Korea: Crypto is changing the world before our eyes, it's a black and white swan event combined. Better to adapt than stick your head in the sand.
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Crypto is changing the world. I've made money off of bitcoin, but I've done so responsibly, like I suspect must people on HN have, by only betting what I could easily afford to lose.
By going mainstream that sort of reasonable/safe approach has ended, and people are now happily risking their entire savings. This will certainly be great for some people, but it also has the potential to be absolutely devastating.
In America you may not care about that, but in my part of the world, this means that we're sitting on a real risk of society having to clean up after a bunch of people lose everything.
The old world financial system is regulated to prevent regular people from losing everything on investments. I suspect that in time Crypto will be regulated similarly.
This isn't very libertarian, I know, but I'm old enough to have seen a few bubbles burst and the result isn't pretty.
Nothing of value is being created, at least not of the magnitude of the apparent “value” of the bubble, so making money off bitcoin is by definition getting money from someone else. Clearly it cannot work forever, and those who are left holding the bag won’t be happy.
You mean like stocks and all other derivatives and equities including the US dollar and other currencies on Forex. Smart.
Except stocks represent ownership in real companies making real products. If one person owns 100% of a company and there is zero trading, it's still an extremely valuable property. If one person owns 100% of a crypto, it is worthless.
> Except stocks represent ownership in real companies making real products.
But what does that mean in practical terms? Sure, if the company gets bought out you might get some cash, and some companies still pay dividends. Aside from those cases, though, shareholders have no direct claim on the company's assets, and only the largest shareholders have significant influence on the company's board. Most profits made by shareholders come from selling their shares to another investor, not from the company itself.
> If one person owns 100% of a company and there is zero trading, it's still an extremely valuable property.
Assuming the company is solvent... plenty are not, despite a positive stock price. They are trading on the expectation of future improvement, not present value.
> If one person owns 100% of a crypto, it is worthless.
Every cryptocurrency (every non-commodity currency, for that matter) starts out owned 100% by someone. That doesn't make them all worthless. Say I create a new currency with one million units, wholly owned by myself. If I stop there, no one else will value my currency. However, say I also arrange to sell widgets (standard market value $100) in exchange for 100 units of my new currency. Now my currency has value, and people who want widgets may well be willing to trade other goods or services for it—perhaps not 1:1, due to the lower marketability, but at some discounted ratio. This makes more goods available; people who have no need of my widgets may still transact business using my currency and accept it as payment. At this point I no longer possess 100% of my new currency and it has taken on a life (and market value) of its own. Even if I stopped producing widgets the currency may well remain in circulation as a marketable commodity.
https://www.investopedia.com/terms/s/storystock.asp not to mention the public company manipulations, scams and out right fleecing of investors.
When you write a program/app/website and someone uses it, is there nothing of value created?
I admire the certainty of the naysayers on this thread. I only wish I could borrow their crystal ball.
For an “infrastructure” that burns dozens of terawatts of power per year I would at least expect fast transactions, and yet...
MFW it takes up to two weeks for an international wire transfer to clear.
MFW banks are closed on Sundays.
There's this thing called the internet which lets you make transactions even when your bank is closed. Also, for most purposes it's safer to do credit card purchases than international wires.
Why do you need to send a wire transfer? A giro transfer clears within a few minutes, and a credit card charge is accepted within seconds. What's the use-case that is not acceptably covered by those options?
I'd never heard of a giro transfer. In the states we use ACH and it takes 2-5 days to clear. The ACH numbers are also reusable - your numbers never change, and they can be used for withdrawal as well as deposit.
My point is that this a solved problem worldwide, ACH is slow and inefficient, and checking just piggybacks on ACH.
It's not normal for bank-to-bank transfers to take two weeks to clear in TYOOL 2017. This is a US problem.
How many international wire transfers does a typical person make in their life?
I've made a few, but ironically they were all to the bank accounts of cryptocurrency exchanges when I was funding my account.
Can you elaborate on "society having to clean up after a bunch of people losing everything."? Perhaps I'm reading too much into your post, but so far as I can tell you're suggesting you reside in a nation with stronger social systems than the US. And a number of people failing, who otherwise would not have, could pose a strain on such systems. Yet this is confusing to me since presumably we're speaking of older individuals. Young individuals are, generally, still earning money and so they are already sustaining their own livelihood regardless of their savings (or [sudden] lack thereof). But back to the older individuals, would these individuals not already be receiving social benefits - healthcare, social security, etc? It seems that their personal dependence on these would increase - but their burden on society would not change, at least not particularly meaningfully.
Like I said, probably reading way too much into your comment. Curious what you meant!
> Yet this is confusing to me since presumably we're speaking of older individuals. Young individuals are, generally, still earning money and so they are already sustaining their own livelihood regardless of their savings (or [sudden] lack thereof).
Plenty of young people are easily to dupe with get-rich-schemes too. And earning money is not that helpful, especially on the poorer end - I mean, imagine that right now all your savings went to 0. Somebody cleared out your savings account and all the spare cash you happen to store around the house. Are you comfortable with that situation because you still have your job? Now consider a person on a regular, shitty, low-paying high-demand job. A loss of all money buffer can, through small unexpected expenses, quickly push someone into poverty.
So now these people stop contributing to GDP, because they can't hold a job (had to sell a car to eat, etc.), and they get on welfare, and they are unhappy and spread that unhappiness around, and if there's enough of them, they'll make a stink in the media about government not doing enough to protect their people.
This is not something socially desirable.
You have a contradiction in your logic. Poor people working "regular, shitty, low-paying high-demand jobs" do not have savings. The numbers may vary somewhat by country but here [1] they are for America. 85% have less than $10k. 50% have less than $1k. 34% have $0. And there's probably going to be a pretty good correlation with savings and income. The 15th percentile in household income is about $120,000. Interestingly enough indicating even relatively well off Americans are awful at saving!
[1] - https://www.fool.com/investing/2016/09/25/how-much-does-the-...
We were not talking exclusively, or even in particular, about the US, though.
Interesting! Those data are indeed specific to the US and I expected the numbers would vary by nation, but not radically so. I enjoy learning more about economics and the fact there is a nation where even the poor have substantial savings is quite bemusing to me! Do you have any sources available?
See upthread comment on Albanian civil war caused by too much of the country losing everything all at once in a set of pyramid schemes.
Relax. Looking across the sea, Japan has been positive on cryptocurrencies. Japan is always Korea's main rival and influencer when it comes to technology and everything else. This rivalry is deeply embedded in the Korean psyche. Most likely they will follow Japan's lead, they would not risk Japan taking any pieces of the crypto-currency pie from them.