Republicans favor the rule of law, and taking the view that they should support a "winner" without regards to the means used to win is actually reversing their views. The Democrats are the party that favors an outcome without regard to the process used to achieve it.
FWIW if we're being clear I am talking about 'right-wing' in a broad-strokes manner, not Republicans. While
some right-wingers are on the law side of things, many are not. For example among the mega-industrialists who tend to be right-wing John Birch types they are constantly pushing for less regulation and more freedom to conduct business as they see fit. The general MO there is "get out of my way", rather than "uphold the laws and ensure business is equitable". There are obviously others who are more on the law side. I would not outright paint right-wingers as being one or the other outright, but again, in the broad strokes right-wingers are typically in the "who are they to tell me what I can and can't do" camp while left-wing types are typically in the "hey they shouldn't be allowed to do that!" camp. Naturally the detailing will vary person to person. I am not really impugning either side as there are merits to each.
Except this is contradicted by reality. Crypto is at a fundamental level not zero sum. For zero sum to exist your gain in value has to come at my expense. I have to lose something real.
Zero sum long-term, not short term. If the guy holding the bag at the end if/when it goes to zero is counted as part of your transaction
right now then you are profiting at
his expense. This scenario can of course be avoided indefinitely, in theory, so the actual loser may never appear, or at least you never see him until he does.
Crypto is fundamentally just confidence. Confidence is not a finite resource and it's absolutely not zero sum. Two crypto traders can trade crypto assets and cause both assets to increase in value.
Confidence can have a value in the market sense, but not in the instrinsic sense. So long as you're only talking about tickers on a screen then yes, crypto has value obviously. If you're asking what that value is based on obviously the answer is 'nothing'. It has value because people will pay you for it, that's it. Promising people returns on it is just as much as to say you're being promised people will believe tomorrow what they believe today. That's some promise! Contrast with a stock, where if for some reason the market value of a company's stock dropped to near-zero, the instrinsic value of the company will always be a reality that doesn't care about the stock. If the stock price drops too low due to 'lack of confidence' the company can just repurchase all its shares and go private again, or something to that effect. So there is no "uh ok! this is worthless now" scenario for a company doing real business.
While crypto is different than any other currencies, you can still ask yourself why people accept dollars in exchange for real goods. It's not because the dollar itself has a value, its because of a long confidence that the dollar means something. Is it really different if its a government that represents 300m people that says it has value, or 300 million people not represented by a government that say something has value?
The fact that governments insist the currency has value means everything. It has a guarantor that, if that guarantor fails, you have bigger problems than your portfolio suffering. Furthermore, that guarantor will attack with actual force any parties trying to oppose or undermine this established currency. It matters
a lot! If you want to be blunt about it, think of it like a mob gang using its own scrip. Why is their scrip worth something? Because they will kill you, that's why. And historically that's about as good a reason as any. Further, since the U.S. $ is still effectively the world's reserve currency that gives is a special place even among government-backed currencies. Crypto has none of these features, not on the utility side and not on the legitimacy side. It's basically all but useless other than as a collector's item, like other NFT's.
Or maybe to explain it in tangible terms. Why is the Mona Lisa considered to be such a valuable piece of art?
Because art has real, instrinsic qualities, that are objective and are physically built into the piece, to put it a certain way. A real man named Da Vinci painted the Mona Lisa; that's not a 'confidence' issue but a physical fact about its origin. It uses certain materials, has certain brush technique, has had a certain buy/sell history. These are real, non-made-up elements that are baked into its market price. Now if you were to ask me to explain why its current market price
should be that value I would be stuck. I don't think there's a good explanation of why its current price need to be that price specifically. But it's absurd to ask why it's valuable at all.
Is the Mona Lisa objectively more pleasing than pop art that people hang in their homes in generally far more prominent places? The Mona Lisa's value is not inherent it's purely a matter of agreement of the masses.
Yes, and I guess Mozart's Requiem is "just as good" as Oops, I Did It Again, since both are just a popular vote of which they listen to more? But no, there are intrinsic engineering techniques that went into the composition of each, and while they are maybe both important in some historic sense, they aren't arbitrarily the same in terms of what their content is 'worth' artistically. Commercially, that's another matter. The Mona Lisa's value is definitely
not just based on some agreement between snobs. If all the snobs currently alive died suddenly and all artwork was placed in a giant vault, and discovered again in 500 years, that would still be a valuable piece because of what it is.
There are people to regulate. That's pretty much how the SEC got control of the stock market. Issuance of stock was completely private in most of history. It probably was impossible to imagine the kinds of controls we think are second nature. Crypto (at least past basic things like bitcoin) is heavily exposed because to have value it has to have hype and leaders and spokespersons. All of those people could be directly regulated.
Truthfully I don't know if it's either (a) possible, or (b) meaningful to regulate crypto. What kind of SEC declarations could crypto buyers/sellers actually produce? And technologically, is it even possible to stop people doing things with it at their will? Wasn't the whole point of crypto to go under the radar, stick it to the man (loosely speaking), and engage in transactions outside of the formal system? It would be kind of ironic for this area to become part of the system. I have no idea what's possible in that regard.
Not to mention, crypto that can't move into the real world is pretty weak, and those are additional points of contact.
Yes, it is pretty weak, and this will not stop. At such a point as the government perceives a real move being made to bring crypto into regular purchasing experiences they will make a strong move to clamp down on it.
Terra-Luna - the example at hand - was paying 20% interest on deposits. I grant you those earnings were not based on cash streams but rather based on rising confidence in all crypto assets. But you could buy and sell them and take the profits in other currencies.
As yossarian mentioned, this is structurally the same as a ponzi scheme. It's just MLM structured in a somewhat more transparent manner and not technically illegal. But so what?
As to subscribers, not sure what you even mean, there were hundreds of thousands of people holding the tokens.
By subscribers I mean real world assets generating revenue. The equivalent would be Netflix's stock price vs its subscriber base. Both are tanking right now, but they are separate things. A subscriber base is something a bank will take seriously as company value; it's something that exists in the real world assuring the solvency of your product.
Growth? Actually a ton and not just in value. The point of the Terra-Luna model was to create ever more linking utilities to the platform. To add material features. That happened and there were constantly more things available in their eco system.
Stock price going up =/= growth. That's just a ticker changing numbers. Growth means real value is added. Now if some crypto platforms do offer real value beyond the tokens themselves, then at least in that case they would be offering a 'product' in addition to shares in the coin.
There is a lot of hype, but the value inherent is in being able to buy and achieve things that you could not buy or achieve previously. There's lots of evidence that's actually happening. Take a look at the DAOs that are out there. Some are just implementing exiting paper mechanics, but others are truly innovate in allowing a group to make collective decisions that are implementable in real time.[/quote]
What you're describing is no different than the dot com bubble. People excited, new ways to do things, and all the rest. But it wasn't based on real value or earnings potential, the numbers were made up, and of course it popped. And even those were 'real' products, just not ones that could generate revenue yet.
And the market for years of Tesla wasn't? The company had billion dollar valuations when it was producing hundreds of cars (total in a year). Facebook had billions in valuation when its revenue stream was tiny. Granted, there was a lot of potential there, but you're kidding yourself if you discount the potential that's currently in the crypto space.
There is a kind of line where being an investor and being a gambler can intersect, and simply being part of a historic even can be worth money to people. Is going to Disney World a "bad investment"? No, you're willing to take the hit for the experience. Tesla has appeared to be a combination of the three. This does not make it equivalent to crypto, although there may be some overlap just like there is overlap in any events involving human psychology.
It's only a ponzi scheme if it's not generating value and the primary source of returns is from new contributors. The primary source of returns on digital assets is not from the redistribution of new contributions, but from the speculative swelling in the price.
I'm...uh...surprised you are making this distinction in order to show...actually I'm not sure what you're trying to show. That's it's not like a ponzi scheme? Or that it's similar but better? Or just as bad but slightly different? I guess I don't see the point of this remark.
