Transaction fees, because you went User -> dollars-to-BTC exchange -> User's Wallet -> Steam's wallet -> exchange -> Steam's bank account... then the return path of Steam's Bank account -> exchange -> Steam's wallet -> user's wallet -> exchange -> user's bank account.
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This is why the BTC community started yelling "store of value" for years, because the Steam purchases / BTC purchase experiment was a colossal failure. The BTC network simply cannot handle real-world transactions in a way that satisfies Steam gamers or the Steam store.
And here we are, a few years later, and it seems like no one actually tries to answer these questions or fix these problems in Bitcoin. Instead, we get Bored Apes, NFTs, and Stablecoins as the major sources of "innovation" over the past few years.
I'm all for the experimentation of money. But experimentation is only useful if you try to fix the problems that have come out of these experiments!! The BTC / Cryptocoin community has stopped innovating where it matters.
What a depressing load of manure. I can’t wait for it all to crash and burn yet I feel sorry for the many who were duped and lost a lot of money they couldn’t afford to loose.
Doesn't share the same characteristics.
I don't feel I'm missing out, tho. I'm refusing to participate in anti-social hucksterism. Even if there's the chance of making money.
"Cryptocurrency" was interesting, briefly, before the scams took it over. Now the interesting bits are buried too deep in scummy scams to be worth delving for.
The whole point of being an early stage investor is that you have to dig for the opportunities.
Here is what likely happens: A few cryptocurrencies become used or adopted by the public in some form. All the critics stomp their feet and say, "But a centralized database could do it better, faster, and cheaper! And better for the environment! This is 2026, technology is supposed to move in a direction that helps society! [Coughs in Google, Facebook, and Amazon]"
A few years later...
Ted: Where are you taking the kids?
Janet: Ted, I'm done with this! All you talk about is your hatred of crypto! You're always tweeting about it! What happened to our future?!
You spent all that time playing fucking Call of Duty online? Maybe if you had invested in the technology our daughter is using now we wouldn't be living in a studio!
You got it backwards. Its currently inflation (BTC getting less-and-less valuable over the recent past).
Deflation was 2020, when BTC climbed in price dramatically.
Neither deflation, nor inflation, makes for a good currency. That "1000 ether" bet could be $1-million if executed today, but it was $3-million just a few months ago.
Because there's no stability in cryptocoins, they are neither stores of value (they decline too quickly), nor currencies (they go up and cause price changes).
Proponents: Are left broke and sad.
Author of this article: The critics are just "tricked into thinking they are were right all along, and they miss out on huge opportunities in crypto."
Oh, that tricksy crash in the price of beanie babies! Always confounding the silly critics who are befuddled into thinking that they were right all along, when they said the price of beanie babies would crash. Sure, they said it would crash and it did, they said it was useless and it is - but it's just a trick! Tricked you, haha! Now I'm broke and sad, but you silly critics have egg on your face!
Those ideas are not conflicting ideas. If my friend takes his life savings, goes to Vegas, and bets it all on black: he can double his money and still be dumber than me. Crypto critics just got sick of people buying lottery tickets all day and telling everyone else how great of an investment lottery tickets are because they won one time.
I think it's disingenuous to call crypto an investment. It would be nice to see some legislation tame the absolutely insane relationship between crypto and fiat.
I like the idea of bitcoin, but until such time as it stops repeating avoidable mistakes tradfi has solved, I'm out.
Distributed, trustless consensus is a wild idea and I hope it finds root in something practical. Dunno if this is a thought about goal or not though. Seems to me that the current interest is building the next big crypto thing.
Also, isn't the idea of making money off of fiat/crypto exchanges kinda anti-thetical to what the cipherpunks were going for? Bitcoin's relationship to the USD is fairly toxic imo
This guy is like the poster child for misguided results-oriented thinking.
I never took part in the NFT wave. It was, of course, a tulip bubble, it married high-tech and artist in the most horrible way possible. Tsk tsk tsk.
Exploration, browsing, search and discovery are powerful things.
If there's anything that SCREAMS privilege, I can't think of a better example than that.
For people working retail job and who noticed the COVID-related inflation was unsustainable (20% of the USD stock was minted due to COVID IIRC), and that the grow in the M1 aggregate would lead to inflation that would hurt them, what else exactly do you think they could do?
We have nice jobs. They don't. We can work from home. They can't. We've been protected. They were deemed "essential" and told to wear masks and wash hands.
And now, you want to celebrate their savings being wiped because you have some moral objection to crypto, or because it made it harder for you to buy a GPU?
Sorry but I can't. Do your navel gazing/"fuck you got mine" without me.
Critics are not responsible for the losses. All of the lost money went to those who got returns on their crypto gambling and scams.
The classic hedge against inflation is stuff with indisputable value, aka commodities. Second-best is real-estate, since the time frame for that "Greater Fool" situation plays out over approximately a lifetime. Critics are super angry that people are being swindled into throwing their money into crypto in much the same way that critics are super angry that people get swindled into throwing their money into lotto tickets.
Has absolutely fuck-all to do with "moral objection" or "buying a GPU," and 100% to do with not wanting to see people pouring MORE of their life savings down the drain for the benefit of assholes playing media-campaign pump-and-dump games. The sooner it crashes and burns, the sooner we can hope to prevent more pointless financial deaths.
Pray tell then, should retail workers buy bars of gold, or mansions?
> Critics are super angry that people are being swindled into throwing their money into crypto
On HN, critics are super angry that many people got rich for doing things they didn't do themselves, because they consider such things swindle/morally bad etc.
> The sooner it crashes and burns, the sooner we can hope to prevent more pointless financial deaths
The only problem with this argument is that you are certain it's going to fail/crash/burn. What if it doesn't?
As I can't predict the future, I consider the chances of failures are not 100%. Actually, I believe the chances of success may be closer to 50/50.
Should crypto not fail, I wonder how people who celebrated the prior crashes will feel? Maybe they will just rationalize all that away, as most people don't seem to have too much of a conscience.
Personally, I prefer to avoid such conundrums altogether: my way is to not wish failure and to not rejoice in the crashes of even those things I disagree with: "live and let live".
But almost nobody believes they are evil or doing bad things, so I'm sure it a-ok to celebrate the crash because "The sooner the 100% guaranteed crash and burn happens, the better", right?
Sadly, retail workers are super hosed by inflation as they don’t have much to invest. But if they did, they could just buy a commodity ETF.
It’s been really funny to talk with friends who are “discovering” financial instruments through crypto like they don’t exist in the real world.
Pretty much everything is available to the retail investor and is much easier to buy than crypto. So a wage worker is better off buying $50 of a vanguard fund than $50 in some shitcoin or etf.
No one is 100% certain and I expect one crypto will make it because we need digital cash. But it shouldn’t increase in value and isn’t a good investment. Just like investing in dollars and putting them in your mattress is stupid, the winning currency will be stupid to hodl.
Just like people do win the lottery, people will make money off crypto in the long run. But most people will not as there’s nothing of fundamental value. That commodity etf at its heart is concentrated orange juice, or something real that can be sold and people demand. There’s nothing at the heart of crypto.
I absolutely loathe this article, but you have a point. It seems unseemly to engage in schadenfreude against gullible retail investors, many of which are legitimate victims. This point is not really related to the arguments put forth by the article itself, but it still seems like a point that should be made here.
Exactly. Madoff's crimes were despicable because of the way that they hurt individuals and families. The situation with crypto is potentially quite a lot worse than that was. And not just because of the overall scale.
Many individual retailer investors will never recover. This has the potential to do a great deal of damage to the fabric of society.
I’m fairly skilled at making a compelling, cohesive, and even entertaining argument.
I had no effect on any of them.
Luckily, they were all playing with pocket-money amounts. A few hundred dollars or a few thousand at most.
So this crash has done them no real harm and taught them all a valuable lesson. It’s something every generation goes through.
Why can’t I be entertained by it also?
That also seems fine, provided you draw the distinction. (I don't claim to be any kind of arbiter of taste, but you asked, so I answered.)
Have you looked through the responses to the meltdown of Celsius on Twitter? In many individual cases these appear to be ordinary people, in shock at having lost practically everything. All I'm saying is that laughing at people like that seems to me to be in very poor taste.
Michael Saylor and his ilk are definitely fair game, though. Just be sure to leave some Schadenfreude for me!
Which is absolutely terrible and no laughing matter.
I’ve heard that there has been an uptick in suicides.
As an anecdotal data point, my neighbour killed himself recently — he was working (solo) on a crypto startup.
I expect it to get worse before it gets better. I imagine that people in this situation are typically overwhelmed by the shame.
I would also venture to guess that specimens like Michael Saylor don't feel any shame whatsoever, despite making statements about Bitcoin intended to convince ordinary retail investors to go all in at the height of the bubble:
Sadly, some friends of the family became massive believers, and have lost a lot of money, I'm not celebrating that at all.
It’s always someone else’s fault isn’t it? Everyone’s against us is the marching cry of the populist cause.