[IAmWorried]

It's less that I'm glad the market is crashing, and more that I'm glad that the insufferable crypto bros are finally getting a punch to the mouth. Seriously, these people are the worst. Your average "crypto investor" has no skills, no mathematical foundations, nothing. Except for pure stupid luck, and the ability to spew inane crypto babble 24/7. And yes, they think they are much smarter than you, because they achieved better financial results than you did while only doing 1/1000 of the work to get there. I truly hate the fact that these people are so rich. It makes me want to move to Alaska and just try to ignore society for the rest of my days.

This came off as pretty bitter. I apologize, but I am bitter, and I'm having a shit couple weeks.

[UnpossibleJim]

I will preface this statement by stating that I know nothing about the stock market and let my retirement account be handled by an investor...

What real math is involved in predicting the stock market? I understand there is a lot of theory behind TRYING to predict it, just as there is a lot of study in trying to predict trends in the stock market, which is why you are better off investing in groups of stocks as opposed to a singled stock (there you go, that's the grand total of what I know about the stock market). But so far as shorting stocks (betting that they'll fall) and buying stocks (betting that they'll rise), there isn't much real math, is there? Isn't it all just a gamble? Not even a statistical gamble, like dice or cards, but a public market analysis with the uncertainty of public trading and public sentiment thrown in, not to mention the hope of government bailouts on occasion?

I don't see a huge amount of difference in crypto except for physical assets, which don't cover the stock price for public companies, generally.

Now, how horribly wrong am I? I'm willing to admit I missed the mark, entirely as I don't understand trading. That's what my broker does.

[MattyMc]

> What real math is involved in predicting the stock market?

I have a MSC in Statistics, studied quantitative finance. Generally I'd agree with you. For general investing there's often little math involved other than some simple ratios and comparisons. Three numbers I look at most often are the Price-to-Sales ratio, Gross Profit %, and annual revenue growth. There's no complex math involved here at all.

Where investing does get mathy is in calculating risk. When constructing a portfolio, generally the aim is to maximize returns while minimizing risk below some threshold. There is some very interesting and fun maths involved in this process that is beyond the scope of general investing.

[CuriousSpider]

Would you be able to recommend any online resources or books on the more complex math? It sounds interesting.

[surfpel]

> There is some very interesting and fun maths involved in this process that is beyond the scope of general investing.

Are there some search terms or resources you would recommend looking into to learn more about this fun maths?

[scoofy]

Nassim Taleb's academic papers are all about the fun math of risk-management. He basically invented the barbell/butterfly strategy which is effectively a "normal distribution risk profile" to "students t distribution risk profile" arbitrage, where you are making a big bet that the market underestimates both the downside risk and upside rewards of equities in general.

Very bizarre strategy, but really, really interesting.

[UnpossibleJim]

Awesome! Thank you!

[FabHK]

Look at the CAPM for the financial content, and mean-variance optimisation for the maths. It's basically minimising a quadratic function, but in many dimensions, with two constraints - the efficient frontier. You use Lagrange multipliers and arrive at a neat linear system.

Lots of fun parabolas and hyperbolas :-)

[UnpossibleJim]

Awesome! Thank you!

[UnpossibleJim]

Thank you, so much =)

[skrtskrt]

The math that most investors (not traders) use isn't necessarily about trying to predict the market, at least in the short term - but to get signals like "this company is over/undervalued compared to competitors or compared to the size of market its targeting" etc.

These types of analysis don't necessarily predict anything on their own especially in the short term, though they likely do have value in the long term when you stack up lots of these signals.

The problem with applying math to crypto investing (not trading) is that there's no market, no sales, no cash burn rate, no actual accounting going on to base a longer term thesis on.

[piva00]

Exactly, the industry of trading relies on building good models. Running analysis to uncover more data points is part of it.

[epolanski]

> What real math is involved in predicting the stock market?

Are we really comparing the two markets?

Owning a stock means owning a piece of a business. If you have all the stock in the world, you seized all means of production, good job.

If you own all the UnpossibleJimCoins in the world what exactly has changed? Oh but that coin is not insert another coin, it doesn't have the consensus/cult.

[vinay_ys]

Owning a stock is not the same as having controlling interest in the business and being able to take home your share of profits (or suffer your share of losses) from the business. It is interesting how the mind works to confuse these two things.

Also, in the limit, if you owned all the stock in the world, you have destroyed the stock market.

Because ultimately, stock market is about speculating the future potential of the business and pricing it into today's stock price and more importantly having someone believe that and be available to buy from you at that price. So, it is a sophisticated collective story-telling-belief-system based on imperfect and asymmetric information using fancy mind-bending jargons. By having some regulatory safeguards, it is lent an air of legitimacy but really only the crudest of scamsters are stopped.

[hash9]

What are you on about? If you own all the shares of a company, you own the company, that's how hostile takeovers can happen. Usually shares come with voting rights, dividends (share of profits) etc. You're right about the price speculation though.

[MagnumOpus]

> Also, in the limit, if you owned all the stock in the world, you have destroyed the stock market

Dead wrong, and indeed that is the difference to crypto.

If you own all Bitcoins in the world, it is worth nothing and your net worth is zero. If you own all stocks in the world, you can direct all of those public companies to pay a large chunk of their profit to you every month in dividends, and make those companies do whatever you want them to do (research a way to build a Mars colony, or build better fusion reactors or pay off politicians to do your bidding), which is real power and real wealth.

[vinay_ys]

You are missing the emphasis on the market in stock market. By buying all the stocks of a company, you are basically taking company private – you own the company but the market for its stock is gone – and the value of what you own is the book-value of the business and access to its free cashflow. You don't own an instrument that gets you multiples on that anymore. Stock market gives you a multiple on the book value.

For example, if Elon Musk owned all of Tesla he would have access to $3.7B of its annual free cash-flow or $3.3B of net income. He won't be able to afford to buy Twitter with that. But because he has Tesla stocks which gets a huge multiple on those metrics, he can pledge a fraction of his fraction of ownership in Tesla to get a huge loan with which he is able to buy Twitter (and still enjoy his ownership rights of Tesla stocks!). That's because of stock market.

[capableweb]

> Owning a stock means owning a piece of a business

That is clearly not true. What you own, is something worth X amount of Y, where Y is what other believe it is worth.

"Means of production" has a very specific meaning and what you're saying is not it.

[bickle66]

Actually, it is true.

When you buy a share in a company, you own a slice of that company. You have voting rights, access to shareholder meetings, annual reports, bod meetings etc.

What that share is worth is what others perceive it's value. what it's market "worth" is completely irrelevant to the fact you own a share.

[somenameforme]

You own voting rights, that's it. The recent Twitter stuff emphasized this. Some people were wondering why they can't just refuse to sell their stock (if the deal passes the various requirements, which includes a shareholder vote) if they don't want to. The reason is because they don't actually own anything, just a vote. If the company as a whole decides to go become a new entity (going from public to private in this case), the entity you owned a vote in no longer exists.

In an increasingly large number of companies even this notion of a vote is a facade. For instance at Facebook and Google, Zuckerberg and Larry/Sergey would maintain majority control even if you bought all the stock on the open market, because of stock tiering. So when you buy stock in these companies you're practically not even buying a vote. I mean you technically are, but it's like participating in an election of with 100 other people, where one guy gets a vote that magically counts as 101 votes.

That why things like the occasional 'share holders look to force Zuckerberg out' type articles are 100% clickbait. Google and Facebook also even tried to force scenarios on shareholders where the real owners of the company were going to "sell" their shares without giving up control by introducing non-voting shares. These plans were only stopped thanks to the courts because they, of course, passed a shareholder vote. [1]

[1] - https://arstechnica.com/tech-policy/2017/09/shareholders-for...

[lostcolony]

Actually, the Twitter stuff emphasized just the opposite - even after the board agreed to the sale, a majority of shareholders (well, specifically, a majority of the voting power as determined by shares) still had to agree. And because they did, Musk is on track to own Twitter.

Facebook also demonstrates it - Zuckerberg and a few others (many of whom have given him voting power on their behalf) own 'Class B' stock, which is worth 10 votes (and thus could reasonably be treated as each share being worth 10 of Class A shares). What is sold to everyone else is 'Class A' stock worth 1 vote. Despite owning fewer stock shares, then, Zuckerberg has more votes and thus has effective majority control.

You mention due to stock tiering, but that's just it, those tiers don't remove votes, or even owning a share of the company (your stock still does), it just ensures that majority control stays in the company's control. It doesn't change the claim that stock shares = shares in the company. It just changes the percentage each stock is of the company, so it's not as simple as 1 stock = 1/(# of outstanding shares) control, but it still is (100% stock) = (100% control), and (X% of voting power from stock) = (X% of control).

[lostcolony]

Yeah - any corporate takeover is via stock acquisition. That's how Musk is buying Twitter; he's buying all the outstanding stock. "A share" of stock is literally "a share" of the company.

[conorcleary]

Branching off, what I feel is more important is that in brokers like Robinhood you don't even OWN the underlying security of your investment; you're renting it. Not even that... you're being lied to about owning it.

[throwawaytemp27]

What are you talking about?

[zrail]

In the US stock ownership is ... complicated. Effectively all shares in all public companies are owned by the Depository Trust & Clearing Corporation[1].

When you buy a share of a company, you hold that share at a broker. That broker in turn uses a clearing company which then in turn moves shares around between accounts at DTCC on a net basis between brokers. The only company in this chain that knows what shares you own is your broker. To everyone else in the world your share is held by, for example, Fidelity or Vanguard.

You retain every economic right to the share, you just don't _technically_ own it. This gets more complicated with margin accounts, where as part of the margin agreement you agree to allow your broker to lend your shares to shorts, so for some periods of time you may not actually own the shares you think you own.

[1]: https://en.wikipedia.org/wiki/Depository_Trust_%26_Clearing_...

[2muchcoffeeman]

That doesn’t sound right.

The obvious example being a hostile take over. One can literally buy up more of a company than anyone else and then attention to take control of the company. One defence being too literally discount shares for existing owners so they can buy up more of the company.

We just saw this happen with Twitter.

[conorcleary]

Relevant XKCD - https://xkcd.com/927

[FabHK]

> What real math is involved in predicting the stock market?

1. Stock market valuation has a fairly tidy theoretical foundation that is not too much use in practice for prediction. (It is used for IPOs etc. in some form, when a market price hasn't been established yet.) It involves basic algebra, along the lines of sum_t=1^infty D/(1+r)^t = D/r, etc.

Fisher Black (of Black-Scholes fame) memorably wrote: "An efficient market is one in which price is within a factor 2 of value", where price = market price, and value = true value, as determined by that tidy formula assuming you had all the correct inputs, which you don't.

2. Similar for FX and Rates, though there is a bit more to it.

3. In derivatives, you have much more sophisticated maths (stochastic processes, Ito calculus, PDEs, Monte Carlo). Its focus is not so much prediction of the future, but a) deducing the true current state of the market from observable prices, and then b) from that true state deduce the price of derivative products, and c) computing risks (partial derivatives), which then lets you d) synthesise these derivative products. But that's not very relevant here.

4. Trying to predict the market is a whole other ballgame. You can work with time series analysis, regression and more sophisticated statistical methods and ML, and use any number of inputs: price history, company fundamentals, macro fundamentals, text/sentiment analysis, order book (market micro structure), etc.

Funny thing about this business is that there's a lot written about it, but those that have figured it out use it to make money, and don't write about it.

5. Now, cryptography involves real maths, but entirely different again, mostly number theory (such as n^p = n (mod p), for p prime).

GP might have been complaining that many vociferous crypto bros lack the basics to understand the mathematical foundations of cryptography. Though, I must say, I think one can understand e.g. hash functions and asymmetric encryption etc. quite well from their functionality alone, without needing to understand the math behind it (just as you don't need to understand transistors to understand what a NAND gate does).

[logifail]

> What real math is involved in predicting the stock market?

Given the apparently inability of active funds to routinely outperform passive funds[0], "not much" would be my response.

One could be really cynical and reduce it to: some people get lucky, some of the time. That's all.

[0] https://www.ft.com/content/06317e0e-b6bf-4fdc-9255-cf664cb92... ( https://archive.ph/NumMp )

[DeathArrow]

>Given the apparently inability of active funds to routinely outperform passive funds[0], "not much" would be my response.

Renaissance Technologies and Two Sigmas are just two examples of firms that constantly beat the market using math, algorithms and machine learning. It's doable, but not easy.

[Kranar]

It's silly to say Two Sigma consistently beat the market. They have multiple funds and only one of their numerous funds (Two Sigma Enhanced Compass) has managed to outperform the S&P 500 over a 5 year period, the rest have significantly underperformed.

[lbrito]

Until the day they don't.

This kind of thing is inherently un-provable. You can have a method that works stupidly well for decades, and then it stops working. Building a model that provenly (in the mathematical sense) works with X% efficiency would be akin to building a free energy device.

[nightski]

It's very likely you put your life on the line every day with things that can't be proven. That is engineering after all.

[logifail]

> your life on the line

Your life at 0.00000x% risk is one thing. I'm fairly relaxed about that.

Your capital at - say - 50% risk of total loss is another. I don't play that game.

[napoleon_thepig]

This is just... wrong, to put it mildly.

When it comes to serious financial modeling in big firms, everything from PDEs and stochastic calculus to cutting edge forecasting models and deep learning is fair game.

[logifail]

> fair game

Ummm, not really. If it were readily predictable, then <ooops> it actually couldn't be predictable.

We simply can't all be making money all the time.

[DeathArrow]

>I don't see a huge amount of difference in crypto except for physical assets, which don't cover the stock price for public companies, generally.

Stocks represent part of real businesses which produce real goods or real services. So they are tangible.

Crypto are just some bits somewhere. They don't represent anything meaningful.

[id]

Technically, stocks are also just some bits somewhere. Ownership in general is just an agreement. If you own a house, it's only really yours as long as people agree that it's yours and respect your ownership.

[vladoski]

Is a "dollar" tangible? It's just a number on a paper.

[jfengel]

There is a very large organization out there who pays in those dollars and demands taxes in those dollars. If you want to live in a certain piece of dirt, you will deal with that organization.

That dirt is very tangible. So is the vast organization running that dirt: it builds roads, runs a military, and (in extreme cases) sends out people with guns if you don't pay those taxes.

That makes those dollars pretty darn tangible.

[robobonobo]

I think the point being made is that we assign a value to arbitrary things. People often cite cryptocurrency as not having real tangible value but the same could be said about anything we collectively assign some value to it.

I'd further argue that nothing truly has tangible value because by definition, value is an intangible concept. The question isn't whether it's tangible, but whether its value to risk ratio is good enough for you.

[peyton]

Well, unless we’re talking about shares in a SPAC, which is a few pieces of paper filed with the State of Delaware’s Division of Corporations…

[throw1234651234]

It's important to understand that your average Series 6,7,63-licensed "investment advisor" knows less about the stock market than your average crypto bro. They just follow a script of "invest into retirement-target fund over the long term". None of them adjust anything based on market conditions unless you get into "family office" territory at (at the very least) over 100 million in assets. A lot of people make the mistake thinking "investment advisor" bros know anything.

- former "investment advisor" with all those licenses, CFA, etc

[nurettin]

I write execution systems for hedge funds. Don't have fancy quantstatistician titles.

Stock market has something called "fundamentals" which gives you insights into the real value of stocks. If a company invests $1bn to develop their business, their value will go up. Major oil producer goes to war? Crude oil futures will go up. 100% every time. It is not rocket science, and no astrology is involved.

It is what people do that turns it into a gambling machine. They try to predict tomorrow's price by looking at chicken entrails and they get cocky and confident during bull runs. This behavior is not restricted to the crypto space.

[dragontamer]

> But so far as shorting stocks (betting that they'll fall) and buying stocks (betting that they'll rise), there isn't much real math, is there?

A lot of the math is automated these days. PE ratios, SMA (simple moving average), etc. etc.

The basis of most stock analysis is price per earnings, or also known as "How much does $1 of profits cost?". Ex: PE of 20 means that it costs $20 to buy $1/year of profits. PE of 100 means it costs $100 to buy $1/year of profits.

Using this as a baseline, you can estimate the future performance of many stocks. You then correct for public sentiment, bailouts, supply changes (are chips getting rarer and/or more expensive?), and try to predict _future_ profits, not just historical profits.

The company with the most profits, at the lowest price, wins in the long run. Buying $100/year worth of profits for just $1000 investment is better than buying $100/year worth of profits for $50,000.

But the "math" is easy. You just take the profits from last year, then divide it by the #shares * $value of the shares. You can also try to be "forward-PE" by predicting next year's profits and dividing it with today's #shares * $value of shares.

-------

The #shares changes over time. Companies can make new shares or "buyback" shares at any time. That is why when you hear about company "share buybacks", the stock goes up (fewer shares means lower PE, meaning the people who are buying the remaining shares get more $profits per $investment).

-----

EDIT: Note that under this theory, it doesn't "matter" what the company does with its profits. Profits can go back to the investors through dividends. Or, profits can be spent back on the same company through Capital-Expenditures (ie: building bigger factories or larger systems). "Growth" companies issue no dividends, because they "recycle" all profits into growing. Or the company can buy another company with the profits. Etc. etc.

While "Value" companies tend to return the money as dividends to the share holders.

Shareholders don't really care. If the profits are given to the shareholders, then shareholders can buy up more of the stock (growing their %ownership, and they themselves get more % of the profits next cycle).

If the profits are invested into itself, then shareholder value goes up as appropriate (instead of $1-million worth of factories, next year the company is doing everything with $1.1-million worth of factories and gets 10% higher profits all around).

If another company was bought, same thing, except the factories are separated by different names / locations.

Of course, the "details matter". Some industries are better suited for growth than others. But the fundamental assumption is "control more profits for fewer dollars".

-------

EDIT2: Anyway, what ends up happening is that the math-part is easy. Its the prediction part that's hard.

[dionidium]

I'm not gloating just yet. If you bought Bitcoin at literally any other time than the two peaks that have occurred over the last year, then you're still way, way, way up. Bitcoin was last at its current price between those two peaks, a little less than one year ago. Of course, NFTs and all that were just so obviously nonsense that I don't even think it's worth commenting on.

[joecot]

As soon as it was clear that Bitcoin was going to be a commodity instead of a currency (why use it as a currency to buy a pizza this week when it could buy you a car next week?), it was clear it was now a pyramid scheme. That's why I didn't invest in it. What I hadn't counted on was how gullible people were for pyramid schemes.

[TameAntelope]

I wish we had a better phrase than "pyramid scheme", because IMO anything that's a "scheme" has people who know better at one end, and I really don't think there's anyone involved in crypto that is deliberately "winning". What's a phrase for when everyone is getting scammed, and not by any one person, but by an idea? Where there are no winners, only lucky and unlucky.

Pyramid trap? Pyramid quagmire? IDK, but "scheme" implies something I don't think is there - control.

[ogogmad]

Speculative bubble. Or just bubble.

People buy it because they expect the price to go up. The price goes up so more people buy it expecting further gains. The fundamentals arguably don't justify such a high price, and so you have a speculative bubble. Eventually, the bubble will pop and most investors will lose money.

I suspect BTC is a bubble because everything it does can be done better by other things. I also suspect that Lightning is fundamentally insecure. If you analyse the true intentions of the people who use it, there's no sober purpose; they just want it because they expect the price to go up. It's not about helping the developing world; because if it was, then there are better but more boring ways of doing it. Hence, it's a bubble built from speculation.

[wongarsu]

I agree that BTC has little inherent value, it hasn't turned out all that useful. Even if you believe the advantages of crypto are worth all the disadvantages there are blockchains that are much better.

But similar things can be said about many things, and some commodities are able to sustain their bubbles for decades or centuries. Gold is going strong for millennia, with a price far exceeding its practical value. BTC probably won't last that long, but unless it's disrupted by legislation it might still have decades left in it.

[eric_cc]

> I agree that BTC has little inherent value

The bitcoin network is extremely valuable. Trustless money is important in a world where all other currencies are created, controlled, and manipulated by governments. We know humans are prone to make poor choices, commit crimes, etc. Especially governments. Why do we allow them to create money when and how they want?

[eric_cc]

> People buy it because they expect the price to go up.

Some* people buy it because they expect the price to go up.

Other people are switching to bitcoin because it is better money than their local currency.

> everything it does can be done better by other things

Like what? Trustless transfer of money governed by a protocol that is highly decentralized and secure.

[ogogmad]

> Other people are switching to bitcoin because it is better money than their local currency.

USD, EUR, GBP and CHF are less volatile. The countries that manage them all have good credit ratings. Compare to BTC which has lost >55% of its value in the last 6 months. And you're calling that a currency?

Using safe fiat, or even gold, would be the "boring" solution because it doesn't go up in value much. If anything, it slowly loses value, but nothing among those 4 beats the >55% / 6mo drop of BTC.

If you're concerned about inflation, a finance expert might give you a "boring" lecture on how to counter it.

Maybe there should be a guide to the "boring" solutions to the problem that crypto supposedly solves in an "exciting" and (for now) lucrative way.

[zeven7]

> What's a phrase for when everyone is getting scammed, and not by any one person, but by an idea? Where there are no winners, only lucky and unlucky.

The phrase is "financial market"

[Ekaros]

Mania or bubble. I don't consider crypto market overall to be any type of scam or scheme. Just like I don't consider stock, or housing market to be one. Even if there is insanity, scams, schemes and fraud inside all of them.

[InitialLastName]

At least in theory, stocks and housing are underpinned by intrinsic assets (i.e. things that exist in the real world and/or intersubjective agreements whose value and status are enforced by people with guns). Crypto doesn't have that quality even hypothetically (except to the extent that people insist it does), which pushes it toward the same category as many of the well-known financial scams (which were characterized by people obscuring the lack of assets propping up the value of the scheme).

Edit: I was being overly general with the term "pyramid scheme"

[Ekaros]

I would only use pyramid scheme to mean rather specific structures. Like many MLMs are, where revenue and profit for individuals is generated by their recruitment activities and so-on. Not in general getting more people in a bubble. Just like Ponzi is centralized system where central actor pays out to old investors with new investors money. Not an open market where anyone can enter and leave at any time.

[eric_cc]

> Crypto doesn't have that quality even hypothetically

And does paper fiat have intrinsic value?

Bitcoin is trustless money. It's mindblowingly amazing that we now have trustless money. We've never ever had that before. That is the value.

[joecot]

I would call it something besides a pyramid scheme if the people who got in at the bottom didn't then turn around and endlessly proselytize for crypto -- not because they think it's actually great, but because they can't take their money out unless some other poor sucker buys in. At the point where crypto bros are paying Matt Damon to say you're not a real man unless you buy their crypto, it's a pyramid scheme.

[amirhirsch]

crypto mania, similar to tulip mania.

[naravara]

I guarantee you all the institutional investors and big finance invested in crypto absolutely do know better, and they know they have better quality information and the ability to respond to it faster than the masses of "retail" investors. So they will be on the winning end of the bubble burst at the expense of the schmucks on Twitter.

[gcheong]

Greater Fool Theory maybe: https://en.m.wikipedia.org/wiki/Greater_fool_theory

[ChikkaChiChi]

I think "crypto meme scheme" or something to that effect

[acka]

A fad basically, fits the dictionary definition pretty well IMO.

[oceanghost]

The phrase is I think, "Greater Fool Theory".

[vannevar]

>...I really don't think there's anyone involved in crypto that is deliberately "winning".

I believe that bitcoin began as a straightforward "pump and dump" scheme, dressed up in a techno-libertarian narrative to appeal to its intended marks, young tech males with disposable income. As the size of the market has grown, I suspect the original cartel holds a smaller percentage of the outstanding supply, but I'll bet it's still enough to move the market deliberately when they choose.

[Ekaros]

I don't think it began as such, but as idealistic toy or proof of concept project where no one actually run the numbers to end goal. Then at some time it went to get rich quick loop, with some ideologues in mix.

[eric_cc]

Late stage bitcoin is:

It's trustless, sound money and therefore better than my bullshit fiat.

[frogpelt]

A house of cards?

[pmcp]

Betting?

[Ekaros]

I could have made relatively decent chunk of money if I had just kept the little I had... But I'm really just too risk averse and believe in sanity that the things wouldn't actually go anywhere. Specially not to the 100x from point where I was.

Then again, I also think most tech stocks are just stupid. Especially Tesla, but thankfully I'm not either betting against them. Let's see if I'm proven correct in long run.

[noxer]

People with this kind of "risk tolerance" usually dont take a risk even tho it would probably be totally "sane".

If you think about it, many people make several million dollars over their life time but see it as to high of a risk to put 10k into something that could go to zero but it also could go to 100k or even more. That does not make much sense. The question should not be "should I risk the 10k? The question should be "am I in a financial position that allows me to lose 10k?" If the answer is "Yes" then consider doing it, you will not miss the 10k at the end of you life but you will remember what you did with the 100k if it happens.

[giaour]

> many people make several million dollars over their life time but see it as to high of a risk to put 10k into something that could go to zero but it also could go to 100k or even more. That does not make much sense. The question should not be "should I risk the 10k? The question should be "am I in a financial position that allows me to lose 10k?"

I see where you're trying to go by framing a loss against lifetime earnings, but I think that could lead some investors to mislead themselves. Someone who is willing to bet 10K on black at the roulette table is almost certainly going to gamble more than once in their lives. The question should be, "am I in a financial position that allows me to lose 10k right now, and can I trust myself to walk away from the table if I do lose?"

[noxer]

Obviously I didn't not attempt to cover ever possible case and personality you can think of that wasn't the goal anyway. Someone who gambles doesn't fall in the category of "risk intolerant" anyway. Beside that in "traditional" gambling the odds are against you so the whole risk/reward ration is out the window and "only a small lose over your whole lifetime" doesn't change this.

I would never encourage anyone to just trow money any anything that could potentially somehow give you more back. Roulette, lottery etc. are all statistically against you and you have zero way to choose clever or otherwise affect the outcome in your favor. Buying something with speculative value is completely different and it certainly is a good idea to actually inform yourself first about what yo buy. If you subjectively think the chance of loosing everything is over 50% I would look for something else after all the goal is to not lose so it should not be a blind throw it should just be something with high risk AND high reward.

I know someone who intentionally bough some rare apple device for like 1.1k. Fully aware that it might be worthless soon or break and loose most of its value. But it had a realist chance to gain value and it did, he sold it for over 10k 5 years later. Thats about +800% a risk/reward ration that does make sense.

[logifail]

> but see it as to high of a risk to put 10k into something that could go to zero but it also could go to 100k or even more. That does not make much sense

You could walk into a betting shop and put 10k on all kinds of things that will most likely go to zero but have a finite probability of going to 100k or even more.

Q: How do you suggest determining the odds of success? Most of us can't invest in every 10k opportunity (and even if we did, we might not win out in the long run)

[noxer]

If the odds are obviously against you its not useful ofc. If you think there is a 50% chance you lose everything then you should also see a 50% chance that you make over 100% profit if that is not realistic its probably not the right thing.

[logifail]

> if I had just kept the little I had... But I'm really just too risk averse

I don't think it's about risk, it's that if you hold stocks or crypto or many other kinds of investment, and your holding is worth $x right now, if you're a believer in the efficient markets hypothesis, you have no real idea whether it's going to go up or indeed down in the future.

I bought a house because it's a place for our family to live, not because I belive it's going to appreciate in value. If you buy ten houses, you need to have information - or sheer belief - that your investment is going to pay off.

[nobodyandproud]

There is a different interpretation: Crypto enabled tax dodgers and black markets.

It’s a use case I didn’t consider a decade ago.

[joecot]

There is also this, and it's one of the things that propped up Bitcoin at the beginning. A large chunk of the Chinese drug black market ran on bitcoin. In many ways the cryptocurrency boom was the 21st century's opium war.

[Ekaros]

Black markets are also interesting question. How high coin value you actually need for them to operate? Certainly not tens of thousand, probably a few hundred would still be enough. If crypto was token for exchange.

[nobodyandproud]

I don’t know.

If you’re exchanging weapons or illicit drugs (nation state) it can easily be millions.

As a run-of-the-mill software engineer, its a world I only have a passing knowledge on.

[nwiswell]

I'm not clear on the logic here to be perfectly honest, even if I broadly agree that the real innovation with Bitcoin died when it was clear it would never be a currency.

But gold is also a commodity, and I don't think I've ever heard it called a pyramid scheme.

[dionidium]

"Buffett calls gold an “unproductive” asset, which, as defined in his 2011 letter to shareholders, means “assets that will never produce anything, but that are purchased in the buyer's hope that someone else — who also knows that these assets will be forever unproductive — will pay more for them in the future.”"

Source: https://grow.acorns.com/warren-buffett-why-gold-is-an-unprod...

[tshaddox]

Doesn't that apply just as well to public stocks, at least at the scale of most retail investors? Like sure, you "own part of the company" and the company might produce things, but I'm pretty sure everyone knows deep down that they're just purchasing in the hope that someone else with the same mindset will pay more for them in the future.

[dTal]

In theory, stocks can produce dividends. If a stock does not currently yield dividends, presumably the company is reinvesting that money so that the stock might yield higher dividends in the future. So stocks are a productive asset, at least in theory. Of course, in reality, speculative investment does contribute to the value of the stock, but at least it's notionally backed by something.

[brazzy]

https://en.wikipedia.org/wiki/Dividend

[antisthenes]

At least gold has a certain amount of practical, physical uses.

Connector plating, jewelry, dentistry, optics plating for [james webb].

[cko]

And treatment of rheumatoid arthritis.

[nwiswell]

Yes, that's true of commodities generally. They are worth what people will pay for them; they do not produce cash flows. A pile of copper is not productive either.

The fair criticism, I suppose, is that the "compelling reasons" a person might pay for a pile of copper are much more numerous than for gold (or bitcoin).

But, OK: think of fine art for a moment... it is also an unproductive asset, the value of which depends wholly on what other people feel like paying, since there is no immediately profitable economic activity in which you can engage with a Monet (unlike the pile of copper). Are you therefore calling fine art a pyramid scheme? I think we are watering down the definition into meaninglessness.

[theptip]

I don’t think that’s the point. Copper and most other commodities are productive under Buffet’s definition because you put them into pipes and other things. They are manufacturing inputs. Their price is set by the demand for the things that you make with them. Housing demand goes up => copper price goes up.

Gold is used in manufacturing but not as much as it could be, because the price is set much higher by speculation/hoarding. So Buffet’s point is that the price is set not by its productive use but by its unproductive use.

Bitcoin is the same as gold but without the productive use to set a price floor. If the speculative market for gold tanked you’d settle on something like 5-10% IIRC as the imputed value based on manufacturing uses. Bitcoin has zero value for manufacturing uses. Maybe there is a price floor for smart contract usages if the speculative market evaporated but I think it’s much lower than 5%.

[jjeaff]

You can charge admission to view fine art in person.

[slv77]

A commodity is a raw material that has a wide amount of utility in creating different products. Corn become corn oil, ethanol, cornstarch, etc. Gold becomes jewelry, computer chips, electrical connectors.

Crypto isn’t so much a commodity as a collectible like a stamp or a beanie baby.

[eric_cc]

> when it was clear it would never be a currency

But it IS a currency.. It is uses for daily payments and legally considered a currency in multiple countries today. I fully expect that list to balloon up over time.

You're talking about USA in 2022 and not the rest of the world or the future.

[nwiswell]

Turns out it doesn't matter if the currency is trustless if you still have to trust your counterparty anyhow. In fact it's worse in most cases, since you can't seek recourse from trusted financial intermediaries (chargeback, etc).

For 99.9% of daily cash-equivalent transactions it is significantly clunkier than the new "FinTech" solutions: Venmo, CashApp, Zelle, etc. For purchases, credit cards generally actually offer a kickback so it's not even a contest.

El Salvador gave everyone $30 of free bitcoin. What happened afterward speaks volumes.

[eric_cc]

> Venmo, CashApp, Zelle, etc.

These are layers on top of the dollar. I agree they’re a great consumer experience.

Why not equally nice layer on top of bitcoin?

[marcosdumay]

People buy gold on the expectation that it won't lose to inflation. That's why it isn't a pyramid, an exponential curve is well contained if the exponent is exactly 1.

[noxer]

Gold is a worse inflation hedge than stocks. Gold is actually bought to have quick liquidity when there is a market opportunity. It functions as cash but with less inflation but its not to evade inflation its just better than directly holding cash.

And yes it is a pyramid, almost all of the value come from the fact that central banks hold most of it and almost never sell to the open market and most of the rest is in jewelry with 2-3 generation turnaround time so essentially removed from the gold market.

[jjeaff]

Also, gold has actual utility as a product that is needed to manufacture certain things and is also desirable for cultural reasons like jewelry for enjoyment and social signaling.

[eric_cc]

> Bitcoin ... to be a commodity instead of a currency

According to current (May 2022) regulatory framework in the USA. In other countries it is currently a currency.

[strangattractor]

No one ever lost money underestimating the intelligence of the American public.

- Donald Trump

Not really but I am sure he is a practitioner of the philosophy. The actual quote is from H. L. Mencken and applies to both money and politics (which might be the same thing:)

No one in this world, so far as I know—and I have searched the records for years, and employed agents to help me—has ever lost money by underestimating the intelligence of the great masses of the plain people. Nor has anyone ever lost public office thereby. The mistake that is made always runs the other way. Because the plain people are able to speak and understand, and even, in many cases, to read and write, it is assumed that they have ideas in their heads, and an appetite for more. This assumption is a folly.

[wonderwonder]

stocks are a pyramid scheme as well, just an accepted one. To profit in stocks, new investor funds are required same as crypto. Truly the only non pyramid schemes are income producing assets such as a business or real estate.

[eloff]

A stock (specifically the company behind it) is also an income producing asset. That income will eventually be returned as dividends or through stock buybacks.

I know there are stocks that don't do either of those things (although rare) but the idea is they will one day in the future. You're still paying now for a piece of future profits. That's very different from a pyramid scheme.

[vikramkr]

Stocks are income producing assets, specifically a portion of a business. Dividends and stock buybacks are a thing.

[moultano]

Look up what a dividend is.

[wonderwonder]

Amazon is one of the largest companies on earth. How much has it paid in dividends?

Netflix? Alibaba?

[kasey_junk]

Amazon is doing a big stick buyback this year. Currently that’s a more tax efficient way to accomplish income production for most of its shareholders. Alibaba is doing the same.

Netflix has done buybacks in the past but their financials aren’t great right now.

[moultano]

Once Amazon decides that the prospects for continuing to invest in growing their business are lower, they will start paying dividends. In the meantime Microsoft and Apple already do.

[mattwilsonn888]

You don't understand what a commodity is - or you don't understand what Bitcoin is.

[arcticbull]

Ah the classic coiner refrain. Thanks bud. We do. We really, really do.

We've spent many years learning exactly what those things are thanks to all this insufferable nonsense. I know more about crypto than practically 90% of the crypto community. I know all the personalities, the history, the fraud, the crime, the grift. I've read countless whitepapers. I've learned about 'traditional' finance.

All because of the brigading army of the insufferable.

[FabHK]

While I dislike the coiners' "oh, you just don't get it" as much as you, I think a more charitable interpretation of GP is possible that rests on the fact that there are two interpretations of the word "commodity":

1. something (usually raw material or primary good) that can be bought and sold - Bitcoin sort of fits that definition.

2. something (usually raw material or primary good) that can be processed to produce something useful. Bitcoin is not a commodity in that sense, which might be what GP was trying to highlight.

[timtas]

The thing most anti-coiners don't understand is fiat, how that scam works.

[idea55]

The best scientific explanation for why Musk is rich is our social system requires we implicitly believe and repeat that idea due to political training which is hand me down gossip from parents.

He’s even said he’s propped up by others.

You are being annoyed with people when they’re not reciting the right semantics? Some form of just stick to the script?

The entire internet is full of insufferable bullshit brigading of opinions because that’s what it’s for.

I’ve been online since the 80s for the weird. Now it’s full of insufferable normies.

Maybe it’s outlived it’s usefulness as a social engagement tool.

[arcticbull]

> You are being annoyed with people when they’re not reciting the right semantics? Some form of just stick to the script?

Not at all, I'm sick and tired of being told to "do my own research" in response to thoughtful and measured criticism by people who clearly have no idea what they're talking about.

[pessimizer]

Of course those peaks were a function of demand being high, so more people bought in then than at other times.

[id]

There are also those of us who played with Bitcoin when it emerged, found it promising and mined it or bought some. Who took some profits along the way and never promoted it. Who still think it's a useful concept, _despite_ the hype that gets too much at times.

For what it's worth, you seem consumed by your envy. Accept that crypto investors, even the most stupid ones, took a risk you didn't take and were rewarded handsomely.

[noduerme]

When I launched a home built casino in 2011, I bought 5000 BTC to initially bank it. I didn't want to take BTC, I wanted to get licensure in Malta and take credit cards. But I didn't have any investment, or $500k to buy a license. I just had good software, so I launched it in BTC as a proof of concept and to try to earn enough to bootstrap the cost of licensing.

Long story short: That project is long gone. I viewed BTC as an interesting payment method that might have some inherent value as an efficient and anonymous means of transfer, which it's not anymore. I never trusted it and I didn't want to gamble on its fluctuations since the casino was denominated in USD and I was already exposing my savings to literal gambling risk (albeit playing as the house - still scary). So eventually I took to just getting rid of BTC daily, trading out the day's rake, and only buying it to do payouts. Closed the casino in 2013 and never saw any major profit, stakes being as low as they were.

I'm a middle aged working coder with a net worth short of $1m. I've thought a lot about what my life could have been like if I hadn't done ANYTHING except hold that initial 5000 BTC instead of getting out of it. And you know what? I'm not sorry about it. I did what seemed smartest to me at the time: I got rid of what I thought was a bad investment. And by then I knew plenty more about Bitcoin than most of the people who've bought into crypto since. Under the same set of conditions, where that was a meaningful chunk of my savings, I'd do the same again every time.

You're absolutely right that there is nothing healthy about being bitter or angry towards people who strike it rich - even, or perhaps especially, if they do so by pure luck.

Life is a casino. Envy gets you nowhere, and it's not a good look. Show a little class and you might get comped for the show.

[edited for readability]

[Layke1123]

When 9 people in a group of 10 see one person get lucky by owning more than 90% of the available assets around them and not seeing an iota of it going to them, you are about to get a lesson in how unlucky you can also be.

[noduerme]

But this is the nature of a casino. One out of ten people gets a big payout for the same basic actions. If you're among the other nine people like I am, you take it in stride. You don't jump and cannibalize the guy who won. Not least because your self-esteem shouldn't be contingent upon how much money you have compared to someone else. People who win big randomly can't really be proud of what they have. But if you know you earned and deserve what you have, you can have pride. True pride in yourself is more valuable than money. I see this every single day with the ultra-rich I work for. The ones who got it by luck have no self control or pride. They'll soon lose it. I really don't care if they have more goodies than me. But that's because I have pride in myself, and it's ugly and despicable to base your self worth on comparing what you have to other people's material wealth.

In fact, frequently I feel sorry for them because they seem so desperate to be friends with me - because my life experience had been "real" and presented me with real shit they never had to deal with. They lack more for true friends than you or I. And I can't covet what they have when I can see, plainly, that I wouldn't want to trade places with them. And that a lot of times they want to trade places with me.

We all die. Happiness and bliss is just as likely to find you in a park behind a dumpster as in a penthouse. All the rest of the angst about judging who deserves what is just a waste of the time you have on this earth to define yourself independently.

[Layke1123]

This isn't about losing 1% of your wealth gambling.

This is about wealth inequality. This is about watching as resources are entirely captured for a very small few. But history will continue to teach lessons about what happens when the rich get too big for their britches.

[noduerme]

Who said 1%? I know people who have just lost most of their life savings in this crypto crash. My view is that they gambled big, and some won and others lost. My point is that I'm not angry at the ones who won, nor particularly sympathetic to those who lost, because I'm happy with my decision to stay out of the game even though I at one point held a winning ticket.

[mjburgess]

Transfers of wealth from productive to unproductive industries arent risks worth rewarding, neither economically or with praise. It's slothful both as a personal vice, and as an economic activity.

[robocat]

> Transfers of wealth from productive to unproductive industries arent risks worth rewarding

Down that path lies authoritarianism: who decides what is productive?

Is art productive? Is your comment on HN productive? Is beer productive? Is Haskell productive? Are you productive? It isn’t hard to argue most everything is non-productive. Remove all non-productive uses of money or time, and what is left?

[erulabs]

It's not surprising to me whatsoever that within that same sentence that as you said, "leads to authoritarianism", is a reference to absolute morality and sin.

The scariest part of this line of thinking being so common is that it has happened! We've bench-marked humanity towards productivity before: dosed drinking water with amphetamines instead of fluoride and outlawed art and mandated labor at tank factories. Productivity!

Down that path lies authoritarianism, but more than that: down that path lies mass murder. What could be more productive than removing those who block productivity?

I appreciate your comment but I am always blown away by how kindly people respond to that idea of "unworthy activity", as if its not one of the cruelest ideas a person can possibly have. It's more common here because it's a community of engineers - we work with complex automations all the time - so it's only a natural mistake to see humanity as a complex automation too, and want to engineer it. But I still can't forgive the callousness.

[robocat]

Thanks: I hadn’t thought of it as say Puritan echos; but yes, telling others what they should and shouldn’t do with their time and resources definitely has religious (any kind) and political (both left and right) facets.

There is not an equivalent 1st amendment “right” to spend our time and money as we will. Too many people just spout an opinion on what we should be “allowed” to do: without thinking of how that could be used against them.

It drives me crazy how willing so many people are to decide what is best for others: the rich, the poor, the disabled, the foreign. And how little insight people have that their own choices are definitely pure waste in the eyes of others.

When did liberty get debased?

[erulabs]

I always try to imagine a really reasonable reason for why people believe things like that. One that I can imagine is that humans are extremely biased towards seeing inefficiency. We seem to have a much easier time spotting problems than recognizing the product of years of slow labor. It makes sense: if we were able to appreciate the slow accumulation of value, we'd just stare at any living creature all day, totally enthralled. Instead we see suffering, the parts of the world life hasn't conquered totally yet. As an evolved creature that perspective seems very reasonable.

It's why it's much easier to walk around a city and spot an empty balcony, high up in the sunset, than to appreciate the city itself.

"Someone should be enjoying that balcony! Why is the rich owner somewhere else, and there are thousands of us pedestrians wishing we could spend just a moment up there? Inefficiency!"

is a much more viral thought than being completely overwhelmed by the amount of human effort your eyes are looking at. If we could properly understand it we'd all just be weeping with gratitude and humility all the time, and that wouldn't be productive at all! Being biased towards negative emotion should be assumed to be the default. So liberty didn't have to be devalued - it just hasn't been properly valued yet! Much more optimistic :)

Sorry for long reply!

[zelphirkalt]

There is a difference though. People, who produce art or any other kind of entertainment of thought provoking things, mostly at least partially do it to add something to society, or to make us think. Putting money into energy intensive speculation, which does have no real world value behind it is not in the same league as those activities and is definitely not productive. Even counter-productive, as it is using up energy, which could be used for useful things. At the end as in any such speculative endavour, one person's gain is another person's loss, no matter how many abstraction layers and smoke screens are put up.

[mrzimmerman]

I think you may be confusing economics terms with moral and ethical distinctions. I’ll grant that the idea of productive and unproductive labor is an outdated economic concept.

Regardless, academically defining something as more or less productive than something else is not authoritarian. Nor is deciding personally if something is “good” or “bad”.

Now if someone in government decided to create and pass legislation based on their personal academic or philosophical beliefs, and not based on some factual usefulness of the legislation, than I think that would fall under the definition of authoritarian.

[robocat]

> I think you may be confusing economics terms with moral and ethical distinctions

mjburgess’ comment appears to be using virtuous, religiously worded, moral arguments against the “waste” of cryptocurrencies. I am not making an economic argument and neither was mjburgess: my argument is about liberty and I am against people that imply that our personal choices or values are unworthy, because by their morals the choices of others are waste. I personally might agree that cryptocurrencies appear to be negative value for the economy, and I might see them bring negative value to some of my acquaintances. That is not the issue. We should aim for the ideal of being as free as practical to make wasteful choices: the waste of having a child, breathing, thinking, or doing absolutely anything, really. As you say, that freedom needs careful balancing against how our personal liberties affect others.

I am looking at that comment as an single example within a wider milieu: one dangerous opinion dressed up in what superficially appears to be a sensible economic argument.

> is not authoritarian

Strawman words in my mouth. I never said it was authoritarian, I said: “down that path lies authoritarianism”.

[id]

A lot of economic activity is exactly that. Look no further than the big tech companies...

[xtian]

Great point

[nathanvanfleet]

"Who still think it's a useful concept"

Narrator: It wasn't

[tommit]

I understand that this is what I get for clicking on a yet another HN crypto hate thread, but your comment is pretty snarky and offers nothing to the discussion. The comment you replied to was entirely in good faith, there is no need for such remarks, this isn't reddit.

[Layke1123]

This to me reads as such.

"Hey, look, just take risks, because if you don't, you'll be poor AND bitter."

[id]

Are you also bitter about people who win the lottery or in a casino?

I never asked anyone to take risks, and buying into unproductive assets is usually not a good idea. Neither is gambling. But holding this kind of resentment will eat at you. If other people get lucky, you should be glad, not hateful.

[Layke1123]

This isn't lucky, but besides that, no, I'm not happy when a very small percentage of our population "gets lucky". We should have 80% of this country be able to afford a home, a vehicle, have affordable healthcare, and a minimum of 4 weeks vacation in the modern 21st century.

Everything else is just a smoke screen to make "your lucky existence" justified compared to the masses who did nothing wrong except be born into this system.

[id]

Why only 80%? Why not 100%?

Assuming by country you mean the US, just being born there is already incredible luck. I have no idea what you're talking about really, there will always be people with less "luck". I work very hard, consider myself very lucky in general, but also unlucky in some aspects. And hell, I can't afford a home either, but I'm okay with that because I don't expect society to hand me one.

[colesantiago]

> This came off as pretty bitter. I apologize, but I am bitter, and I'm having a shit couple weeks.

You shouldn't be, these cryptobros have been orchestrating general scams, rugpulls, hype scams, pump and dumps and all this having an effect on normal people's lives.

Do not be sorry.

[jeffreyrogers]

The majority of people I know who are into crypto buy the hype and believe their own bullshit. The cynical opportunists seem to be a minority.

[jcpham2]

11 years now I fall into the category of people you are all collectively referring to as "crypto bros"

The only difference being I don't shill pyramid schemes on the internet for profit.

I kinda sit back and wait and take profit when it makes sense to me.

I certainly don't tell other people about it when I do it.

[bdcravens]

I wouldn't call you a crypto bro then. I've mined and traded Bitcoin for around the same amount of time, so I can say comfortably that those in our situation have seen the cycles, and are rarely surprised, boom or bust. The crypto bros are the hypers and pumpers, infused with plenty of cockiness based on their own confirmation bias.

[jcpham2]

Thanks for this

[taurath]

Until the money goes away, at which point it becomes as it always has been about getting rich and not about any of the ideals.

[TekMol]

    crypto bros are finally getting a punch to the mouth

Finally? Bitcoin has been losing 50% of its value 4 times during the last 10 years. It even lost 80% of its value multiple times.

[faraggi]

You failed to mention that despite those falls, it is still up 100s of times its initial value. This comment is worse than the media trying to portray a specific story by presenting data partially.

[sangnoir]

> You failed to mention that despite those falls, it is still up 100s of times its initial value

Should we also benchmark stock prices against IPO prices? That information is only useful (and applicable) to those who go in at the beginning,and that is a small (and shrinking) proportion of overall traders. Apple being down 15% YoY is useful to more people than knowing it's up 25000% since it's IPO decades ago.

[gsibble]

This. I cannot stand the modern crypto bro. I've met some truly insufferable people. The term "New Money" doesn't even do enough justice to how horrible these people behave.

[cwkoss]

I think how the SV techbros in this thread view cryptobros is probably fairly similar to how most of society views SV techbros.

[enraged_camel]

...this is actually a very astute observation. I think HN could benefit from some self-awareness sometimes.

[jcpham2]

I've pointed out this thread of comments to other people who I think should read some of the sentiment in these comments. It is absolutely amazing how polarizing this subject can become in specific forums

[gsibble]

Probably. Except I don't live in SV. I did for 10 years but now live in Boston. Entirely different environment.

[papito]

Oh, you mean the very pleasant "enjoy being poor" characters?

[jdmoreira]

I'm not disagreeing with you but I don't think this is healthy. This shouldn't be eating you from the inside.

"What good is envy? It’s the one sin you can’t have any fun at." - Charlie Munger

[anotheracctfo]

I'm not sure I'd take a billionaire's view on envy. It always comes off as "Let them eat cake" to me.

I'd rather listen to someone closer to the bottom, who actually had to sacrifice for that viewpoint, like Jesus or a well adjusted homeless person.

[jdmoreira]

Charlie Munger wasn't a millionaire all his life. And he lost a child to cancer when the kid was 10 years old. Besides losing both his wifes as well.

Reality is more complex than you make it. Not all billionaires are horrible people in case you didn't know.

But yes, enjoy your Jesus fantasy.

[philosopher1234]

Who are you to tell him that feeling hate and bitterness is unhealthy? Bitterness is useful, it helps us protect our values and helps prevent anti social behavior.

[uoaei]

I don't know about OP but I definitely don't feel envy toward these people. I try to imagine myself in their shoes and just can't imagine myself spewing the same garbage or being the same kind of chauvinistic dick about something like this.

[kodah]

Imagine this same statement but about people that own houses. Houses also serve as an investment to the layperson and in certain places have contributed to a higher barrier to entry for others.

> It's less that I'm glad the market is crashing, and more that I'm glad that the insufferable homeowners are finally getting a punch to the mouth. Seriously, these people are the worst. Your average "home investor" has no skills, no mathematical foundations, nothing. Except for pure stupid luck, and the ability to spew inane economic babble 24/7. And yes, they think they are much smarter than you, because they achieved better financial results than you did while only doing 1/1000 of the work to get there. I truly hate the fact that these people are so rich. It makes me want to move to Alaska and just try to ignore society for the rest of my days.

> This came off as pretty bitter. I apologize, but I am bitter, and I'm having a shit couple weeks.

Not trying to criticize you too much; I'm more reflecting on this text because this is how I catch myself feeling about people who have participated in the inflation in the bay area with respect to homes.

[jpgvm]

Hey man. Hope things get better for you.

The crypto stuff is just another bubble, sticking to fundamentals will still lead you to (well earned) success. Bubbles come and go, skills and financial acumen are forever.

[cryptica]

This is true, but it also applies to the tech sector as a whole. The engineers of big tech companies tend to look down on all other engineers on the basis that they happen to work for financially successful companies which have market monopolies (and are propped up by easy money from government money printers via huge contracts and exposure to public markets).

Never mind that their processes are a bureaucratic hell and it takes 100 of their engineers to implement the same thing which just 1 really good engineer working for a startup could implement in the same amount of time - Look at Whatsapp as an example; before they were acquired, they had hundreds of millions of users and only 55 engineers in total... Facebook has over 10K of them and gets a lot less done...

Talent outside of big tech is not unusual; it is the norm, but most startups which are full of talented engineers don't go on to become Whatsapp because the market doesn't care about technical talent above a certain (rather low) threshold.

Everything is a lottery. Any appearance of meritocracy is an illusion crafted by media and PR firms in an effort to keep the system from falling apart. Only extremely lucky, delusional outliers think that the narratives make sense nowadays.... Through a lot of people who know that the narratives don't make sense still pretend that they do.

[Aunche]

Unfortunately, cryptobros probably bought in early enough where they are unlikely to be punished. The people who are punished are those who were told that cryptocurrency is a good way to diversify your portfolio.

[mouzogu]

crypto dude bros are irritating, just stay off social media,

what sickens me more is all these companies jumping on the crypto.nft.metaverse bandwagon, like f off seriously.

[MarcelOlsz]

>just stay off social media,

What do you do when literally everyone you know IRL is into it? Everyones brain has been warped by speculation.

[teucris]

Get some new IRL relationships. I find volunteering for a cause an amazing way to make new friends.

Source: I am in a tech-oriented urban environment and I know nobody who is into crypto.

[MarcelOlsz]

>I find volunteering for a cause an amazing way to make new friends.

Even if I could live to 500 years, I don't have the time to waste on random activities like this. I've never felt like North America is my home anyways, nevermind the people. I'm mostly over having any sort of social life here, have zero hope or desire to do so left.

All I ever wanted to do was play music but all I ever ended up doing was paying rent.

[calibas]

I've seen a few "insufferable crypto bros" that are overjoyed to see the markets crashing. Just like any other investment, there's a subset of people who don't want to see stable prices and steady increases. They want extreme volatility because that means a chance for extreme profits (and loses).

[hindsightbias]

Alaska is overcrowded with all the people who fled the dot.com era.

[Inviz]

Can you share how are these two things related?

[munificent]

Here is my weird tin foil hat theory that explains, like, a lot of what's been going in the world in the past twenty years.

A significant fraction of young single men feel a deep compulsion to indulge in risky behavior with a potential high reward in order to make a name for themselves or earn their place in society. I don't know if it's genetic, cultural, both. But for many young dudes, it's not enough to simply work a good job and enjoy their leisure time.

Men like this are the free radicals of society. If the society can't find a healthy productive outlet for their drive to compete, take risks, and seek fame and adventure, then they will just do outright dangerous shit with potentially large collateral damage.

For most of human society, hunting, exploring, dangerous jobs, and war were significant outlets for this. They gave men a way of doing something courageous that their culture held in high esteem.

But today, we have domesticated animals, explored every square inch of the Earth, automated all of the risky manufacturing and resource-gathering jobs, avoided large-scale war outbreaks (and used technology to reduce military casualties and fatalities). There are simply less paths available for a young man who feels like he has nothing to take pride in unless he succeeds in some bold risky adventurer.

For a while, videogames functioned as a simulated output for that impulse. I think that's why many gamers flipped the fuck out during Gamergate when they felt that their avenue to satisfy that urge was being invadaded and taken from them.

It was, I think, a driver of the rise of the alt-right, doomsday preppers, and Trumpism. This impulse elect a wildcard as President, burn it out down and start over because in a world of chaos, there is maybe an opportunity for the bold.

And now, I believe, much of the crypto world is driven by that exact same impulse. Young, overwhelmingly male, "crypto bros" desperately looking for some unexplored frontier where they can build something new and forge an identity for themselves.

The problem is that there is no there there. It's all a house of cards. No actual new value is being created, so it's just crypto bros competing with other crypto bros in what will likely end up being a zero sum game (except for all the unfortunate other investors who get sucked in).

Even if crypto all collapses, the core problem will remain. These dudes will just find something new to slake their thirst for risk. Hopefully it will be on something less destructive to society.

[camillomiller]

I like this theory. Probably oversimplifying a lot of elements, but it can walk at least a bit. Kudos.

[jcpham2]

There's also this new-fangled social media anxiety pressure whereby most people only share and put out the AMAZING GAINS and HOW AWESOME their lives are.

I feel like social media ups the ante on a lot of borderline or negative human traits because instead of CONNECTING us it's actually pushing us further apart.

It's a tangential thought I know but the fact that there exist people bragging/boasting/ saying LOOK AT ME LOOK AT ME LOOK HOW EASY IT IS - this creates a pretty unhealthy feedback loop and like you said, there's no value there.

I have smaller kids and I fear for their mental well being because of the pressures of the internet and how it's bleeding into reality in weird new ways that aren't exactly healthy.

[timtas]

> No actual new value is being created

That's your whole theory, and there's nothing weird about it. Everyone knows young men take risks to make their fortune and gain esteem. It's just window dressing for a claim you threw out there without any supporting argument.

[naravara]

I think it's simpler than that. The ideology of the post-90s/post-Reagan neoliberal era inculcated a set of hyper-capitalist values that posited humanity as "homo economicus" and operated as if we are little more than producing, consuming animals who exist to mechanically produce generic "economic output" and consume "utility."

This is a deeply unsatisfying and spiritually empty existence. This leads to all the behaviors you mentioned as a form of rebellion and/or attempt at escaping the bonds of that kind of life. This sentiment has been catalogued in a variety of movies, including "Fight Club," the ur-text of Gen X anomie.

[munificent]

As a gen-xer, I agree wholeheartedly that the 80s transition of Americans from being people to being "consumers" was a soul-sucking cultural exercise that has created misery all around.

But crypto bros aren't trying to escape that. They are doubling down on being homo economicus because now they're investing in financial objects that are completely decoupled from even representing something as meaningful as a share of ownership in a business.

I think young men with this mindset will play whatever game society places in front of them. They just need a playing field where they can feel they can compete and have a chance to be seen making a home run. Crypto was there so they jumped on it.

[moistly]

Elon can’t start shipping people off to Mars soon enough, then. When the bros all F off to space, maybe we can finally get some peace and tranquility.

[EVa5I7bHFq9mnYK]

There are a lot of people with no skills that are richer than you. Are you hating all the people who inherited money? Should any person born in poor country hate people born in rich countries?

[timtas]

Best reply. Envy is gross. Such a socially destructive vice.

[la_fayette]

I think this is a dump discussion here... look at the stock price of amazon, apple or what not. In perspective of the stock market, it is nothing special when u look at the crypto assets...

[jeffbee]

And they are out there right now trying to destroy America with their campaign funding, because they believe their lottery winnings validate their insane politics.

[carlsborg]

Another view : Curiosity is profitable. If you spent some time digging into the technologies and trying them out, you ended up buying a bunch of tokens/coins to play with, and sometimes they just handed out early users money. It isn’t all jpegs and cheaters- lots of interesting technology problems.. read some of the white papers you will find skill and mathematics in loads.

[cinntaile]

That's apparently how the human psyche works. You attribute to skill what was dumb luck. Very common in the stock market too.

[29athrowaway]

If someone is making money, good for them.

My dislike of bitcoin is mostly due to its enormous energy usage. And the scarcity of GPUs.

[api]

I have no problem with people winning the lotto. It happens. People get lucky. What I hate is people who win the damn lottery pretending they're geniuses who are on the right side of history changing the world. That's what much of the crypto ecosystem sounds like. Fxxk off. You won the lottery.

[annoyingnoob]

Don't sweat it. People win the lottery too, but that does not make it an 'investment'. I've always thought of the lottery as a tax on people with bad math skills. You could win but you might have a better chance of getting struck by lightning.

[koonsolo]

I upvoted your comment. Not because I like it, or I agree with it, but because it validates my assumption on why HN hates crypto so much.

I senserely hope your weeks will get better.

[timtas]

You should probably get your burning envy under control before you realize this is just a buying opportunity and it fully consumes you.

[LZ_Khan]

Keep in mind that for every one of the rich crypto babblers, there's probably 5 that got in at the wrong time and are penniless.

[philistine]

Living North will not allow you to ignore society more easily. Quite the contrary. I know, I've lived it.

[JSavageOne]

I'm sick of this meaningless word "bro" being tossed around to condemn every kind of stereotypical archetype. Crypto bro. Tech bro. These phrases are completely meaningless and sexist.

> I truly hate the fact that these people are so rich.

Envy is fairly toxic

Amazing that this is the top comment on this thread. HN is so anti-crypto now it's almost comical

[2ICofafireteam]

If you don't know who Dick Proenneke is, look him up....wonderful daydream fuel.

[seydor]

this came off as sincere, so congrats. Most of the things that offer us value are not paid for that. Most of the internet runs on PHP

[tOUSSia]

you are correct about the bitter part. Maybe, just don't focus on things you can't do anything about.

[noxer]

There is a word for this, jealous.

[maerF0x0]

you say

> pure stupid luck

I say

> A bigger idiot

[kobasa]

https://www.bitcoinisdead.org/ - have fun staying poor, cope, etc..