[aetherson]

Netflix has fallen more than Bitcoin has this year. Netflix has no or very little in the way of underlying physical assets to back up their valuation -- they do have intellectual property that may or may not be worth something, but is not an intrinsically scarce good like, say, real estate or even like iPhones.

So, serious question for people who argue that Bitcoin deserves a special class of regulation: what differentiates Bitcoin and Netflix here?

[clucas]

One big difference is that Netflix is subject to securities regulations and must file regular reports with the federal government providing important information about how they have been making their money, how they plan to make their money in the future, and any potential issues they see on the horizon with their business plan. Major investors are disclosed. Names of managers are disclosed. And every potential investor can read these reports; they are public. If they lie, investors can sue.

I don't think Bitcoin has anything like that - its ledger is public, yes. But the important part, where fiat currency is turned into Bitcoin or vice versa... that is opaque, for the most part. This is a very big difference, in my mind.

[aetherson]

Investors can sue if Netflix lies, though importantly if what you're worried about is a collapse in the value of the security, um... bad news. Suing is not going to recover the value of the security.

I don't think that Netflix itself has a responsibility to report the flow of fiat currency into and out of Netflix, certainly not in a timely enough way to prevent people from being burned by the outflow of capital from it (as, indeed, has happened this year). The stock exchanges themselves provide visibility into that.

[clucas]

Right, but if I'm sitting in the chair as a regulator whose goal is to reduce the harm that financial products can cause to an average member of the general public while still allowing the market to work on its own as much as possible... I'm going to look at Netflix and think "well, we did what we could." Do you honestly think I should look at Bitcoin and think the same?

[aetherson]

I mean? Maybe? Bitcoin has generated more wealth for more people than Netflix and lost less value from its peak? Seems like things are going okay?

You seem to be hinting that there's a natural limit to what we "can" do for any given security. I don't think that's true: it's just all tradeoffs. Could a regulator have tried to stem the losses people experienced from Netflix? I mean, sure. They could've halted trading on Netflix. They could've artificially bought up Netflix's stock.

I don't think they should have done all that. The costs would have been extreme. But if you're all in on, "we did what we could," then I think the ball's in your court to describe exactly where the limits of that doctrine lie.

[arcticbull]

40% of bitcoin holders are underwater, and the vast majority of that so-called wealth is held by like 5 people. And for what? being in the right anarcocapitalist forum in 2009? Nice.

[aetherson]

What percentage of Netflix holders are underwater?

That's the point of this whole thread: whenever you get crypto haters on these fora, they act like crypto is the only volatile asset that has no effective price floor. But in fact, there are loooooooooooots of assets that are volatile and have no effective price floor.

Are those assets dangerous to invest in? They sure are. I don't invest in crypto and I don't invest in Netflix, either.

But do those many other assets that are volatile and have no effective price floor draw all this apocalyptic talk and complaints? No, they don't. They may draw entirely reasonable discussions of the value of not investing all your eggs in one basket. Which suggests to me that all the hate that crypto draws is not in fact because they're volatile and have no price floor -- that's a smokescreen for people who, generally, are in some combination of: a. don't like the politics of some people involved in crypto, or b. are pissed off that they spent a decade saying that crypt was going to crash any day now and have been consistently wrong.