[JumpCrisscross]

Not comparable, politically or financially

Politically, Trump’s party controls the government and Trump is incredibly popular with his party. Financially, there hasn’t been a rug pull.

The comparable situation would be Trumpcoin gets wiped out in 2026 amidst the Democrats taking back the House.

[bbor]

I mean... at a certain point, with memecoins, it's just about the scale of said pull, not the presence.

  There have been concerns of a pump and dump scheme and analysts have viewed it as a "disaster." A forensic analysis commissioned by the The New York Times concluded that 813,294 wallets lost $2 billion by trading the coin while the president's company and partners profited about $100 million from trading fees. According to Fortune, "Less than three weeks after its release, President Donald Trump’s memecoin has produced more losers than winners. For every dollar in trading fees the Trump crypto creators raked in, investors lost $20."

- https://en.wikipedia.org/wiki/%24Trump

I hope we can all agree, crypto-fans or no, that moon coins are at best a very risky, unregulated gambling prospect!

[adriand]

As was noted elsewhere (I forget the source), it's zero sum: anyone who makes money is making it off someone who is losing money. In fact, it's less than zero sum because of platform fees.

[tombert]

Yeah, this is the thing that made me realize that cryptocurrency is pretty much always a bad investment.

Stocks aren't zero sum, at least in their idealized form; if I buy a share of some company, they can use that investment to create products or provide value in some form, and if the product is good then that gets reflected in the stock price increasing. It creates value, and the stock price follows.

With cryptocurrency (with maybe the exception of the more computation based stuff like Ethereum?), it doesn't really do anything, it's not creating value. It's just transferring between wallets, and the value increase is pretty much entirely speculative.

Obviously not all stocks are "ideal" like I mentioned above; there have been plenty of cases where stocks are ponzi-adjacent, and it's certainly not uncommon for stocks to be overvalued during bubbles and the like, but my point is that stocks aren't inherently zero-sum like cryptocurrency is.

[JumpCrisscross]

The term you're looking for is seigniorage [1]. Crypto privatises seigniorage to the financial promoters.

[1] https://en.wikipedia.org/wiki/Seigniorage

[marcosdumay]

Being used as money creates value.

So, to see if cryptocurrency is a pyramid or not, just look at how much is transacted compared to its total value...

Or don't, because you already know the result. But it's not inconceivable for a cryptocurrency to create value. It's just that nobody did one that does it yet, and the culture around them makes it less and less likely as time passes.

[tombert]

I don't think cryptocurrency in its current state could realistically work as currency though, because it's deflationary in nature. For the same reason we don't use gold or silver as currency anymore.

[fulladder]

The purpose of buying a coin like $TRUMP is not to make money. It is to help Trump. You expect to lose money because the entire goal is to transfer money to Trump.

You and the New York Times seem to have misunderstood this important point.

[bbor]

Interesting thesis, hadn’t heard that! There’s lots of people on Twitter who admitted to losing tons of money unintentionally, but of course it’s hard to prove what the silent majority was thinking. I am still a little dubious tho, sorry:

1. Why didn’t any of the marketing materials say that?

2. Why launch $MELANIA?

3. Why didn’t people just trade around a couple bucks over and over to rack up fees, rather than investing as usual?

4. This is edging on partisan politics I guess, but: why donate to the billionaire president…? He doesn’t need a legal fund, he now has free housing, and he’s selling more direct merchandise (watches, NFTs, bibles, etc.) than ever. Just seems like a weird time to donate.