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Comment by tptacek | Hacker News Reader

This casually written comment sums up most of what I think of cryptocurrencies in general.

If you'll permit me to put words into your mouth, I think that you're expressing your disdain for this mindset.

Currency needs to be stable in order to have long-term prospects. The dollar is stable because everyone believes that the dollar will be around in some shape or form in 10, 20, 50, 100 years. I'm currently investing in a retirement fund whose outlook is focused on 2055. Many other people are doing the same.

If you don't have this stability, your currency isn't really a medium of exchange; it's a commodity to be speculated on. And, well, as long as you GTFO of the commodity, it's perfectly fine if its value plummets or goes to zero. But something of this form will never become a currency because everyone thinks like this. It's just going to be a way for smart people to separate fools from their money.

The root comment on this thread wasn't taking advantage of the instability of Auroracoin; it was taking advantage of a gold rush of other opportunists and the certitude (reasonable, and, as it turns out, correct) that the Auroracoin experiment would fail, leaving anyone who bought and held the instruments holding the bag. In other words, a pump-and-dump scheme.

Is it similarly immoral for an investor to put money into a startup that they "know" (highly suspect) will fail?

No one knows what will happen, even if they claim they do. The options aren't only "know it will go up" or "know it will go down". That was my point that you were so dismissive of.

That's an interesting and, I think, complicated question. It's easy to uncomplicate it though; for instance, posit that the "investor" not only "invests" but also talks the "investment" up. Deliberate deception for profit has another name: fraud.

I think that's what a lot of these alternate cryptocurrencies are doing. People get in early and hope that there are enough fools who get in late to sell their massive holdings to them. Then these same people try to do the same to other people down the line. Eventually, it becomes clear that there are no more people to buy into the alternate currency, and the entire thing shits the bed.

I'm not sure where you draw the line between a "currency" like this and Bitcoin, but I think it's important to look at what the bulk of transactions are for. Bitcoin, despite rampant speculation, is still used for some things - avoiding Paypal, drug transactions, etc. Litecoin is more on the speculation side, but still has a fair amount of use. Dogecoin has its use on Reddit. But a lot of these other coins are only for speculation, and it's basically gambling to put money into them and hope that you get out before everyone goes "Well, that's all, folks! We're done here!"

What I love about cryptocoins is that so many "book smart" people hate them. Bringing up the topic is an awesome way to find out who's stubborn and closed minded.

Lately I've been using this topic as my "VC test" to decide what VCs I want to work with in my company's next round of investment, and my startup has nothing at all to do with cryptocoins :-)

My comment was subtle perhaps to the point of being cryptic, but there was actual logic to it. Even if I was a believer in cryptocurrency, the comment I responded to was problematic.

Your comment, on the other hand, simply asserts that anyone who hates cryptocurrencies is "stubborn and closed minded". That might be true, but for such an inflammatory argument, you probably want some evidence to support it.

Good luck with A16Z. :)

So there's logic behind the emotion, eh? :) Something eliminates the unknown and just leaves clear facts and logic? Yes, this is perfectly what I mean.

I'm most impressed by the very smart man who is able to say "I just don't know". Book smart people you'll meet will usually reduce their world down to just 2 options: good or bad, will succeed or will fail. Where's the 3rd option? -- unknown, unknowable, we will see, no emotions because I just don't know.

Admittedly, for most of my life I was never able to find a reason to believe that this 3rd option is a real thing. I always felt that "unknown" is just a temporary placeholder and that the answer is always really there, somewhere, if you're smart enough to see it. Never in all of my schooling was "unknowable and there's nothing we can do to find out" a legitimate answer.

Well, I'm not telling anyone how to think. I'm just fascinated that some people think in these 2 modes, and some in 3.

If you understand the logic I was employing, your comment gives no sign of that. Epistemology is fun, but it's a tangent.

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