I watched a friend of mine pump a shitcoin on Binance by buying billboards

I thought leverage was effectively borrowing on anticipated gains. So I would spend $100 to, get credit to the tune of $10k, then buy my crypto with that. But, here we're talking about people buying a coin and the _seller_ saying the coin is worth 100x and so skipping the step of using fractional reserve to 'create' the funds (the loan amount) to exchange for crypto and just going straight to a deceit.

With leverage there's a debt written to counter the credit, here that doesn't seem to be happening.

So, where am I misunderstand the situation here?

The real question is why only this amount of wash trading and why everyone doesn’t do a billion.

Companies can support higher valuations buy owning more stuff, if their market cap is lower than the stuff they own, then they’re clearly underpriced.

If a company starts paying out higher dividends due to higher profits, then their stock is worth more because otherwise the dividend repayment would trend towards zero (i.e. dividend payment per share ends up larger than the share price)

If a company is doing stock buybacks, then they’re using their profits to prop up the price of their shares.

But in all of these scenarios, the companies are producing profits, which are directly or indirectly used to pay for the increase is share value. Shitcoin on the other hand are zero sum, they produce no new value from their existence, they just store value and move it around a little bit.

He is up on every new shit-coin, he spouts a little bit about the world changing proposition, he basically does it because "hes not missing out again".

His idea is to drop $100-$1000 as early as possible (like at the ICO or pre-buy whatever) and hope one of these things 100x'es.

Part of him knows this is a fools game, but he is "smarter" and still doesn't want to be left out yet again.

Dear God, this really does sum up a lot of people running around trying to get rich nowadays.

What percentage of circulating USD is involved in that sort of activity?

It mitigates the issue by making a 51% attack or its equivalent harder.

Outside cryptocurrencies, there is literally no practical application for even an approximate solution for the Byzantine Generals problem.

Outside cryptocurrencies, you can always use a 1970s vintage Merkle tree without the 10000x weight of the blockchain.

I know a guy who owned a sizable exchange at one point in the 2010s. Today he wishes he had never stepped into the world. The real shot callers are a mix of CBOE quants and international organized crime players. The narratives exist for a reason.

I agree that there are other technologies that solve a lot of the same problems cryptocurrencies serve, but I think your search criteria is wrong. You're looking for legitimate users instead of looking for legitimate usecases. Since the tech is new the only legitimate users you're going to find are fanboys and geeks. This is going to tell us very little about real world usages. If we judged a technology's use case by the number of legitimate users then we'd never invent new technologies because there are never legitimate users using technology that doesn't exist (and very few when it is new). So I don't understand your search criteria.

There are many big fin companies investigating and using different cryptocurrencies though. Whether you call these legitimate users or not is very debatable though.

You're alright, we should hang out :)

Cheers

Erm. Wut? Pray tell which economic theory espouses this? The point of inflation (1-2%) is to prevent deflationary spirals. Presuming there is some maximum productive capacity, wages will necessarily go up with inflationary currencies ideally in line or exceeding inflation. Bank interest rates also ideally match the inflation rate.

The only reason nominal wages have remained suppressed in developed nations has been outsourcing. This is not a function of the central bank.

No, that's not at all the reason. Low targeted inflation is to prevent the wild economic swings that preceded central banking as wild inflation and deflation routinely wiped out people, including low income laborers. Take some time with this list of historical US recessions [1]

Virtually zero people hold pure cash as their only wealth, so virtually zero people lose value over time from low inflation. Other goods like real estate, stocks, etc., rise with inflation. Wages rise with inflation. So your low income laborer part getting robbed makes no sense.

The reason inflation target of zero is not used is to avoid deflationary spirals, a lesson learned again over history through repeated painful events.

The evidence on these is so solid every single country, all 200ish choose this system. It's not a grand conspiracy of evil wizard people. It's what educated people choose as a solution to past problems. If other systems worked better for an economy, don't you think at least 1 of 200ish countries would be doing it?

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

Imo a currency that makes those possible has negative value.

Regarding the "fiscal games" by nation states part - in democratic societies those "games" are policy decisions, voted for by the people. I find trying to circumvent the will of the people as expressed in a democratic vote morally questionable, and think that enabling antidemocratic behavior, too, is negative value. (Not to mention that it doesn't work anyways, as you noted).

Ask people if they think a market for criminals to exchange illegal goods and services provides positive value and you'll find that most don't think it does.

Just cause there's money to be made, doesn't mean value is created or otherwise robberies would be quite valuable too.

"well sure its a scam now, but in 100 years from now..."

"Nobody cares matt"

but then it turns out there's an army of crypto fools who repeat any stupid point he makes without reflecting on the value of those points.

It has a terrific history - you must be not counting all the stuff that fails for previously known reasons that people try again. Sure, if you only cherry pick post hoc examples of things that eventually worked, then you can claim a poor history. But the correct evaluation is to pick all things being tried right now by any person on the planet, and measure how many were new and worked for the first time.

You know what does have a poor history? People claiming something will work because they once saw some unrelated thing work and assuming that means all things will work, no matter what the previous evidence.

>barring obvious violations of the laws of physics

Why limit yourself to physics? Those are not the only laws that govern how societal structures work. Also is it possible that the reason some dreams in economics fail because they eventually hit physics? The same works for crypto.

Santa isn't real. Unicorns don't live in the chimney. There is no free energy, despite probably 10s to 100s of thousands of people and inventions that said there were. All those people that found counterexamples to Fermat's Last Theorem were wrong. The list of medical things tried well after they were known to be wrong is astounding, and none of those things will likely ever, ever work. I could go on and on. It's far easier to make up stuff that will not work than to make up stuff that possibly could work or definitely works.

So no, most things that currently don't work will never work, which is how we acquired the knowledge we have - we ruled out dumb and stupid things.

There is a tiny, tiny sliver on the edge that is undecided, and that is where almost all new things and inventions come from. The vast landscape of settled knowledge will stay that way.

So, as to stablecoins, and mostly crypto in general - this is what happens when programmers generally wildly ignorant of the reasons for how modern finance work try to make modern finance. Since they're mostly ignorant of why the system has evolved to where it is over millennia of knowledge, they're simply trying to reinvent all that stuff one destroyed speculator at a time.

The current stable coins imploded as nearly anyone with much knowledge about econ would have guessed. I didn't follow them closely, but one night a friend carefully explained all the processes behind (I think it was) Luna. At one point I told him that the pieces he explained form a dynamic equilibrium instead of a static equilibrium, which means a little perturbation and the whole things goes off the rails. He remarked that my insight, after hearing the details for the first time, was exactly what did happen.

It's funny watching crypto slowly try to reinvent every financial item that failed and do exactly the same things that caused previous things to fail. Stable coins are not new, after all.

It baffles me that people keep trying to do things that are simply dumb, either out of hubris, greed, or ignorance.

Good luck on whatever stable coins you expect to happen. If they keep it up long enough they might eventually invent financial derivatives, but I expect that to be when the world has already moved past those and found yet better products.

USDC does nothing, zero, nada, that literally hundreds of places tried over the past 200 years.

It will fail, for the same reasons.

That they haven't imploded over 4 years with tiny usage is not special.

It is fascinating how they've changed their claims over time, and are no where near transparent on what backs them at the moment. Good luck with yet another repeat of bad ideas.

DAI has not even stayed pegged to the dollar over it's few year lifetime. I don't know how you call that spotless.

It requires suspended disbelief to claim these things.