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this jonah is much too kawaii
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Jun 21, 2022 17:11
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Star Man posted:We're thirteen years into this bullshit and I still don't get it. the same as any commodity trade. you're hoping the value goes up based on a disparity between supply and demand (or that you are exploiting an arbitrage opportunity, which isn't really much of a thing with crypto (i think?)). with crypto i think the fundamental underlying motivation to be an early adopter is driven by the thought that crypto will eventually be used as legitimate currency, and that demand will grow exponentially over what it is now, increasing the price (and the value of your holdings) e - that's if you even get past the base level thoughts of "number go up/hodl" that i imagine a significant amount of coiners stop at
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Jun 21, 2022 17:12
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Is anyone still treating crypto like a future currency? I feel like that belief is long dead and it's just a rush to get rich or die trying.
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Jun 21, 2022 17:21
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Star Man posted:Is anyone still treating crypto like a future currency? I feel like that belief is long dead and it's just a rush to get rich or die trying. bitcoin is so obviously not functional as one that nobody really pretends anymore, but a lot of the altcoins pretend that's going to be part of their future value (but they're still actually sold as speculative investments that will go up because in the future someone might do that
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Jun 21, 2022 17:23
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Defi is allowing everyone to overcollateralize their btc and eth for guaranteed 500% apr or whatever. Im curious how much coin noawadays is locked up as defi collateral vs actually traded.
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Jun 21, 2022 17:24
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It's time to start smoking your vitamins, goons: https://twitter.com/BennettTomlin/status/1539258114175901696
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Jun 21, 2022 17:25
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Shitshow posted:Has it always been difficult to convert bitcoin into cash? If so, how was that not a huge red flag for any investor? Yes and no. I remember in the early days of BTC where some guy posted a trip report of trying to sell a few hundred dollars of BTC in a paper wallet to another guy in a Wal-Mart parking lot and the buyer just robbed the seller at knifepoint because the nascent exchanges were leaky and often down/non-usable. A direct peer-to-peer, BTC for cash, exchange is probably the simplest way to go, but is less common than someone putting their BTC on an exchange and then someone else paying the asking price. The thing is that Tether or other stablecoins are more common purchasing tools so the seller is left with more internet funbux, but these are never going to go up in value, can only be cashed out through Bitfinex's exchange and that exchange can just decide you don't get to cash out. Stablecoins have essentially made it possible for people to just continuously buy more types of crypto instead of cashing out due to the extra time and effort needed. The funny part about the exchanges is that sites like Coinbase require you to upload a bunch of identifying documents and provide a banking information, which defeats the purpose of "anonymous" transactions. Actually, this whole system is something of an affront to the reasoning behind BTC, down to valuating it in real world money.
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Jun 21, 2022 17:28
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Star Man posted:Is anyone still treating crypto like a future currency? I feel like that belief is long dead and it's just a rush to get rich or die trying. You occasionally see it pop up in response to people pointing out that there's no underlying value to crypto and that your gains are totally dependent upon other suckers buying in after you at a higher price. And those suckers are hoping for other suckers to follow them and pay even more and those... you know, I think there might be an inherent flaw here. There has to be a reason that they think other people will buy in on the next layer down of the pyramid, otherwise bitcoin is a house of cards assembled by skydivers on the way down. That's when the attempts to say it's the wave of the future come in. Can't confront the uncomfortable truth after all.
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Jun 21, 2022 17:28
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Star Man posted:We're thirteen years into this bullshit and I still don't get it. Ponzi Schemes are designed to be overly complex and confusing. This is to obfuscate that it's just a Ponzi Scheme and also to lure in intelligent people (or people who think they are intelligent) who are the main marks for these scams. It plays on their psychology, they don't want to appear dumb so they pretend to understand all this complex stuff. Then when the rug starts to get pulled they double down because of conscious dissonance, they are too smart to be scammed, so it's not a scam! There was a video where the guy behind Celcius was asked "how can you create yields out of Bitcoin?" (Bitcoin can't create yields) and he replied. "I'd be happy to explain how we make yields out of Bitcoin if you give me an hour." Which really meant that he was going to throw jargon at the guy until he was too confused to continue arguing. It's complex because it gives the illusion that it's brilliant when it's just a ponzi scheme with more steps.
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Jun 21, 2022 17:35
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Star Man posted:Is anyone still treating crypto like a future currency? I feel like that belief is long dead and it's just a rush to get rich or die trying. At this point it’s just Beenz or Flooz 2.0. Unless transactions can happen at… the rate transactions need to happen, meh.
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Jun 21, 2022 17:38
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instead of cashing out your convert your gains into even more internet money and through the magic of HODL youre going to be a multi-millionaire and lol no you still cant cash out your $7.6 million in dookiecoins or whatever
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Jun 21, 2022 17:42
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Here's a really basic question. What determines "the price of bitcoin", how are all those fancy graphs drawn? Average selling price per coin every minute? Hour? And across what exchanges?
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Jun 21, 2022 17:44
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Beartaco posted:Here's a really basic question. What determines "the price of bitcoin", how are all those fancy graphs drawn? Average selling price per coin every minute? Hour? And across what exchanges? This depends who you ask. Typically a graph will be directly from one exchange. It will show the price on that exchange over time, which is determined by the intersection of a list of buy orders and a list of sell orders. You could make a meta-graph of many exchanges, but they are typically close to each other as if the price were much different on an exchange people would abuse that to make money.* *note that a graph of usdt-btc pairings could be different than the pairing of usd-btc, so you have to be careful whats being compared. edit; I think a more clarifying explanation is that bitcoin and stocks don't have a "price" in the sense that you buy them from the exchange. Instead an exchange matches you with another buyer/seller. You say "I am willing to buy 1 bitcoin for any price less than $8000" and then you wait until anyone else offers to sell one at that price or lower before the exchange facilitates the trade. Salt Fish fucked around with this message at 17:52 on Jun 21, 2022 |
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Jun 21, 2022 17:47
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Beartaco posted:Here's a really basic question. What determines "the price of bitcoin", how are all those fancy graphs drawn? Average selling price per coin every minute? Hour? And across what exchanges? Market price is literally the last trade made on a given exchange. Notably they use algorithmic sales, where they match the highest listed buy offer price with the lowest sell offer price and if they overlap, performing the sale(don't know who gets the arbitrage money). None of this involves the Blockchain by the way.
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Jun 21, 2022 17:50
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Squibbles posted:You don't get interest on stocks. If you buy one that pays dividends you get paid when they issue those (in more stock or in cash depending on the stock). Otherwise you just hold it and sell it later for hopefully more money This got me wondering: how do non-dividend yielding stocks even have value? The value proposition of a stock as I understand it is that you own a very small portion of the company and are also entitled to some portion of the profits as a result. Stocks are priced in part for the dividends they yield and also future expectations of the company’s performance, which would in turn influence the dividend yield? With a non-dividend stock you’re only hoping for the capital gain when you later sell it. But why should it have value at all if it doesn’t provide anything to the holder? Hope that question makes sense.
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Jun 21, 2022 17:52
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Shofixti posted:This got me wondering: how do non-dividend yielding stocks even have value? The value proposition of a stock as I understand it is that you own a very small portion of the company and are also entitled to some portion of the profits as a result. Stocks are priced in part for the dividends they yield and also future expectations of the company’s performance, which would in turn influence the dividend yield? With a non-dividend stock you’re only hoping for the capital gain when you later sell it. But why should it have value at all if it doesn’t provide anything to the holder? Hope that question makes sense. You also own a piece of the company's assets that can be sold if the company is dissolved. This nominal value of a stock is called the par value. It's flagrantly inaccurate accounting bullshit 100% of the time, though
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Jun 21, 2022 17:55
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Shofixti posted:This got me wondering: how do non-dividend yielding stocks even have value? The value proposition of a stock as I understand it is that you own a very small portion of the company and are also entitled to some portion of the profits as a result. Stocks are priced in part for the dividends they yield and also future expectations of the company’s performance, which would in turn influence the dividend yield? With a non-dividend stock you’re only hoping for the capital gain when you later sell it. But why should it have value at all if it doesn’t provide anything to the holder? Hope that question makes sense. I suspect the value proposition of such stocks are some mix of, yes, the greater fool hope; but also the prospect that they will have future dividends, or in many cases that some bigger fish will buy them out and you will get a payday there. For instance, I gather Elon Musk's pitch for buying Twitter is that he would pay $54.20 per share, so if you had 200 shares of Twitter (for some reason) Elon Musk* would be cutting you a check** for $10,840 (terms and conditions apply).
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Jun 21, 2022 17:59
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Shofixti posted:This got me wondering: how do non-dividend yielding stocks even have value? The value proposition of a stock as I understand it is that you own a very small portion of the company and are also entitled to some portion of the profits as a result. Stocks are priced in part for the dividends they yield and also future expectations of the company’s performance, which would in turn influence the dividend yield? With a non-dividend stock you’re only hoping for the capital gain when you later sell it. But why should it have value at all if it doesn’t provide anything to the holder? Hope that question makes sense. In my understanding, you are describing a “growth” stock. So your share(s) are a piece of the company, and you expect the company to grow and the growth of the company will make the stock more valuable, thereby leading to the price appreciating. Your stock in theory provides you with voting rights at stockholder meetings.
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Jun 21, 2022 17:59
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Shofixti posted:This got me wondering: how do non-dividend yielding stocks even have value? The value proposition of a stock as I understand it is that you own a very small portion of the company and are also entitled to some portion of the profits as a result. Stocks are priced in part for the dividends they yield and also future expectations of the company’s performance, which would in turn influence the dividend yield? With a non-dividend stock you’re only hoping for the capital gain when you later sell it. But why should it have value at all if it doesn’t provide anything to the holder? Hope that question makes sense. two basic ways: 1) a stock that does not pay dividends may not pay dividends because it's in "growth mode" - they are retaining earnings and using them to improve the business. the idea is that you will get much bigger dividends in the future once they finish growing. you are valuing the stock based on your assumption of when those dividends will begin, and how much they will be. for example, for a long time microsoft did not pay dividends - but now it does. google doesn't pay dividends but people assume it will someday. 2) a company can get bought out. for example, many tech companies goal in the past few years was not to make profits and return those profits to investors: it was to get bought out by google/facebook/apple/microsoft at a high value. so those companies were more valued by your hope that your share will get converted into cold hard cash google gave you (or, alternatively, some amount of their shares that you can readily convert to cash or receive dividends on whenever google gets around to starting to issue dividends). google, of course, expects to make that money back by using the assets and collecting the profits from that use directly.
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Jun 21, 2022 18:01
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Star Man posted:We're thirteen years into this bullshit and I still don't get it. As others have pointed out, some stocks do pay out dividends. But for many they do not and you are mainly hoping for the value to increase. And you only realize gains whenever you liquidate them. Even though you absolutely can get scammed re the value of a stock and their values can bubble beyond any reasonable estimate of the company’s true value, at least with a company there is a bedrock value of its parts that can be assessed with some objectivity. So even if people decided Apple or Tesla were worthless, the company will have cash in its coffers vs debt it owes that can be counted. It will have inventory of product on hand that is with the going price. The factories, equipment, supplies and raw materials in its inventory can be assessed. So at the very least the company should be with these tangible assets minus any debt or liability, so as long as that value is positive the company will be worth at least that amount at minimum even if it were judged to have no future prospects. Crypto doesn’t have any of that. There’s no foundation of tangible assets and income stream that can be objectively valued. Just market sentiment.
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Jun 21, 2022 18:04
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oh i missed option 3: stock buybacks sometimes companies, rather than pay dividends, use their cash to buy back their own stock (iirc this is tax-advantaged, and also stock-boosting-to-help-the-ceo's-stock-options-get-in-the-money-advantaged). this, also, provides a way to use the retained earnings of the company/asset value of the company to convert your equity share into cash in a manner other than selling it to another third party. stock buybacks are basically a disguised dividend, that you can either receive in the form of additional ownership in the company OR conversion of your ownership to cash, but are basically the same thing - a transfer of profit from the company to the shareholders.
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Jun 21, 2022 18:07
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Zwabu posted:As others have pointed out, some stocks do pay out dividends. But for many they do not and you are mainly hoping for the value to increase. And you only realize gains whenever you liquidate them. And even more basic than that if you buy a stock in a company, you are buying a teeny tiny part of that company that (in theory) is providing a real good or service to the economy. If you are buying stocks in commodities, at least the commodity prices are tied to real things in the economy and (in theory) react based on the real world. Even buying DIJA, S&P, NASDAQ or whatever, you are buying portions of the economy. This isn;t to stay they aren't subject to corruption, scams, or whatever but there is SOMETHING connected to what you are buying. BitCoin is literally buying a thing that doesn't do anything.
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Jun 21, 2022 18:10
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Yeah like Tesla is hilariously overvalued for a number of reasons, but even if you hate their cars, Tesla makes automobiles that you can in principle purchase and drive around. Apple, similarly, produces all sorts of smooth computing objects under the wise guidance of the shade of Stebe.
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Jun 21, 2022 18:11
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Mooseontheloose posted:BitCoin is literally buying a thing that doesn't do anything. bitcoin actually does negative thing (consumes energy)
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Jun 21, 2022 18:12
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What everyone isn't realizing is that Bitcoin being fairly stable at $20000 is the same ATH we had in 2017 when the market was full of speculators. The speculation/shakey money has now morphed in to the solid/long term money. This is a very good thing and a great new level for us.
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Jun 21, 2022 18:13
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Vampire Panties posted:
 Scratch Monkey posted:No cash! Only HODL! That's basically it. The rules have changed over the past few decades, and leases can rage from like 50-70? years, and may or may not be transferrable to the next generation of the family, etc., but it all boils down to the "buyer" leasing the building/land/apartment/coffin from the government and little else. Same for farmers and the land they till. Also, if I recall (and might be wrong, though), some areas/buildings carry more "risk" because of rampant redevelopment, so leases might be shorter or come with the expectation that the local government is going to kick you out after paying you some value for the property (which can be more than you expected, far lower than you expected, or a pittance because lol). Buying a new development means no issues from neglect from previous owners (just the shoddy work instead), but also the longest lease terms without fear of the government deciding to bulldoze it to put up something bigger. A common scheme in the past was trying to figure out where the government was going to be putting a metro station and buying a cheap apartment or two nearby to either get maximum rent out of people in the future or getting the best possible payout from local government when they decide to develop the area due to higher human traffic.
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Jun 21, 2022 18:18
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All of the 
proof 
"This is good for Bitcoin"
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Thanks for the thorough explanations!
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Jun 21, 2022 18:19
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The real estate market and bitcoin go so well together it's almost like cocaine money and the real estate market.
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Jun 21, 2022 18:22
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Nessus posted:You probably do not have the deep-rooted idea that you should be getting wealth simply by owning property of some kind - not for owning it and doing something with it, or improving it, or for providing a good or service to the general market place, or even that you should be getting a basic subsistence no matter what and should also have a little patch of your own. Other people are talking about what stocks are and how they differ from crypto because they represent ownership of a real productive asset, but I want to respond to this post as well: Getting wealth simply by owning property of some kind--be it real estate, farmland, stocks, bonds etc--very much is the essence of capitalism. People without capital have to sell their labor for a living, and people with capital "allow" laborers use that capital, and in exchange get a portion of their labor value. Without getting too D+D/CSPAM about it, it's up to you how to feel about that. Some will call that exploitative and unfair. Some will say that paying capitalists for their ownership of capital is necessary to promote continued investment and improvement, and that the capitalist system is a necessary evil to reward investment and promote human advancement. Some--like most Bitcoiners--will say that the exploitation is the point, and their only regret is that they are among the exploited rather than the exploiters.
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Jun 21, 2022 18:22
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Bitcoin wastes gently caress tons of electricity and consumes poo poo tons of expensive resources that could be going in the other computer chips. Also stocks don’t have the problem where they can become too low for them to be “affordable to mine.” Also bitcoin was supposed to protect you from inflation but that’s the most obvious lie because every single coin continues to make more of themselves which is the exact opposite of protecting you from inflation. Bitcoin is just a wasteful scam.
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Jun 21, 2022 18:22
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Coolness Averted posted:Pegging currencies happens in the real world too, usually it's not as simple as 1:1, also usually it's by someone with actual power. For example the Chinese yaun is pegged to the US dollar, currently around 1:7. Yeah but their dumb algorithm just assumed that the coins were trading 1:1 without actually checking. You tell me if that looks like a good idea run on sentience posted:Are enough people into crypto that this crash will have major effect on the rest of the "economy" of certain countries or industries? I know everything is already going to poo poo everywhere but is this going to hit anyone hard outside of crypto people? Right now the market cap of all crypto is standing a little shy of $1 trillion. That might sound big but it's really peanuts. The market cap of the S&P 500 is 36.7 trillion. Also most of that crypto market has very little exposure to the market at large; most of it is loans of crypto to make bets on other crypto.
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Jun 21, 2022 18:23
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Shofixti posted:Thanks for the thorough explanations! Something Awful my rear end.
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Jun 21, 2022 18:28
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I imagine the S&P 500 would freak out a little bit if a trillion dollars of 36.7 trillion was lost.
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Jun 21, 2022 18:29
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I don’t know if it would. That’s 2.78% and well within normal fluctuations: https://ycharts.com/indices/%5ESPX
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Jun 21, 2022 18:34
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it is critical to understand what underpins an "investment" to understand if it is, in fact, an investment, insurance, or just degenerate gambling. bonds and equities are using your money to fund an enterprise that intends to generate a profit by, basically, creating useful things or supplying useful services. you spend $10 million building a factory, that will generate $1m in profit indefinitely. there is a positive expected value because, on average, capital invested in business generates a profit. bonds and equity differ in the allocation of risk/reward, but you are making money by generating real value in the market. trading in the market is shifting around who owns the rights to those future profits, but you are not trading "against" that counterparty - you are finding someone who prefers future cash more than you do (at the current price for it). futures (commodities trading) and options are negative EV. every dollar you make comes from the other side of the trade. if i buy an option from you, you and i are betting against each other. every dollar i make is a dollar you lost. same for futures: every dollar one side gets, the other side lost. no "value" is created here - it is purely a bet between two people and one side wins. it becomes negative EV because the house takes a cut. the only "value" created is, in essence, insurance. take futures on wheat. a farmer needs to get a certain amount of profit, or they lose their farm (causing additional losses) - wheat prices being too low hurts them by a lot more than just the lost profit. so they want to sell their wheat in a futures market to "lock in" a good price even if that is losing some potential value - because they are shifting the risk of loss to a party less harmed by it. that is the only potential "value" in futures/options markets - hedging against a risk that would cause knock-on effects. similar to how you know fire insurance on your house is negative EV - but if you lose your house and all your possessions your life is going to be wrecked a lot more, so you'll take the loss of $50 per month in EV to avoid the potential effect of being homeless, then losing your job, etc etc etc. buying a commodity for the sake of holding it is basically futures trading, just with way less leverage (which is not nothing, considering it is trivial to lose more than "everything you put in" in futures trading), with the cost of holding the commodity. greater-fool trading is even more negative EV because the underlying asset has no value. beanie babies, or tulips, are eventually going to zero. if you buy them above zero, someone (you, or the next guy) are losing all that money. perhaps you sell it at a gain because you get lucky - but then the next chain of fools is losing even more money. crypto has tried to pretend its "generating value" to fit into the first category, but it's always bullshit. most ICOs are, transparently, pitching the "coin" as essentially equity in the new venture. the issue is every time you dig into their claims there's no there there, and no way of generating value (and, of course, you have the massive deadweight loss of mining draining cash out of the system), it's purely greater fool speculation. evilweasel fucked around with this message at 18:36 on Jun 21, 2022 |
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Jun 21, 2022 18:34
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Cantorsdust posted:Getting wealth simply by owning property of some kind--be it real estate, farmland, stocks, bonds etc--very much is the essence of capitalism. People without capital have to sell their labor for a living, and people with capital "allow" laborers use that capital, and in exchange get a portion of their labor value. There is the ownership of capital... that does something: a hog farm produces hogs, a Tesla factory produces cars. You can go "OK, this is a factory that produces electric cars." Even with more abstract industries you can often at least squint and say "Alright, they sell advertising" or "OK, they sell the program 95% of the world uses to type a sentence on the computer." Then there is the ownership of capital... that just sits there and goes up. This is Bitcoin, and probably other assets. It's not mixing with anything to produce value, no laborers are involved other than maybe barest maintenance. Even without advanced theory or thinking people tend to object to the second more than the first, especially when the second one is made glaringly clear (empty buildings during a housing crisis, fallow land during a famine, etc.) However, I think for a number of people, the second one is intrinsically more appealing -- the point is the passive return on capital, even if you could hypothetically make far more. It's an emotional, status-based thing.
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Jun 21, 2022 18:35
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HappyHippo posted:Right now the market cap of all crypto is standing a little shy of $1 trillion. That might sound big but it's really peanuts. The market cap of the S&P 500 is 36.7 trillion. Also most of that crypto market has very little exposure to the market at large; most of it is loans of crypto to make bets on other crypto.
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Jun 21, 2022 18:36
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Cantorsdust posted:Other people are talking about what stocks are and how they differ from crypto because they represent ownership of a real productive asset, but I want to respond to this post as well: it is very, very important not to get c-spamish about this discussion because all it does is confuse the issue. what we're talking about is the generation of surplus value. capital, in this sense, is the investment of goods and labor into an enterprise that will produce goods of greater value than the inputs - classically, "building a factory". who gets that excess value is the political debate. that you can generate greater value is not a political debate: communist countries build factories too, it's just they distribute the created value differently. for something to generate value, it needs to have outputs of more value than the inputs. the inputs for cryptocurrency are expensive electricity. the outputs are waste heat. value is destroyed in this system.
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Jun 21, 2022 18:40
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run on sentience posted:Are enough people into crypto that this crash will have major effect on the rest of the "economy" of certain countries or industries? I know everything is already going to poo poo everywhere but is this going to hit anyone hard outside of crypto people? Well since the president of El Salvador forced his country to adopt Bitcoin as the national currency I would imagine its having a pretty big effect there. I’m gonna guess some guy living week to week selling food from some street cart isn’t going to be doing great in the current circumstance and probably isn’t looking to “buy the dip” and probably has no resources to do so even if he wanted to.
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Jun 21, 2022 18:40
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Blotto_Otter posted:Market cap's bullshit, though. It's a little bit bullshit when talking about the S&P 500, it's extremely bullshit when talking about a bunch of speculative investments that are thinly traded on sketchy unbanked exchanges that fake a lot of their reported transaction volumes and/or falsely denominate trades in "dollars" when no such dollars are being traded. Yes, absolutely (that's why I pointed out that most of it is loans on other crypto). It's also worth pointing out that the "crypto market cap" was $3 trillion in the fall. It literally lost 2/3rds of it's value in a few months, and while yeah the "regular" market hasn't been doing so hot in that time, the reasons for that have nothing to do with crypto. 2/3rds of crypto "wealth" vaporizing in a few months had virtually no effect on the regular market.
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Jun 21, 2022 18:40
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