Is investing in Crypto just a get rich quick scheme?

[Leo Gura]

4 minutes ago, Yali said:

@Leo Gura

Making money in the stock market is not "easy"

?

Try making the same amount picking strawberries.

[tsuki]

43 minutes ago, Leo Gura said:

traders don't do any actual creative work

https://en.wikipedia.org/wiki/Mathematical_finance

43 minutes ago, Leo Gura said:

when you take $1000 and turn it into $1,000,000 via BitCoin

Where are you getting these ideas from? Ludicrous!

There is virtually no chance for anyone who is not "doing any actual creative work" to turn $1000 into $1,000,000 via trading. This statement is ludicrous precisely because there is no increase in the amount of money within trading exchanges. Your $1,000,000 is coming from other traders that put it in there. If it required no creative work, why would some win over the other? 

There are people who design modeling software that automatically trades stocks and models prices via big data analysis. These are the major players in the financial world that are at the top. How is that not creative work? The effect of running such software is that it becomes progressively more difficult to model price movements, but I'm not exactly sure how valuable is that.

I am not denying that this is a tank full of sharks, but if you think that you are a shark, then by all means, go ahead.

43 minutes ago, Leo Gura said:

you've just figured out how to turn a few teachers, farmers, and retail clerks into your wages slaves. That is literally what you are doing, but you've masked it as something else so you can sleep well at night.

You are mistaking traders with salespeople that pitch stocks to laymen and lie to them that this is free money with no risk.

Excuse me if this is too personal, but did your father perhaps lose a lot of money on stocks? I remember you saying that he was losing a lot of money on get-rich-quick schemes.

Edited January 13, 2021 by tsuki

[lmfao]

35 minutes ago, Leo Gura said:

It's parasitic because traders don't do any actual creative work, they leech off the labor of others in order to make easy money that would otherwise be impossible to make through creative labor

When I look at what determines the price of currencies or stocks I see a lot of abstraction, and I can't tell what's generating value. All these demand and supply graphs, number of people selling and buying, it's not so evident where the value is coming from. 

Although if I think about, I can imagine people earning money through other means than abstract stock trading. And those people will participate in the market. As transactions happen, through the price fluctuations, profits will be had by some , and losses incurred for others.

Where the physical path ( 1 dimensional line with people as points) money takes to reach someone's pocket would be complicated to write down. Or be a matter of perspective since you can frame it however you want (within the constraints of the system) . Since it is the market which contains thousands of elements/people as points which produce the collective appearance of price fluctuations? 

 

If GDP (or the appropriate metric) is always getting larger, then perhaps the profits will appear to exceed the "losses" (but the problem becomes then about how loss can be defined outside of those reductionist terms)?

Despite whatever illusion of things monetarily growing, you're not creating things and you're leeching. So whilst investing is an important part and principle of economics , it can become toxic? 

--

Kinda seems like all forms of owning (e.g. Investing) will result in money being "funneled to the top". *I imagine Marx or someone has fully explained this a million times better. 

*but obviously that doesn't mean you can't have private ownership in some system you build. And there are obviously healthy forms and unhealthy forms of business, creating value vs exploitation. 

Edited January 13, 2021 by lmfao

[Joel3102]

The speculation of Wall St and that whole world definitely can create problems and cause damage, so it needs to be properly regulated (GFC, for example).

The main value that day traders and these large algorithm softwares in the market play is that they provide liquidity in the market so it’s efficient and reflects asset values correctly. Ironically, without any dedicated algorithms to detect arbitrage in the market (which is essentially free money), there would be such inefficiencies and opportunity for arbitrage which could mean massive amounts of money made just because one person was in the right place at the right time, and insider trading would be much easier. 

[LfcCharlie4]

@Leo Gura What's your solution out of interest?

'See, when you take $1000 and turn it into $1,000,000 via BitCoin, you've just figured out how to turn a few teachers, farmers, and retail clerks into your wages slaves. That is literally what you are doing, but you've masked it as something else so you can sleep well at night.' 

Why is trading Thieving? Would Crypto actually not be the opposite, since it's helped a lot of 'normal' people create huge amounts of wealth? 

 @tsuki  Really liked your points, and I'm currently with you that Traders (at least the decent people) provide value for society, same as the (good) Fund managers who aren't just leeching through the fees. I get there's a LOT of corruption in these markets, but the traders I know / follow, mostly seem like Good people who just want to help make people money & make themselves money. 

Interested to hear @Leo Gura 's solution though. 

@Joel3102  Yeah, I basically thought the same as you, and don't see trading as thieving? 

@lmfao  I would actually argue differently, and say Excess Consumerism is how money funnels to the top, if more people became financially literate, they would actually have a chance at Financial Freedom. 

The other argument For investing is that if you invest in companies / projects you support, your money is helping these projects / Companies grow, so while you're not directly contributing value, in a sense you are. 

For example, most companies rely on VC, Investors & Public offerings to raise the capital they need, and in return for risking their capital, they expect some sort of return on that money. I agree there is a lot of corruption though, I just don't agree Investing is leeching, especially if you invest in things you support. 

[tsuki]

4 hours ago, lmfao said:

When I look at what determines the price of currencies or stocks I see a lot of abstraction, and I can't tell what's generating value. All these demand and supply graphs, number of people selling and buying, it's not so evident where the value is coming from. 

Basically, when someone puts a buy order, they are saying that this stock is worth to them $X. If someone sells them that stock, then they say that they value $X over it. There is no "generation" of value in the exchange of the stock. You get cash for an item. If the buyer is right that the item will be more desirable in the future, then he will make money. If he is wrong about the future desirability, then he just gave his money to the seller. The "desirability" is not totally decided by the buyers and sellers. They base their estimations upon publicly available information and interpret it. For example, if the stock is the share of a company, then they inspect how the company is run and what plans they have for the future and general outlook of the economy. Since the information is publicly available, the buyer is competing with the seller for better predictions. This is the "creative work" that @Leo Gura denies.

As for the "value" that trading provides for the society at large, they decide upon the current price of an item that is comparable to other prices expressed in the same currency. They give a crowdsourced context, a semi-objective, consensus-based, quantifiable description of the economy on the day-to-day basis. Thanks to traders, we can compare how companies fare on large timescales.

For example, by comparing the exchange rates of fiat money, you can draw conclusions on how economies of countries fare, or how economies compare to each other. Today's price of BTC i $34011,10 and ETH is $1065.06. It means that BTC is 30 times more desirable than ETH with respect to USD. If I were to invest, I'd say that this is severely skewed and that ETH is much more valuable than BTC simply because of the the technology and possibilities it provides.

Saying that all trading is evil and valueless is throwing the baby out with the bathwater.

Edited January 13, 2021 by tsuki

[Andrey]

Investing could be a tool to distribute wealth more evenly across the globe. I live in Eastern Europe, my parents have been working like horses their entire lives for almost nothing compared to the standarts on west, but now, thanks to fintech, there is a way to leverage their work and make it worthed. So don't rush with demonization, please.

Edited January 13, 2021 by Andrey

[Chives99]

Beats them living off welfare and being a burden , i think the government are secretly praying that covid kills all the old people off as social care makes up the biggest gov expenditure

[Yali]

@Leo Gura

The value of philosophy:
If you had invested in a college degree four years ago, you'd be $50,000 in debt.
If you'd invested the same money into Bitcoin, you'd have made $1.7 million.

Edited January 13, 2021 by Yali

[Chives99]

@Yali if everyone had bitcoin it would be worthless , anyway it's set to crash soon , so you'd better cash out 

Edited January 13, 2021 by Chives99

[Leo Gura]

17 hours ago, tsuki said:

There are people who design modeling software that automatically trades stocks and models prices via big data analysis. These are the major players in the financial world that are at the top. How is that not creative work?

There are also people who go to elaborate length to plan a bank heist.

How is that not creative work?

People get very creative when it comes to stealing money.

[Leo Gura]

6 hours ago, Yali said:

If you'd invested the same money into Bitcoin, you'd have made $1.7 million.

All depends on when you invested. If you invested at the wrong times, you'd be broke.

I can go place $100,000 on a roulette table any day of the week. And I might win. Does that make it smart? Does that even deserve to be called "investing"?

[Roy]

6 hours ago, Chives99 said:

Beats them living off welfare and being a burden , i think the government are secretly praying that covid kills all the old people off as social care makes up the biggest gov expenditure

lol the current governments are they way they are BECAUSE of old people. It's RUN by old people, VOTED into their jobs by old people.

[integral]

@Leo Gura Roulette is random chance with a house edge, Bitcoin is predicting dumb herd psychology. The latter is easy money.

Why not pull money from these markets and redirect it to something useful? Not all day trading needs to be a shallow venture. 

Like non profit hedge funds? 

Yellow should take full advantage of what ever money sources are available, with the mindset that the money is being entrusted to be used to do greater good.

Wealth should be distributed to does that provide the highest value to society. We should redistribute the wealth from these stupid markets. There is no point not tapping into it. 

We are living in the orange jungle. 

Edited January 14, 2021 by integral

[shorti62]

There are definitely some very very interesting ideas in crypto and blockchain.. If you see potential in them, then invest.

Surely you can earn some side money with trading, mining or staking, why not. You can also lose it.

If you want to get rich, remember that you are competing with millions of people, and they have probably better chances to take your money, before you take it from them. 

 

So, if you have some bucks laying around, and you want to invest them into something, but cant afford real estate, then blockchain might be good opportunity. Its kinda like internet in 90's, we don't know where all this is going.. Might be biggest technological inovation, or it can be biggest scam. 

 

I am quite optimistic, and I do own some Ethereum and Chainlink.

 

 

[Joel3102]

15 hours ago, LfcCharlie4 said:

 

@Joel3102  Yeah, I basically thought the same as you, and don't see trading as thieving? 

 

 

Nah I don’t really see it as thieving, depending on what you’re specifically trading.  One person wants to sell stock in a given moment and one person wants to buy.

Although I wouldn’t recommend day trading however. There’s better things to do. Also most traders probably make less return than just investing in the S&P500. I personally only passively invest in ETFs. It’s the safest option and generally outperforms most people who try to “pick” stocks 

[lmfao]

1 hour ago, integral said:

@Leo Gura Roulette is random chance with a house edge, Bitcoin is predicting dumb herd psychology. The latter is easy money.

I agree that bitcoin isn't a gamble. But I don't think it's just herd psychology, I'd say bitcoin is a useful technology with substance. But that isn't incompatible with calling the buying and selling of it to be a lazy way to make money. *

There is a limit on the number of bitcoin that will ever be in circulation. Owning some bitcoin is almost like owning a share in this technology. But in practice it certainly does not feel that way since you're just trying to squeeze out money in this competition with 1000's of other people. 

 

*And like you were getting at, that doesn't make bitcoin investing an inherently bad thing. But it obviously is often used to support a parasitic lifestyle of the systems in place. 

 

If I really wanted to, I could spend my day making money through exploiting capitalism without creating anything. Getting into this finance shit with a brain for numbers. But living an unsatisfactory meaningless life like that would make that all for nothing. 

---

At the end of the day, someone is going to make money from this shit, so I see no moral reason to not make money from it. But I wouldn't want it to define my life, make it more like a side hustle. 

Edited January 14, 2021 by lmfao

[Lyubov]

It's not really an investment than it is a gamble. The days of "investing" in bitcoin or just buying some as a novelty to see where it goes are long gone (2012?). It's just a pump and dump scheme now. 

Edited January 14, 2021 by Lyubov

[Leo Gura]

You're not going to predict the value of BitCoin because you have no clue what it's true value is.

At least with a company like Google you know it will be around creating new products and services.

[Leo Gura]

31 minutes ago, datamonster said:

Try retiring in your lifetime without investing  gambling

Hold my beer soy milk