The older generation of crypto investors benefiting from the 'Trump pump' | Hacker News Reader

The older generation of crypto investors benefiting from the 'Trump pump'

theguardian.com

3 pointsbeardyw7 comments

Unlike stocks bitcoin "investment" isn't used to create value so if you win, someone else loses.

Bitcoin is not like stocks it's more like gold or a commodity that someone has placed value in beyond its material value. When you say if you win someone else loses you need to give a concrete example of that. Because any fixed supply commodity the more in demand that commodity becomes the higher the price is. This does not necessarily mean anyone loses. If I bought Bitcoin at $1,000 or I mined a Bitcoin a long time ago and I sell it at the current rate, who exactly loses? The new owner of those coins can hold those coins and like any commodity it may go up or it may go down. So far the trend is it has gone up on average. So if the new owner holds it and sells it as a profit again who loses?

This is no different than gold. Sometimes gold goes up sometimes gold goes down, but on average it continues to go up because there is a limited supply. Markets are totally about timing. Gold is priced far above its industrial worth as a metal. Gold is priced currently where it's at because people have accepted it as a store of value. Bitcoin is priced where it's at because people have accepted it as a store of value. Like anything priced far above it's real world value.

> so if the new owner holds it and sells it as a profit again who loses?

Have a look at Bernie Maddoff's scheme and see how the mechanics are very similar. In Bitcoin Bernies lifestyle sucking money out of the system is the equivalent of the Bitcoin miners.

Bitcoin is a bunch of musical chairs with a tax that is used to set oil on fire and chuck electronics (asics) in landfill.

The music might stops at $1m a coin. If that happens it will cause a massive recession as people who thought they were paper rich and got in late go back to work and become frugal.

Sure you as an individual could 10x from now until then if you can get up from the tracks before the train comes. But not everyone can by definition of double entry accounting needs to balance to zero, and the fact miners (really, the energy producers) need their billions.

Bernie Madoff and Bitcoin is another false analogy. The closest analogy to Bitcoin is something that people have put value in that is above its material worth. There is no central manager that is taking later profits to pay earlier profits, as in your example Ponzi scheme.

As much as people like to claim that Bitcoin is a Ponzi scheme it is not a Ponzi scheme. The best evidence of this is that we do not know who created it, and we can track the coins in the early coins movement. Yes early people happen to mine a lot of coins and miners today continue to mine a lot of coin but often early adopters get a first mover advantage.

Bitcoin may collapse at some future date but like any commodity that is trading far above its material worth, they all have the risk of collapsing. If people decided that gold wasn't worth it as a store of value the price would crash because the industrial use of gold would not keep it at the heights that it currently is. As a matter of fact the cost of gold currently keeps it from being used industrially where it might actually provide a useful advantage if it was at a lower price point.

Do I wish I would have paid more attention to Bitcoin early on? Of course I do and I think a lot of detractors continue to harp on the same thing that they missed out and therefore it must be some Ponzi scheme that's going to collapse. Maybe but the current evidence says it's probably not. It's going to be the de facto digital store of value for the foreseeable future.

I absolutely did not see the utility you're usefulness or the future of Bitcoin when I first came out but that doesn't mean that I can't understand having a digital store of value that is useful especially after it's been put into practice. I don't understand why people would would pay $400 for a bottle of shampoo, but people do that as well. My lack of understanding does not negate the company selling the shampoos profit margin.

We need to continue with the gold analogy…

So far, we have not detected the effect of someone who can turn lead into gold. Nor have we detected a breakthrough in SHA256 speed.

So far, we have not detected an ambient process in which gold corrodes away in storage. Nor have we detected a crack in SHA256.

The best information about any of those phenomena is that, as President, Donald Trump had access to what NSA knew about gold and SHA256.

But we do have many processes by which gold is destroyed in a way that is unrecoverable or significantly more expensive to recover to make it not viable. We also have government to devaluing gold by not adopting the gold standard and adopting the "full faith and credit" standard instead. So I think this analogy can still apply.

No modern country has any real backing to its currency besides bullets.

Sure. Very few elements can be man made in interesting quantites. Matter itself holds an inordinate amount of energy through E=MC2. There is no alchemy that can produce dog poo from hydrogen, for example.

There is also no way to break Dogecoin or other canine related coins.

Therefore dog poo and japanese dog shitcoins fall under the same category as your argument, whatever it is you are arguing.

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