[maxioatic]

Haven't heard this take before. What are your thoughts on high frequency trading shops and the regular stock market?

[moose_man]

I think they suck just like crypto, these are all mechanisms rigging the economy in favor of the already wealthy. If we don't unrig it we will eventually get civil war. Popular immiseration eventually leads to upheaval.

Checkout the book - End Times: Elites, Counter-Elites, and the Path of Political Disintegration by Peter Turchin

[reisse]

Already wealthy? I don't think you know the scene well. HFT probably pulled more physics and math grads out of poverty than any other field.

[treyd]

It's also pulled those grads away from more typical jobs they'd have building useful things and actually producing new real-world value.

[mratsim]

Real world value for which they'll be paid post-doc/PhD wages and be carrying student debt like Sisyphus carries his boulder for all eternity.

[jekrb]

What if the work these folks do to increase market efficiency does produce real-world value, as slower verifiable economic information would increase periods of uncertainty and price slippages?

Or the HFT engineers producing research and products that speed up general compute, such as accelerating SHA and ED25519 signature verification, so that their trading shops get information faster?

I wonder if there are actually a lot of third-order, downstream effects that society gets by paying engineers to just make computers and telecommunications faster.

[treyd]

Slippage in the price of cabbages at my corner market? I don't think so.

There's very good evidence that as the finance sector grows to be a larger portion of the economy (which it very much is compared to 50 years ago) that increasing inequality goes along with it, as the profits made in the finance sector are mostly rent seeking from the rest of the economy. You could also interpret it as a private tax on all other economic activity.

[Ekaros]

Just look at UK... Largely based on finance sector and it does look pretty bleak for those outside... And I am not even sure if that is yet the end state...

There is some value there, but the cut they get is likely too large already. Then again it is all just fake numbers...

[oliveshell]

The fact that this comment was grey from downvotes when I found it is the most HN thing on the planet.

[RandomLensman]

Yes, they might create more non-monetary value elsewhere, but that trades off against what non-monetary value the money they make creates now.

[reisse]

I don't really want to start a debate on how HFT produces real-world value, but just consider that if these things you talk about are really useful and valuable, they might also provide competitive salaries to attract people?

[treyd]

What pays the most only loosely correlates with what produces the most value for society. It's easy to skim a percent here and there off hundreds of billions in volume shuffling around without the owners of those billions caring much, but it's much more difficult to see how that, on the whole, actually improves the condition of your neighborhood.

[bob_malrey]

At least with stocks you actually own cash flows. Cryptos produce nothing.

[kinakomochidayo]

Ethereum has a perpetual buy back mechanism via burning and staking currently gives about 2.7% a year without MEV

[DennisP]

Someday people will catch on the Ethereum actually has a PE ratio.

[ric2b]

They produce financial services. Miners have cash flows from the transaction fees.

[arkis22]

If you are upset at trading shops or the stock market as a retail trader, you dont understand the game you are playing.

[ESTheComposer]

This guy is in every single crypto thread here spouting anti crypto nonsense. Don't expect an actual in depth take.