Cryptos are inherently volatile because they’re natural Ponzi-schemes with no oversight hence no crack-downs by the Law, and have low liquidity - they pull ill all manner of greedy types, suckers and swindlers and naturally end up with boom/hope-bust/fear cycles which have large movements due to the low liquidity of them as an asset. They’re also far easier to manipulate with very little investment, especially the smaller ones (exactly the ones that you claim aren’t as volatile).
The Tech per se doesn’t make so, it’s what it allows crossed with human nature that makes it so.
Tradeable essential goods are not supposed to be currency, they’re supposed to be for consumption and bartering if shit really hits the fan. I was responding to your point on using cryptos for wealth protection and now you’ve moved the goalposts to “currency”. Yeah. barteable goods aren’t good currencies, which is why we have currencies for trading rather than bartering as was was done before currencies were created.
As for the S&P 500 dying, how do you expect crypto would survive a scenario that causes that outcome, considering that the companies that hold and maintain the Internet infrastructure, from consumer ISPs all the way up to LVL1 providers are almost all publicly traded companies? If the S&P 500 dies that means companies are going bust left and right and in that kind of situation the networks needed for crypto would simply stop working (plus a lot of other infrastructure too, but the most complex and interconnected stuff would go first) and people would be down to hard cash and bartering.
The Internet might have originally been designed as ARPANET, a network supposed to survive nuclear war, but the modern Internet is a completely different beast and even ARPANET wasn’t capable of maintaining connectivity to consumer homes in the event of a catastrophe, it was only supposed to keep an small number of nodes connected.
Crypto is massively dependent on modern high-tech infrastructure and would collapse well before any currency that still has notes and coins.
As for the not quite so bad stuff, the worst crash of the S&P 500 ever had less price movement from top to bottom (which might take months or even years to fully play) than any normal month for Bitcoin.
Finally, indeed Diversification can include crypto, my point was that for wealth protection purposes you can simply diversify with traditional assets to create a robust wealth protection mechanism - just as I protected myself from the 2008 crash by merely spreading my assets across different banks in different countries - (unless, that is, you’re trying to protect yourself from something so bad the S&P 500 dies, in which case as I explained above and in my previous post, it’s down to stuff like hard cash, gold and bartering) and crypto won’t actually add any security to a diversified wealth protection portfolio, quite the contrary since it’s too infrastructure dependent to work in the worst situations and too volatile to maintain a steady value in normal times and mild to bad situations.
Compared to “traditional” Finance assets, crypto’s wealth protection ability is somewhere between Stocks and Derivatives and the latter are generally not sold to customers who aren’t considered sophisticated exactly because Derivatives can be very very risky (worse than Crypto, even, if we’re talking about stuff like Futures).
There is absolutely nothing “natural Ponzi-scheme” about cryptos inherently. They’re obviously used as pump and dumps all the time but this is not inherent to the technology.
Yeah. barteable goods aren’t good currencies, which is why we have currencies for trading rather than bartering as was was done before currencies were created.
Glad you’re somewhat familiar with the history of trade.
Hence if currencies die again, cryptocurrency is a viable alternative as a currency, which barter goods are not an adequate replacement for.
considering that the companies that hold and maintain the Internet infrastructure,
Idk, satellites don’t really require daily maintenance in a best case scenario, nor do undersea cables, I fully expect the internet to outlive humanity altogether.
unless, that is, you’re trying to protect yourself from something so bad the S&P 500 dies, in which case as I explained above and in my previous post, it’s down to stuff like hard cash, gold and bartering) and crypto won’t actually add any security to a diversified wealth protection portfolio, quite the contrary since it’s too infrastructure dependent to work in the worst situations and too volatile
I simply don’t agree with any of this whatsoever. Again, gold and bartering won’t make good currency, currency is currency - like cryptocurrency or fiat currency - diversifying so not all your currency is directly dependant on the government is pretty sound financial principle. You can invest into gold but in catastrophies your attempt to barter or otherwise liquidate these assets will be troublesome. It just makes sense to me, but I’m not econ or finance, I’m a compsci.
Nevertheless I appreciate your perspective, you’ve definitely given me some food for thought for hedging my bets in the future.
Cryptos are inherently volatile because they’re natural Ponzi-schemes with no oversight hence no crack-downs by the Law, and have low liquidity - they pull ill all manner of greedy types, suckers and swindlers and naturally end up with boom/hope-bust/fear cycles which have large movements due to the low liquidity of them as an asset. They’re also far easier to manipulate with very little investment, especially the smaller ones (exactly the ones that you claim aren’t as volatile).
The Tech per se doesn’t make so, it’s what it allows crossed with human nature that makes it so.
Tradeable essential goods are not supposed to be currency, they’re supposed to be for consumption and bartering if shit really hits the fan. I was responding to your point on using cryptos for wealth protection and now you’ve moved the goalposts to “currency”. Yeah. barteable goods aren’t good currencies, which is why we have currencies for trading rather than bartering as was was done before currencies were created.
As for the S&P 500 dying, how do you expect crypto would survive a scenario that causes that outcome, considering that the companies that hold and maintain the Internet infrastructure, from consumer ISPs all the way up to LVL1 providers are almost all publicly traded companies? If the S&P 500 dies that means companies are going bust left and right and in that kind of situation the networks needed for crypto would simply stop working (plus a lot of other infrastructure too, but the most complex and interconnected stuff would go first) and people would be down to hard cash and bartering.
The Internet might have originally been designed as ARPANET, a network supposed to survive nuclear war, but the modern Internet is a completely different beast and even ARPANET wasn’t capable of maintaining connectivity to consumer homes in the event of a catastrophe, it was only supposed to keep an small number of nodes connected.
Crypto is massively dependent on modern high-tech infrastructure and would collapse well before any currency that still has notes and coins.
As for the not quite so bad stuff, the worst crash of the S&P 500 ever had less price movement from top to bottom (which might take months or even years to fully play) than any normal month for Bitcoin.
Finally, indeed Diversification can include crypto, my point was that for wealth protection purposes you can simply diversify with traditional assets to create a robust wealth protection mechanism - just as I protected myself from the 2008 crash by merely spreading my assets across different banks in different countries - (unless, that is, you’re trying to protect yourself from something so bad the S&P 500 dies, in which case as I explained above and in my previous post, it’s down to stuff like hard cash, gold and bartering) and crypto won’t actually add any security to a diversified wealth protection portfolio, quite the contrary since it’s too infrastructure dependent to work in the worst situations and too volatile to maintain a steady value in normal times and mild to bad situations.
Compared to “traditional” Finance assets, crypto’s wealth protection ability is somewhere between Stocks and Derivatives and the latter are generally not sold to customers who aren’t considered sophisticated exactly because Derivatives can be very very risky (worse than Crypto, even, if we’re talking about stuff like Futures).
There is absolutely nothing “natural Ponzi-scheme” about cryptos inherently. They’re obviously used as pump and dumps all the time but this is not inherent to the technology.
Glad you’re somewhat familiar with the history of trade.
Hence if currencies die again, cryptocurrency is a viable alternative as a currency, which barter goods are not an adequate replacement for.
Idk, satellites don’t really require daily maintenance in a best case scenario, nor do undersea cables, I fully expect the internet to outlive humanity altogether.
I simply don’t agree with any of this whatsoever. Again, gold and bartering won’t make good currency, currency is currency - like cryptocurrency or fiat currency - diversifying so not all your currency is directly dependant on the government is pretty sound financial principle. You can invest into gold but in catastrophies your attempt to barter or otherwise liquidate these assets will be troublesome. It just makes sense to me, but I’m not econ or finance, I’m a compsci.
Nevertheless I appreciate your perspective, you’ve definitely given me some food for thought for hedging my bets in the future.