Molly WhiteDec 29, 2022
i feel like i might question my chosen industry just a little bit if i found myself having to write an article like this
Show threadindustrial curiosityDec 29, 2022

@molly0xfff investing in crypto? yep, you can call that a ponzi scheme. but that's not what crypto is for.

crypto in and of itself is no more or less fraudulent than any fiat currency or forex/stock trade, and just like fiat currencies it only gains *real* value when used for economic transactions.

an investment... is not an economic transaction.

so all the investors are ironically the main reason crypto hasn't been able to gain traction / make much of an impact.

Show threadUnlettered PeasantDec 29, 2022

@industrialcuriosity I strongly disagree with this. While fiat currencies have their problems, they tend to have strong regulatory structures in place that are designed to protect the consumer. FDIC (for banking) and SIPC, SEC etc (for investors). There are no such things for crypto, and customers have no protection, no place to go if things go bad.

And every time I make an investment, it is absolutely a financial transaction.

Crypto doesn't behave as currency. It behaves as a security.

Show threadindustrial curiosityDec 29, 2022
@justanotherengineer an investment is speculation, you're not purchasing goods or services and getting guaranteed value. as for protections, you might be right but only to a point; in practice victims of real life fiat ponzi schemes don't really have much recourse when their money's already been spent
Show threadUnlettered PeasantDec 30, 2022

@industrialcuriosity So you're partially true in that any investment is speculation. But investments in public markets (I'm not going to get into private markets here, though most of the same principles apply).

Your "guaranteed value" is a straw man, though. There is really no such thing, as prices or values aren't fixed and never guaranteed.

But when you buy a stock, you are buying an ownership stake that's backed by earnings, capital, real property/IP. It's not purely speculative.

Show threadindustrial curiosity
@justanotherengineer for "guaranteed value" there's absolutely such a thing and it's critical to a functioning economy. if you sell me a product or a service, we agree on the value in the moment and transact accordingly. how much was the famous two-bitcoin pizza actually worth? two bitcoin. that's how markets work. if i cannot easily be paid for a service rendered and be confident that i can then use that currency to pay my own bills, (continued)
Dec 30, 2022 at 7:24amWeb
Show threadindustrial curiosityDec 30, 2022
@justanotherengineer (continued) then the currency itself has little inherent value. until such time as i can pay my rent and bills without converting to fiat currency, crypto is useless to me. until ordinary people are all doing so (as opposed to investing), the value will continue to fluctuate wildly. it's a vicious circle.
Show threadUnlettered PeasantDec 30, 2022

@industrialcuriosity
So then I don't understand how you use that standard and say investments are pure speculation. If I pay two Bitcoin for a pizza I can certainly also use two shares of Tesla or actual fiat currency.

The problem with using Bitcoin or Tesla is that the value at a given point in time can vary widely, which makes them not so good for everyday transactions. Fiat currency varies, but not with such wide swings.

Show threadindustrial curiosityDec 31, 2022
@justanotherengineer that's not really how investments work, an investment is a bet that something's value will increase. good luck finding someone who's trying to make rent who's willing to sell you groceries for magic beans... what we need for day-to-day economic transactions is relative stability - trust - which we only get by using a currency for day-to-day transactions in large numbers.