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Comment by empraptor | Hacker News Reader

and this is part of why i think cryptocurrencies should have died before large number of people wasted their money on it. for the average user without the time/knowledge/patience to handle cryptos "properly", the choice is between losing money while handling this shit yourself or losing money while trusting someone else to do it right.

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Its an entirely free market. Just because one person doesn't understand the tech and loses his money doesn't mean that everyone else shouldn't be allowed to use it either.

Even if you don't buy into the crypto vision (I don't), a digital-only currency that isn't tied to any nation-state does deserve to exist.

It’s fine for a few people to play with such a system. The issue if it’s absolutely clear crypto is incapable of widespread adoption or just about anything else people hype it up as, then it shouldn’t be hyped as if that stuff is a possibility.

I could never tell how much was incompetence vs fraud, but either way without the hype vastly fewer suckers would be holding the bag right now. The crypto ecosystem has been just been terrible for just about everyone and things are far from over.

The people holding the bag right now mostly got in because of the allure of quick profits. And if they didn't sell even after making incredible (paper) returns, they have their own greed to blame.

Bitcoin was $6,000 in March 2020. It hit $63,000 in April 2021. And if you didn't sell that top, it hit $67,000 again in November 2021.

Even now, it has dropped less than Netflix, a supposed bluechip.

I don't know what's the scam in this - you had plenty of entry opportunities and plenty of exit opportunities. The underlying system itself still works exactly as described.

I lost nothing, but I can empathies with people who are screwed.

It’s not that Bitcoin or any alt coin has X paper value right now, it’s nobody can get out without someone else getting stuck holding the bag. The underlying system is predatory because mining isn’t free so it’s a negative sum game where people have already cashed out.

I remember being saddened when it was less than 1/1,000th isn’t current value I realized how many suckers where lining up for the fleecing. I briefly thought the odds are very good it’s going sky high, but I didn’t want to be part of someone losing their retirement when things eventually fell apart.

Wait a minute. You decided not to invest early, despite expecting it to be massively profitable because you were worried about the morality of allowing less competent people to try the same thing in future? Are you sure that's really the truth and you weren't just too hesitant and now you regret missing out so you've gone all salty?

they said odds were good, but maybe they're not much of a gambler. and sounds like they views cryptocurrencies as being something akin to scammy MLM or Ponzi scheme rather than an investment.

i haven't bought any myself. i just enjoy reading tech and economics stories in general so i've been reading about cryptocurrencies since 2013 or so. but i don't intend to buy any unless one fulfills some need i have better than other solutions. and i certainly don't intend to hold onto any if i can help it.

Almost, I wasn't worried about people trying to time the market. I was worried for the suckers who actually believed the hype.

Look morality is only meaningful when it comes at a cost. I sincerely hope you are discouraged from scamming, robbing, kidnapping etc because you think it’s wrong rather than insufficient gain to be worth the effort.

> nobody can get out without someone else getting stuck holding the bag

That's true for practically every asset class. If you sold your Netflix stock at $600, someone had to buy it at $600 as well. And now they're out of $430.

There's a losing counterparty in every winning trade.

With stock though there's a company associated with the stock that (theoretically) brings in profits. Predicted future profits drive the stock price.

>That's true for practically every asset class

No, this is false. With stocks, the holder can get paid in dividends. With real estate, you gain value from actually using the land. A bond is actually a form of credit. Et cetera. Which other assets are you thinking of?

Edit: You must be conflating it with the funny money private stocks and their buybacks that a lot of startups have. Those are obviously a gamble, they're not really "investments" for most participants. It's no surprise that the same type of companies tried to go deep into ICOs a few years ago which are like the crypto equivalent of a bogus penny stock.

it's better to be bit more pedantic.

> There's a losing counterparty in every winning trade

the counterparties are equal in every trade; any winning takes place afterward in the future

and if one party is selling a publicly traded security or commodity at a loss, that doesn't mean it wasn't a good investment, it means it was bought at a fair price and conditions changed

Most Ponzi scheme victims got in because of greed. That doesn’t absolve the con artist for running one though

> That doesn’t absolve the con artist for running one though

Who are you going to prosecute in this case? The developers of Ethereum who are making a digital peer2peer smart contract system and have no interest in running a ponzi scheme?

Are you going to arrest Bram Cohen for inventing Bittorrent for what happens on it? What about the people behind Tor?

In the case of a literal Ponzi scheme it is pretty obvious who to prosecute. In the blockchain space many players have figured out ways to avoid being prosecuted for their schemes (many of which are little more than outright scams), but that doesn’t make what they’re doing ethical

You missed my point, they're building a decentralised smart contract system, there's nothing in the Ethereum smart contract code that says you must build a ponzi.

Can you tell me where the Ponzi is on this page: https://compound.finance/

> The people holding the bag right now mostly got in because of the allure of quick profits. And if they didn't sell even after making incredible (paper) returns, they have their own greed to blame.

Isn't that how fraudsters justify their tactics?

Watch it be the reason we get tripped into a recession or some other ponzi-scheme-infused crash.

Crypto isn't big enough to do that on it's own.

    Crypto isn't big enough to do that on it's own.

It would make for an interesting black swan event. :)

Not a free market. An unregulated market.

"Free market" in the Smithian sense is not what we have here.

I mean, this very much sounds like there's no such thing as fraud in a free market

The market adapts to make secure access more convenient. The best solution devised so far is hardware wallets, which mostly insulate someone from hacks emanating from their computing device being compromised.

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