6 ms·

Well, once all these go down the prices of currencies will also come down, which affects even those who had their coins in cold wallets - unless they plan to ho

by gergov 4y ago

Well, once all these go down the prices of currencies will also come down, which affects even those who had their coins in cold wallets - unless they plan to hold without making a profit until the heat death of the universe

rglullis 4y ago
Plenty of people were underwater with their mortgages in 2008, but home prices came back up not too long after.
- JumpCrisscross 4y ago
  > Plenty of people were underwater with their mortgages in 2008, but home prices came back up There is a pretty fundamental difference between houses and crypto.
  - birracerveza 4y ago
    Houses get destroyed, the blockchain is eternal. /s /s
- AndrewStephens 4y ago
  The difference is that house prices were for material objects that people actually need, and sales are supported by a huge industry of agents, lawyers, and governments to facilitate the safe transfer of houses. None of that exists in the crypto space. The exchanges control the price and regularly trade against their own customers, and recent events have shown that they are all co-mingled and propping each other up. Exchanges going down is bad news even if you keep your coins in your own wallets. With the exchanges gone, actually using your coins will become much harder. Worse, as power consolidates among fewer exchanges the price becomes even easier to manipulate.
  - rglullis 4y ago
    > None of that exists in the crypto space. Bullshit. It exists, it's just that the UI/UX is awful and most people in the developed world have no need for it. But they do exist. My work on hub20 [0] is exactly that, to have a system that would let people and communities create their actual self-custodial "crypto banks". [0]: https://hub20.io https://hub20.io
    - AndrewStephens 4y ago
      I should have made myself clearer - none of that (agents, lawyers, etc) exists in crypto _apart_ from the exchanges, which are meant to facilitate the transfer of crypto assets. The two problems with this setup are: * The exchanges are dishonest and unregulated. * The exchanges are exploding like a chain of firecrackers. So crypto is going from a state of having most transactions go through dishonest exchanges to being in a state where people own crypto but trading will become almost impossible. Is the price going to go up? Will it go down? It doesn't matter, since without exchanges you can't actually use it for anything.
      - datadata 4y ago
        Exchanges don't need to act as long duration custodians for them to serve their purpose or be profitable. Exchanges will make a profit from trading fees. They can attract capital and liquidity via market maker fee rebates. You can trickle your capital through an exchange to make a large trade incrementally and only ever risk an arbitrarily small percentage of your total capital. There are ways to run exchanges in a much less sketchy way, that while not perfect, would make the kind of horrific abuse of customer funds that FTX did not possible. For example, merkle tree proof of reserves.
      - rglullis 4y ago
        > since without exchanges you can't actually use it for anything Before repeating your baseless argument, please read about my project. Start with the about page. Understand that we can have global commerce with crypto without the big centralized exchanges. It's only an issue of scaling down and accepting that even though "trust" is needed for efficient transactions, this can happen at a much lower level.
  - datadata 4y ago
    An important reason that house prices went up in the years following 2008 is because the federal reserve printed over a trillion dollars to buy mortgage backed securities to add liquidity to the housing market [1]. Houses have a real value, yes, but that value was propped up well beyond the fundamentals (similar to crypto) and got a "bailout" (which crypto will hopefully not get). [1]: https://fred.stlouisfed.org/series/WSHOMCB https://fred.stlouisfed.org/series/WSHOMCB
    - BoiledCabbage 4y ago
      The Fed printed money to prop up the price of derivatives, not the price of house. Huge difference. Houses themselves fundamentally have intrinsic value as an asset. A currency has no intrinsic financial investment value. Especially not an arbitrarily created crypto currency. The only reason it's price would go up is people speculating that someone else will want to speculate on it in the future, and will pay a premium to do so. We all know what it looks like when the future speculators dry up.
      - datadata 4y ago
        > The Fed printed money to prop up the price of derivatives, not the price of house. I'm not sure your point here. Derivatives absolutely are a driver on the price of the underlying assets. Derivatives are what inflated the housing bubble prior to 2008. I generally agree with you that homes have an intrinsic value, and that currencies do not necessarily have that. But that intrinsic value of homes was probably around the bottom of the 2008 housing market, not the top. On either side of that, home values exceeded the fundamental value due do manipulation or excessive leverage. In my mental model, fundamental value merely establishes a price "floor" of a market, but beyond this price floor every market is subject to mania and bubbles. For housing, the fundamental floor is non zero, for crypto, you could argue that it is zero. > The only reason it's price would go up is people speculating that someone else will want to speculate on it in the future, and will pay a premium to do so. This is true for housing also. Having a intrinsic value does not mean that housing prices should be expected to go up forever. As a clear counter example, deflationary goods like computers have a clear intrinsic value, but are not a good investment as they will almost certainly lose value.
  - notch656a 4y ago
    No one 'needs' more than like 1% of a house. I have lived for months out of a bivouac, about $100 worth of nylon. A house is 99% crypto and 1% "need." Crypto follows a similar trajectory. The vast majority is speculatory and un-"need"ed bullshit and a tiny slice is stuff where it has a comparative advantage to traditional finance/money.
CyberDildonics 4y ago
Everyone is talking about losing their balance and you are conflating it with price fluctuations.
- tartoran 4y ago
  Let’s not shy away, those balances are a speculation on the future price of crypto. If the prices don’t go up they’re affected, simple as that.
  - CyberDildonics 4y ago
    That's obviously not what was being talked about in this context. The discussion was about being affected by suspended withdrawals if exchanges never give people their deposits back.
    - pessimizer 4y ago
      That's because gergov and tartoran were not making woah's point about people who don't have accounts at exchanges. They were making their own related point in reply, also about people who don't have accounts at exchanges, being damaged by price drops in the wake of problems at exchanges. Are they allowed to do that?

by gergov 4y ago

rglullis 4y ago

Plenty of people were underwater with their mortgages in 2008, but home prices came back up not too long after.

JumpCrisscross 4y ago
> Plenty of people were underwater with their mortgages in 2008, but home prices came back up There is a pretty fundamental difference between houses and crypto.
- birracerveza 4y ago
  Houses get destroyed, the blockchain is eternal. /s /s
AndrewStephens 4y ago
The difference is that house prices were for material objects that people actually need, and sales are supported by a huge industry of agents, lawyers, and governments to facilitate the safe transfer of houses. None of that exists in the crypto space. The exchanges control the price and regularly trade against their own customers, and recent events have shown that they are all co-mingled and propping each other up. Exchanges going down is bad news even if you keep your coins in your own wallets. With the exchanges gone, actually using your coins will become much harder. Worse, as power consolidates among fewer exchanges the price becomes even easier to manipulate.
- rglullis 4y ago
  > None of that exists in the crypto space. Bullshit. It exists, it's just that the UI/UX is awful and most people in the developed world have no need for it. But they do exist. My work on hub20 [0] is exactly that, to have a system that would let people and communities create their actual self-custodial "crypto banks". [0]: https://hub20.io https://hub20.io
  - AndrewStephens 4y ago
    I should have made myself clearer - none of that (agents, lawyers, etc) exists in crypto _apart_ from the exchanges, which are meant to facilitate the transfer of crypto assets. The two problems with this setup are: * The exchanges are dishonest and unregulated. * The exchanges are exploding like a chain of firecrackers. So crypto is going from a state of having most transactions go through dishonest exchanges to being in a state where people own crypto but trading will become almost impossible. Is the price going to go up? Will it go down? It doesn't matter, since without exchanges you can't actually use it for anything.
    - datadata 4y ago
      Exchanges don't need to act as long duration custodians for them to serve their purpose or be profitable. Exchanges will make a profit from trading fees. They can attract capital and liquidity via market maker fee rebates. You can trickle your capital through an exchange to make a large trade incrementally and only ever risk an arbitrarily small percentage of your total capital. There are ways to run exchanges in a much less sketchy way, that while not perfect, would make the kind of horrific abuse of customer funds that FTX did not possible. For example, merkle tree proof of reserves.
    - rglullis 4y ago
      > since without exchanges you can't actually use it for anything Before repeating your baseless argument, please read about my project. Start with the about page. Understand that we can have global commerce with crypto without the big centralized exchanges. It's only an issue of scaling down and accepting that even though "trust" is needed for efficient transactions, this can happen at a much lower level.
- datadata 4y ago
  An important reason that house prices went up in the years following 2008 is because the federal reserve printed over a trillion dollars to buy mortgage backed securities to add liquidity to the housing market [1]. Houses have a real value, yes, but that value was propped up well beyond the fundamentals (similar to crypto) and got a "bailout" (which crypto will hopefully not get). [1]: https://fred.stlouisfed.org/series/WSHOMCB https://fred.stlouisfed.org/series/WSHOMCB
  - BoiledCabbage 4y ago
    The Fed printed money to prop up the price of derivatives, not the price of house. Huge difference. Houses themselves fundamentally have intrinsic value as an asset. A currency has no intrinsic financial investment value. Especially not an arbitrarily created crypto currency. The only reason it's price would go up is people speculating that someone else will want to speculate on it in the future, and will pay a premium to do so. We all know what it looks like when the future speculators dry up.
    - datadata 4y ago
      > The Fed printed money to prop up the price of derivatives, not the price of house. I'm not sure your point here. Derivatives absolutely are a driver on the price of the underlying assets. Derivatives are what inflated the housing bubble prior to 2008. I generally agree with you that homes have an intrinsic value, and that currencies do not necessarily have that. But that intrinsic value of homes was probably around the bottom of the 2008 housing market, not the top. On either side of that, home values exceeded the fundamental value due do manipulation or excessive leverage. In my mental model, fundamental value merely establishes a price "floor" of a market, but beyond this price floor every market is subject to mania and bubbles. For housing, the fundamental floor is non zero, for crypto, you could argue that it is zero. > The only reason it's price would go up is people speculating that someone else will want to speculate on it in the future, and will pay a premium to do so. This is true for housing also. Having a intrinsic value does not mean that housing prices should be expected to go up forever. As a clear counter example, deflationary goods like computers have a clear intrinsic value, but are not a good investment as they will almost certainly lose value.
- notch656a 4y ago
  No one 'needs' more than like 1% of a house. I have lived for months out of a bivouac, about $100 worth of nylon. A house is 99% crypto and 1% "need." Crypto follows a similar trajectory. The vast majority is speculatory and un-"need"ed bullshit and a tiny slice is stuff where it has a comparative advantage to traditional finance/money.

CyberDildonics 4y ago

Everyone is talking about losing their balance and you are conflating it with price fluctuations.

tartoran 4y ago
Let’s not shy away, those balances are a speculation on the future price of crypto. If the prices don’t go up they’re affected, simple as that.
- CyberDildonics 4y ago
  That's obviously not what was being talked about in this context. The discussion was about being affected by suspended withdrawals if exchanges never give people their deposits back.
  - pessimizer 4y ago
    That's because gergov and tartoran were not making woah's point about people who don't have accounts at exchanges. They were making their own related point in reply, also about people who don't have accounts at exchanges, being damaged by price drops in the wake of problems at exchanges. Are they allowed to do that?