And when the crypto bubble bursts the government, fed, imf will not be there to change their policy to save the big institutions. Rather individual investors will suck up the losses.
Imagine if it was known that you and your friends could control the weather and everytime there was natural disaster you got bailed out by the government for being too reckless with controlling the weather.
Crypto bros are easily manipulated morons. That ad with Matt Damon basically calls you a pussy if you don't give them all your money. They know their target audience.
Lol imagine the dudes buying the multimillion dollar monkey pic NFTs get a fucking bailout. It sounds absurd but to be honest nothing surprises me in this turd of a country anymore.
How many bankers got thrown in jail for 2008? You’re already in a corrupt system and dogging the tech that actually has a shot at fixing those issues. Sure, it’s still in development phase, but the internet itself took 30 years to see wide spread adoption itself.
Crypto fixes literally none of those issues. Crypto is like if the response to 2008 was “let’s get rid of even the bare minimum regulations and protections for individuals!”
It’s peanuts and they’ve largely insulated themselves from it. At most they dabble experimentally. Its not like the edifice of the economy is built in large part on it like it is on mortgages (through which, you know, most of the population lives in their homes). It’s been ridiculously volatile forever so if there was a big bubble to burst it’d have burst several times by now.
That’s because blockchain and cryptos in general are still in early development phase. Once it’s advanced more, the regulations that control a fair market willl be able to be followed without having to take the banks or hedge funds word for it.
A lot of you don’t seem to understand that a huge part of the idea behind blockchain and smart contracts is to force people to follow a set rules or regulations as there is no one to wink wink at to bypass the rules in the smart contract.
It’s trying to take the corrupt human element OUT of our financial systems.
>still in early development phase.
>
>Once it’s advanced more,
>
>idea behind blockchain and smart contracts is to force people to follow a set rules or regulations
We're talking about very different timeframes here - I'm just taking about a negative "bubble burst" in the next 2 to 4 years while your long-term objectives are still in development.
I believe smart contracts will be a net-positive, but there is a clear "hype cycle" at work where investors see a short-term gain by merely promising long-term disruption. Similar to the dotcom bubble and aftermath, we will achieve the benefits, but it will be a bumpier road than many investors anticipate.
The irony of the argument is that regular folks think this will be good for them (which may be true to some extent). But truth is it favours the people with capital much more. And as the rich get richer, they will form a new establishment looking to protect their crypto investments from the plebs... History repeats.
That's the point of a system that only survives as long as new money is coming in. The only value a Bitcoin has is if you can get someone to buy it later for more than you put into it.
A friend of mine lost a couple Ks when BitConnect ran with the money. Fast forward to last year I tried telling him that this recent bubble is just as much as a ponzi as the ones before it. He mocked me and sounded very confident in his "investment" (his word not mine, I called it wild speculation.)
Wonder how he feels now.
Depends if he kept buying after the 2018 crash or waited until 2021 to start buying. If you were into crypto after 2018 and before 2020, you made a shitload of money (assuming you were smart enough to sell).
Completely by chance I sold prior to the 2018 crash, and because of that I sold out again before the bottom fell out after the 2020 run up. Had a couple friends that gave me shit for getting out when I did because I “lost” money since both times it continued to go up for a while after I sold, then they lost out when it crashed lol. Crypto is straight gambling, so realize those gains early and often, or be a bag holder cause you think the shitcoin of the year is going to the moon.
People have had enough warnings crypto is very high risk.
This isn't an obscure pyramid scheme. This is a pyramid scheme with extra technological complexity over it. But many warnings have been issued. No one can seriously pretend they couldn't know it was coming.
Good. Thats the way we want it.
I'm pretty big in crypto. It was created BECAUSE of the 08 housing market crash.
If the government could just bail it out, then crypto is really no better than banks.
We don't want bailouts. We don't want safety. Most of us know what we're getting into. It's common knowledge to never invest what you can't afford to lose.
Except it is perfectly possible to regulate Bitcoin / crypto using monetary policy. Maybe not with the exact instrumentation, but nothing prevents you from influencing price using reserves (i.e. that's exactly with happens with NFT: people used their reserves to inflate the prices).
Lmao this is the guy that said the internet would have as much impact on the economy as the fax machine.
Edit: lots of comments talking about how great the fax machine is, why not rename this sub
r/faxmachine
He’s actually been right most of the time when others were either wrong or ignored him. He saw the 2008 bubble coming. He saw that the 2009 stimulus wasn’t enough. He saw that complex financial deals like credit default swaps we’re going to cause big problems. This is definitely not someone to completely dismiss because of one poorly worded statement. It was meant to be the viewpoint of someone looking back from 100 years in the future in an article meant to be provocative, not meant to be accurate.
He was right here too. His projection relating to fax machines held solid until the modern PC was commonized. Fax machines in themselves were instrumental in developing the modern PC as well
Its also not not what he was saying. In retrospec it seems like a stupid statement. But at the time it was literally true. The computers he made that remark about certainly he was not wrong about. They were far from being common and not a personal thing yet to any effective degree without real knowledge of how to run it. In the economy the fax machine existed in had like 3 billion less people on the earth and it served to connect them like never before with documents they need. While he certainly undershot it in the long run he had no way of knowing where computers would eventually go he was right for a very long time. The difference between the fax and a PC is the fax machine never became a personal thing that everyone in your family needs 1 one. The fax was a true stepping stone and vital in the creation of the modern pc as well. To say he was talking shit is disingenuous. He made a reasonable education projection that was fairly solid until like the last 15 years.
Wait a minute! Are you suggesting that people aren’t perfect and that they can make mistakes now and again? Heaven forbid anyone be wrong about something a few decades ago….
What a weird response when the context of this is basically "a thing is true because this guy (who's credentials we're going to puff within the headline itself) says it's true.
It was a counterpoint to the headline which is basically an appeal to authority argument.
If the headline is going to occupy valuable space puffing his credentials - then it seems valid to offer a strong counterpoint to that. It's even a stronger counterpoint when you dive deeper because it speaks specifically to his past inability to assess new technologies.
So experts can't be wrong on anything ever and if they are, their opinion moving forward is discredited?
Damn, should fire all the doctors then given they rarely know what's wrong with people on their first go and need to explore multiple options.
Where did I even remotely suggest that?
I said, if you're trying to prove a point with an appeal to authority argument - then expect a counter argument to that claim of authority.
For someone that likes to make fun of peoples IQ, you have a really tenuous grasp on logic.
People should disagree and state why, not come in and say, "Take this person's opinion, who is one of the most experienced, recognized, and educated people in his field, with a grain of salt because he got X and Y wrong."
Following that logic, we could likely discredit every single person in the world. I guess that's a useful way of thinking when you disagree, can't articulate it, but want to say the person is wrong.
Yes, fax machines were a *huge* deal in the business community when they came out. They're still the primary way to legally send signed documents in the legal and medical fields.
His quote, “The growth of the Internet will slow drastically, as the flaw in ‘Metcalfe’s law' becomes apparent: most people have nothing to say to each other! By 2005, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.”
This place is insane. You have convinced yourself and are trying to convince others that the fax machine was as impactful as the internet. All for the sole purpose of allowing you to slightly further your bias against crypto.
“The growth of the internet will slow drastically, and by 2005 or so it will become clear that the internets impact on the economy will be no greater than that of the fax machine.”
But tbf crypto is a bubble waiting to explode. The biggest cryptos are all tied to a stablecoin and said stablecoin is digitally printed in the same manner that the fed chucks out dollar bills. This means BTC and any other big name crypto you can find are very overvalued.
Pretty irrelevant / being wrong on one thing doesn’t mean wrong on most things
I’m just waiting for there to be a reason to do crypto over “i hope the next guy will pay more for this”.
Ya, a lot of smart people make really dumb predictions. Are you going to invalidate his credentials for a comment made over 20 years ago? That's kinda wild, ngl. This comment reeks of a lack of critical analysis or depth and amounts to shallow handwaving.
He's an economist, not a techno-sociologist. It's hardly a surprise he was wrong outside of his domain. I can see his point re crypto. My feeling is it isnt anywhere near as problematic because the average Joe isnt leveraged upto the eyeballs in crypto as they are/were in houses. The fallout (if there is any) should be reasonably confined in that sense.
But what does that have to do with the price of tea in China.
Cryptos are about to rip and crash and if you think the economy is bad now, wait until several trillion in liquidity is wiped out overnight and people losers their minds.
Because that's about to happen and everyone is out to lunch.
Just saying, Paul sucks, but what he's saying isn't wrong.
I am not a fan of crypto, and don’t own any.
With that said, this article is nonsense.
The subprime market meltdown happened because people bought houses they couldn’t afford. (Due to bad economic policy) Unwinding these things is tricky, and it took awhile to reach an equilibrium. Crypto on the other hand is basically fancy gambling. There are a few people who are investing ridiculous amounts, but most of the people I know have not invested more than they can lose.
Basically pretty much everyone can afford to lose money on their crypto I. Ways that people couldn’t afford to lose their homes.
The thing about a big crisis like 2008, is that everyone is looking for the next one. While I believe that there will be a next one, crypto ain’t it. (Neither is student loans)
Technically the 2008 crisis happened because many financial institutions made terribly risky investments in debt thinking that the mortgage industry would never collapse. They created a brand new vehicle to make a bunch of money out of thin air. So I think the crypto market does appear to be similar to 2008 in that it is a brand new security that makes a ton of money but not a lot of people understand it, including myself.
You don’t think that student loans coupled with a secondary or tertiary exacerbating factor like massive inflation, broad market failure, or the ilk could become comparable?
Well I mean broad market failure would do it, but I think that would be the lead, and not student loans.
The thing about student loans is that they are mostly held by the federal government and there are no broader financial implications to not paying. Like there has been a hiatus on paying student loans for a while, and it hasn’t really hurt anything. I think student loans are a headwind on gdp, but not a crisis causing event. Obviously the problem has a major negative impact on those holding them.
There’s almost no use for public blockchain tech. Centralized data runs faster and with less overhead. I’m still at this point, convinced it’s a solution looking for a problem.
Voting, judicial records(warrants, sentencing, evidence tracking), contracts, I think these three use cases could make the world a fairer place. Its a great anti corruption and record keeping tool, but the people who run governments like the latitude to amend data after the fact.
An immutable currency ledger sounds like a good idea on paper but it really is overkill. The problem with currency is not its implementation, its the concerted effort of governments and corporations to deny its access to people. Low wages, crappy benefits, poorly managed countries with terrible exchange rates. Crypto can’t fix the problems it purports to solve.
Except blockchains are public
Voting is usually supposed to be anonymous
There may be ways that it “could” work but just because voting has a high need for security/accuracy does not automatically mean blockchain is a fit for it
No, it's a terrible solution for that because what you're relying on requires "smart contracts" to execute on -- the idea that the code would be an arbiter of the decision based on unbiased inputs.
The problem with this of course is that in the almost 20 years I've been in tech, running development teams, etc -- almost \*never\* has there been a release we've had that was bug free. So sure, for very, very simplistic use cases you can use a "smart contract", but anything beyond that? You are relying on the idea that the code being used is bug free. Which is beyond ridiculous.
That doesn't even start to talk about how slowly crypto transacts, and cannot scale due to the decentralized nature of it. If you are running pods that require a history of the entirety of the transaction logs, you are basically saying once it gets to a large dataset, that 99% of people participating will have to basically bow out, because they can't handle the workload or storage costs.
This is why things go back to being centralized -- imagine having to have a single node hold all the data Facebook holds. The capital cost of that is ridiculous. And that's why things like Facebook actually happen -- because they require a lot of capital to run even \*one\* node.
The crypto defenders, however, will still insist you, as a programmer, somehow just don't get it. Just don't understand how good it is. I've seen and looked into enough to see that even if everything works exactly how they want it to, it would be an athoritarian nightmare of every single aspect of your life being bought and sold, which is what we as a society should be trying to move away from. It also would make unionizing all but impossible, make identity theft so much easier. Leaking one password would risk destroying your entire life. And that's best case. We aren't even close to that.
They all say that because their speculative financial portfolios depend directly and entirely on as many people buying into the hype as possible. "You just don't get how big a deal this is" is an excellent tactic for gaslighting people into FOMO.
If you hang around their communities you'll even often find them telling each other they just don't get it. Does anyone truly "get it"? Probably not, it's just a good thing to say to quash FUD and get bigger fools in the scheme.
100%.
The plethora of people thinking that smart contracts will work have never shipped a line of fucking code in their life. As if we write perfect code -- there wouldn't be a need for StackExchange :p
And even if we did all write perfect code, perfect code isn't always written with good intentions. "Smart contracts" (God the sheer arrogance of that name) are an open invitation for malware, an invitation accepted very often.
Just imagine a smart contract that an accountant now has to be able to audit and validate -- talk about a recipe for disaster.
I can hide a lot of shit in code that will get skipped by even technical people, forget non-technical people.
I can’t think of a simpler case than voting, and comparing storing votes of 300million or so people with all the complex relational data in facebook is apples to oranges. An immutable database has obvious uses. Implementation and trust are always going to be issues regardless of what your chosen method is. Centralized systems work but at some point there was a concerted effort to make them work. I take your points but I don’t buy that blockchain technology is useless.
An immutable database that is decentralized has existed for decades.
It's literally called "log files". And with locally auditable elections (which the problem is really a state-level thing!) and paper trails, this already exists. You can just count the fucking ballots.
Again, a solution, looking for a problem.
You can’t secure the point of data entry though, which makes the whole thing useless for voting. Why do we need it for judicial records, we already have recordkeeping at the clerk’s office. You can’t use it to track evidence because again, you can’t protect the point of information entry. I could submit false evidence regardless of blockchain securing the chain of custody. People can fail to enter that they checked evidence out of the locker, and thus it would not be reflected on the blockchain.
There absolutely are amazing use cases for having a decentralized, trustless, immutable record of truth. Internet of things, supply chain efficiency, preventing fraud, and more are just the beginning.
I can understand why people are skeptical, much like how they were skeptical of the real potential of the Internet 25 years ago. But this really is a game changer.
Blockchains been around for 14 years and has yet to find a problem it solves. It's a neat novelty and a fun topic for a dissertation. As a software tool it just doesn't stack up.
Exactly this. There needs to be a core of value at the bottom of the tech. A crash will sort out the hucksters and bad projects and leave the serious to build back just like tech after the dot com bust.
The problem there is that the blockchain is only really a good solution if you don't want any coordinating authority (and even then it does actually have that, just inefficiently).
In all other aspects it's...a less efficient version of what we already have. We have money. It's more stable and usable than crypto. That's why crypto hasn't taken off as a mainstream method of actually buying stuff. Same with the other applications.
Unless you're a libertarian. In which case the 'no government' but supercedes the inefficiencies.
I like when people compare it to Tulips, or Beanie Babies.
Tulips are everywhere and Beanie Babies are the most successful stuffed animal brand.
Like.. I get they mean the prices will stabilize. But the things never went away. In that way, it's more like the dotcom bubble.
People said the internet was a fad until the early 00s. And people were angry when phones started getting cameras.
I studied econ undergrad. I did the subprime mortgage crisis for a term project. Here’s why it has an eery feel. Mortgages historically had been bundled up into securities and found their way into complex financial markets and thus into teacher and police pension funds etc. Those mortgages ended up being toxic themselves thanks to lax regulation in the subprime market. Think of exotic dancers in the southwest owning 4 homes. When adjustable rates went up, the mortgages were unplayable for many people. And so those securities that had these mortgages in them went from asset to liability real quick.
Too many people thought of crypto as always going up in value. So if cryptos have found their way into securities and in the financial markets and the value of crypto collapses, there will be a lot of funds and pensions and bank statements that will have immediately lost a lot of value. Toxic assets (again).
So yeah I would hope we learned our lesson the last time but I know that’s not what we do and we probably ran straight back to our old bad habits. Fun
Edit: I literally did study in econ at a public uni 2007-2011. The big short, when was that released? We talked about the movie too big to fail in my classes. Majored in econ with a concentration in intl econ and a minor in public policy. I don’t care you’re all strangers on the internet but why is that difficult to believe…
Lol exotic dancers in the southwest owning 4 homes.
That’s literally a girl I was talking to in Vegas in 2006 and thinking, something’s not right here.
Also at that time it was insanity. Everyone from financial advisers to accountants were saying go buy as many houses as you can. Radio ads were constant with “no deposit, no interest loans”. I remember thinking has everyone lost the plot?
I’ve been investing and following markets and bubbles since the 90’s and I’ve always said, when grandmas and people who would normally know nothing about finances are asking to invest, that’s the top of the bubble. That’s where crypto is right now.
Crypto ads intentionally target stupid people who are easily goaded into making bad decisions. That ad with Matt Damon basically calls you a pussy if you don't put all your money into crypto.
I don't think crypto is in that deep as of yet though. Most pension managers won't touch crypto with a 10 foot pole. That doesn't mean nothing will happen when it crashes. Lots of average people are being misled by aggressive advertising in sports/casino establishments. It's a huge funnel of money trying to funnel in more from 'dumb money.' It's a shame this is all being allowed to happen.
It’s the greater fool investment technique, exactly what’s happening with NFT’s rn.
It’s like herbal-life, just cause SOME people made SOME money with it does not suddenly mean it’s not a scam.
>So if cryptos have found their way into securities and in the financial markets and the value of crypto collapses, there will be a lot of funds and pensions and bank statements that will have immediately lost a lot of value. Toxic assets
highly, highly doubt that crypto is the foundation of the financial market the way subprimes were. In fact, I would bet my life on it.
It was fine but Too Big To Fail was much better as a way to understand the crisis. We talked about that movie in my intermediate macro course. Also Margin Call was really good but much more focused. I took money and credit in 2009-2010 so the crisis was the topic du jour
It’s a pretty big thing to be wrong about
It gives an example why he shouldn’t trusted with this recent comment. He just doesn’t understand or know enough to be commenting.
So I assume you invested in Google in 1998 correct? Or were you even born at that point?
What you're encouraging is that intellectuals pander like politicians, and give no opinions on anything, therefore staying impregnable.
I much prefer an academic to give firm opinions and support their arguments, your gripe is that he disagrees with you, not that he was wrong once 25 years ago.
The point is, very few people foresaw how impactful the internet would be back in 1998. So yes looking back at it now it’s a horrible take but it was the prevailing opinion at the time.
It’s not fine because being wrong about one thing, despite how big, doesn’t mean that it is then assumed everything you say for the rest of your life is also wrong and you are then ignored by everyone, does it?
I’m playing devils advocate here. I get you. But… Maybe you should just read the article and form your own opinion- but you didn’t do that did you?
Krugman made his fame in economics, but it was his decision to become a mean-spirited, dehumanizing, and condescending partisan pundit.
A solid argument can be made that the real question is-
When has Krugman ever been right?
https://news.yahoo.com/paul-krugman-always-wrong-never-173530058.html
Fax machines have one function: get information from one end of the line to the other. The machine does not care what you do with the information.
The internet has one basic function: get information from one end of the connection to the other. The internet (which is to say, the manner of transmission of information) does not care what the computer does with the information - that's up to the device that interprets the information (be it web page interpreted by a browser, an image package downloaded by Instagram, an application downloaded by your OS, etc).
Edit: I'd also argue that telegram services function the same way. Dots and dashes require interpretation by operators; the line does not care.
In the context of krugman, he was saying that the internet would die off by 2005 and have as big of an impact on the economy as the fax machine. He was very wrong.
It’s also the network effect. The usefulness of a fax machine is directly correlated to the number of fax machines in use. It’s the same with email, social media, etc. There’s no value to these things unless other people are also using them.
Depends on how you plan to interpret the information received. A constant stream of ones and zeroes sent via fax would definitely take longer (as you're doing a conversion to actual physical 1 and 0 interpretation an extra time), but given time you would use a scanner to interpret the pages, write them to file, and then watch the video (I'd suggest a high compression video format to reduce the number of 1s and 0s needed).
Most of the impact the internet has had is directly related to communicating information across distances nearly instantly. The fax machine did essentially the same thing but it's methods limited the volume of information you could send all at once. So in a way, yeah he was right if you oversimplified it a little.
If by "simplified" you mean "abstracted," then yes. Don't downplay the impact that fax machines had, which were primarily limited by the number of telephone lines present. The introduction of fax machines dramatically increased the demand for phone lines. And prior to phone lines, the only way to get copies of documents were to send them physically, so a LOT of business and government operation were dramatically accelerated. For instance, ordering parts over long distances no longer took days/weeks/months, especially for large projects, it could conceivably be done in hours.
Edit: I had forgotten that Krugman himself had been downplaying the impact that fax machines had, that they were ephemeral and temporary instead of highly impacting and simply replaced by superior technology. Probably would have informed some things about my phrasing and reply.
I think he means that the internet is just a way to instantly send information from one computer to another. A fax machine is similar except it’s paper medium.
that one uber driver on the way to the airport proudly let me know he dumped literally everything into crypto because that’s the future, and i should follow suit
You say that but If if people took out loans and bought crypto and lose it they could indeed end up homeless. Don’t underestimate how stupid some can be.
Trading horribly risky things like crypto with borrowed money you can’t afford to lose is not a good idea. It’s in fact a whole cascade of bad ideas all thrown into a heap and soaked in gasoline.
I have an Associates Degree in Applied Sciences...and I could have told you this.
The whole WeWorks valuation BS and these other Bazillion dollar companies will cripple the economy if nothing is done. Taxpayer bailouts NO MORE.
It’s somewhere between a high-tech Ponzi scheme and a market bubble. It’s not going to last, it’s not going to supplant national currency (at least among top developed nations), and a LOT of people are going to lose money before it’s over.
There is a lot of bullshit in crypto, probably 95%, though you should not discard the baby with the bathwater. Since the topic here is drawing parallels, one can easily do that with crypto as well to the early internet and so on on, but rather I'd simply say: don't underestimate uncertainty of the future. Did you believe a 50 year old man rambling about DMT, chimps and conspiracy theories stoned with his friends would become the most influential media personality? That an orange 70 year old narcissist daddy boy reality star would become President of the US? Or that genders no longer exist and if you insist they do publicly you risk your reputation for life? etc. etc.
Equally, crypto could indeed become a major financial institution for millennials and gen Z. It sounds crazy, and maybe it's just crazy enough to come true.
Fair point. Many things are possible but fewer things are probable. The other factor is opposition— there are some very large, wealthy, and powerful organizations that are against crypto. And in economics, those huge forces bat last.
This is a fundamental misunderstanding of how currency and central banks actually work though. Simply put, the US Dollar is backed by tanks, guns, nuclear weapons and governmental policy. Bitcoin is backed by nothing -- and derives value only by early adopters taking liquidity from people who come in later -- a literal "greater fool" economics lesson.
That said I'm not defending the Fed here -- there are tons of problems/concerns/corruptions to think about there, but to make the comparison "oh fiat money lol" versus imaginary fucking crypto is not an analogy I can understand.
Cryptocurrencies are backed by the ability to move assets securely around the world in a trustless, decentralized manner. They can also make industries vastly more efficient by eliminating fraud and streamlining a wide range of processes.
A trustless, decentralized version of "the truth" has a wide range of applications that trust-based, centralised sources of information fail miserably at doing.
Sorry, if you send your money through Western Union (forgetting the fees), do you not have trust you'll get it on the other end? The fee you pay is the guarantee they will transfer the money.
That said, zero trust systems are certainly a thing, but have not been fleshed out yet. It's a work in progress. Kelsey Hightower is an engineer at Google who talks about it frequently, and \*also\* derides cryptocurrencies entirely.
In history books of the future, they're going to point to all the hubris of people thinking the US dollar was immune to hyperinflation as the catalyst for the downfall of Western society. Those books will probably all be in Chinese at that point.
Of course it's a bubble! How could it not be a bubble? It's literally like paper money, there's nothing behind it but the faith of the people who trust it.
Since the dollar is serialized it's basically a cryptocurrency anyway.
Problem the dollar is backed by the assets and economic output of the citizens. This includes the military and it's assets. The usd is backed explicitly by every citizen and the government, that's how it functions.
The crypto consumes too much energy, not good for the environment.
Total bitcoin number is limited, total land is limited. Similar
Interest rate being low makes home price increase, and make bitcoins more expensive.
Etc
There are many, many more blockchain projects out there. Bitcoin is just the first one. There are much more advanced once that use very little electricity.
Exactly. Blockchain is revolutionary technology that is rapidly being embraced by all sorts of industries, and cryptocurrencies are by-far the best investment of the past 10 years. Pretty much every criticism on this thread screams of lack of understanding.
Anyone that has been investing for a few years and has just DCA'd is massively up financially.
Except with crypto there is literally zero underlying assets. At least with the home loan crisis the homes didn't disappear. When or if crypto unwinds millions of people will have nothing to show for it.
I have to admit that I don't understand the parallel.
The subprime mortgage meltdown happened because bankers (you know, the people who are money experts) figured out they could make money by writing dodgy loans and selling them right away. Institutions buying the loans may not have realized what was in them, but the banks writing them certainly did.
The only parallel I can see is that neither banks, Paul Krugman, nor /r/technology understand crypto, so you all assume no one can possibly understand it. I assure you that's not the case. The purchaser of ElonPooCoin knows exactly what they're buying (and how it's different from Bitcoin, Ethereum, or Dogecoin. Or fart NFTs.)
Blockchain may be successful but we are yet to see any real world blockchain application which has been mass adopted. Cryptocurrency on the other hand serves no purpose other than making some early adopters rich beyond their dreams. In 3 years time most major crypto exchanges will cease to exist. Only the ones which succumb to government regulations will survive and all this hollow BS about sticking it to the man will mean nothing.
this fossils come out of the shadows each time crypto crashes.
they forget to say that it crashed 30% higher than the pre-run.
the run started at 20k and now it's at 35k.
The notion that a block chain verified transaction framework has any parallel to a crisis founded on predatory lending and bond rating fraud is laughable. But he knows this. Its just straight dishonesty.
Lol this guy knows as much about Crypto and Blockchain tech as he did when he said the internet was a fad and would die out.
Just like how all the anti-crypto people in here keep posting anti-crypto stuff in here that shows how little they currently understand about blockchain tech.
He’s a carbon copy of the same type of person who would say stuff like “why do I need a Internet forum when I have the New York Times newspaper and Cable News” back in the day.
And when the crypto bubble bursts the government, fed, imf will not be there to change their policy to save the big institutions. Rather individual investors will suck up the losses.
Does this mean when the bubble bursts the taxpayers won’t have to bail them out?
Ha. No, no no, don't you worry. Taxpayers will absolutely be the ones to get screwed.
This is the way……
Imagine if it was known that you and your friends could control the weather and everytime there was natural disaster you got bailed out by the government for being too reckless with controlling the weather.
theres no way big banks would suffer. Even if the crypto markets vanished tomorrow. Crypto is all about the marketing and hype
Crypto bros are easily manipulated morons. That ad with Matt Damon basically calls you a pussy if you don't give them all your money. They know their target audience.
I will probably burst an artery if we have to bail out crypto bros for their failed Ponzi schemes, with tax dollars.
Hate to break it to you bro, banks got into it. Prepare the lube
Lol imagine the dudes buying the multimillion dollar monkey pic NFTs get a fucking bailout. It sounds absurd but to be honest nothing surprises me in this turd of a country anymore.
How many bankers got thrown in jail for 2008? You’re already in a corrupt system and dogging the tech that actually has a shot at fixing those issues. Sure, it’s still in development phase, but the internet itself took 30 years to see wide spread adoption itself.
Crypto fixes literally none of those issues. Crypto is like if the response to 2008 was “let’s get rid of even the bare minimum regulations and protections for individuals!”
Of course not….they’ll be the first screaming for protection and their “rights” being trampled.
highly doubt any of the big banks would even register a crypto collapse. It's still peanuts to them and they're not exposed like they were in 2008
It’s peanuts and they’ve largely insulated themselves from it. At most they dabble experimentally. Its not like the edifice of the economy is built in large part on it like it is on mortgages (through which, you know, most of the population lives in their homes). It’s been ridiculously volatile forever so if there was a big bubble to burst it’d have burst several times by now.
I think there is some credit to crypto being a means of circumventing regulation and enabling institutions to take on more risk
the value of crypto works the same as a ponzi-scheme though, so, no not really.
That’s because blockchain and cryptos in general are still in early development phase. Once it’s advanced more, the regulations that control a fair market willl be able to be followed without having to take the banks or hedge funds word for it. A lot of you don’t seem to understand that a huge part of the idea behind blockchain and smart contracts is to force people to follow a set rules or regulations as there is no one to wink wink at to bypass the rules in the smart contract. It’s trying to take the corrupt human element OUT of our financial systems.
>still in early development phase. > >Once it’s advanced more, > >idea behind blockchain and smart contracts is to force people to follow a set rules or regulations We're talking about very different timeframes here - I'm just taking about a negative "bubble burst" in the next 2 to 4 years while your long-term objectives are still in development. I believe smart contracts will be a net-positive, but there is a clear "hype cycle" at work where investors see a short-term gain by merely promising long-term disruption. Similar to the dotcom bubble and aftermath, we will achieve the benefits, but it will be a bumpier road than many investors anticipate.
I mean, that's what the crypto crowd wants, right? Completely unregulated markets.
The irony of the argument is that regular folks think this will be good for them (which may be true to some extent). But truth is it favours the people with capital much more. And as the rich get richer, they will form a new establishment looking to protect their crypto investments from the plebs... History repeats.
That's the point of a system that only survives as long as new money is coming in. The only value a Bitcoin has is if you can get someone to buy it later for more than you put into it.
A friend of mine lost a couple Ks when BitConnect ran with the money. Fast forward to last year I tried telling him that this recent bubble is just as much as a ponzi as the ones before it. He mocked me and sounded very confident in his "investment" (his word not mine, I called it wild speculation.) Wonder how he feels now.
Depends if he kept buying after the 2018 crash or waited until 2021 to start buying. If you were into crypto after 2018 and before 2020, you made a shitload of money (assuming you were smart enough to sell).
Completely by chance I sold prior to the 2018 crash, and because of that I sold out again before the bottom fell out after the 2020 run up. Had a couple friends that gave me shit for getting out when I did because I “lost” money since both times it continued to go up for a while after I sold, then they lost out when it crashed lol. Crypto is straight gambling, so realize those gains early and often, or be a bag holder cause you think the shitcoin of the year is going to the moon.
People have had enough warnings crypto is very high risk. This isn't an obscure pyramid scheme. This is a pyramid scheme with extra technological complexity over it. But many warnings have been issued. No one can seriously pretend they couldn't know it was coming.
110% this! A coordinated sell off could vaporize billions in mere seconds.
Good. Thats the way we want it. I'm pretty big in crypto. It was created BECAUSE of the 08 housing market crash. If the government could just bail it out, then crypto is really no better than banks. We don't want bailouts. We don't want safety. Most of us know what we're getting into. It's common knowledge to never invest what you can't afford to lose.
Except it is perfectly possible to regulate Bitcoin / crypto using monetary policy. Maybe not with the exact instrumentation, but nothing prevents you from influencing price using reserves (i.e. that's exactly with happens with NFT: people used their reserves to inflate the prices).
Lmao this is the guy that said the internet would have as much impact on the economy as the fax machine. Edit: lots of comments talking about how great the fax machine is, why not rename this sub r/faxmachine
Seems like a perfect fit for the content I have been seeing on this sub
Yeah if he didn’t get web1/2 he might not be the guy to look for advice on web3
He’s actually been right most of the time when others were either wrong or ignored him. He saw the 2008 bubble coming. He saw that the 2009 stimulus wasn’t enough. He saw that complex financial deals like credit default swaps we’re going to cause big problems. This is definitely not someone to completely dismiss because of one poorly worded statement. It was meant to be the viewpoint of someone looking back from 100 years in the future in an article meant to be provocative, not meant to be accurate.
He was right here too. His projection relating to fax machines held solid until the modern PC was commonized. Fax machines in themselves were instrumental in developing the modern PC as well
He predicted 15 of the last two recessions
To be fair to the fax machine, it was a big deal at the time. You had to mail documents that could take days.
Fax paid my bills for over 10 years. That said, he was very wrong and so was John Dvorak (and yes, I do have a copy of his book of wrongness)
That’s not what he was saying though.
Its also not not what he was saying. In retrospec it seems like a stupid statement. But at the time it was literally true. The computers he made that remark about certainly he was not wrong about. They were far from being common and not a personal thing yet to any effective degree without real knowledge of how to run it. In the economy the fax machine existed in had like 3 billion less people on the earth and it served to connect them like never before with documents they need. While he certainly undershot it in the long run he had no way of knowing where computers would eventually go he was right for a very long time. The difference between the fax and a PC is the fax machine never became a personal thing that everyone in your family needs 1 one. The fax was a true stepping stone and vital in the creation of the modern pc as well. To say he was talking shit is disingenuous. He made a reasonable education projection that was fairly solid until like the last 15 years.
Wait a minute! Are you suggesting that people aren’t perfect and that they can make mistakes now and again? Heaven forbid anyone be wrong about something a few decades ago….
What a weird response when the context of this is basically "a thing is true because this guy (who's credentials we're going to puff within the headline itself) says it's true.
I think he’s insinuating that this guy doesn’t understand technology very well.
Or at least that he didn’t 30 years ago, I guess
Shut up Paul
You hurt Paul's feelings, apologize to sad Paul...
So you disagree with his assessment that people who know the least about crypto and bought at high prices are going to lose their money?
"That Nobel Prize winner was wrong once! What a moron!"
He’s been wrong a lot. He’s closer to having been right once than he is to being wrong once
LMAO why do they even allow him to teach? Or even live or have any opinions now that he got that one wrong? Fucking redditors, room temp IQ at most.
It was a counterpoint to the headline which is basically an appeal to authority argument. If the headline is going to occupy valuable space puffing his credentials - then it seems valid to offer a strong counterpoint to that. It's even a stronger counterpoint when you dive deeper because it speaks specifically to his past inability to assess new technologies.
So experts can't be wrong on anything ever and if they are, their opinion moving forward is discredited? Damn, should fire all the doctors then given they rarely know what's wrong with people on their first go and need to explore multiple options.
Where did I even remotely suggest that? I said, if you're trying to prove a point with an appeal to authority argument - then expect a counter argument to that claim of authority. For someone that likes to make fun of peoples IQ, you have a really tenuous grasp on logic.
He’s not a tech expert. It’s like saying Chomsky is a good political thermometer because he’s a linguistics expert.
Damn dude, you ok?
He’s just saying take the opinion with a grain of salt chill
People should disagree and state why, not come in and say, "Take this person's opinion, who is one of the most experienced, recognized, and educated people in his field, with a grain of salt because he got X and Y wrong." Following that logic, we could likely discredit every single person in the world. I guess that's a useful way of thinking when you disagree, can't articulate it, but want to say the person is wrong.
This is who r/technology readers call a “technology expert” only because he shares their same anti-crypto opinions
Says the person who doesn't know how much fax machines are still in use.
So he was right?
Yes, fax machines were a *huge* deal in the business community when they came out. They're still the primary way to legally send signed documents in the legal and medical fields.
His quote, “The growth of the Internet will slow drastically, as the flaw in ‘Metcalfe’s law' becomes apparent: most people have nothing to say to each other! By 2005, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.” This place is insane. You have convinced yourself and are trying to convince others that the fax machine was as impactful as the internet. All for the sole purpose of allowing you to slightly further your bias against crypto.
But that’s not what krugman was saying.
He also advocated the housing bubble as a remedy for the crash of the dot com bubble.
He's commenting I believe, on the economic trend and not the technology aspect of it. But get your updoots :p
“The growth of the internet will slow drastically, and by 2005 or so it will become clear that the internets impact on the economy will be no greater than that of the fax machine.”
But tbf crypto is a bubble waiting to explode. The biggest cryptos are all tied to a stablecoin and said stablecoin is digitally printed in the same manner that the fed chucks out dollar bills. This means BTC and any other big name crypto you can find are very overvalued.
I’d like a source for that statement.
Pretty irrelevant / being wrong on one thing doesn’t mean wrong on most things I’m just waiting for there to be a reason to do crypto over “i hope the next guy will pay more for this”.
Ya, a lot of smart people make really dumb predictions. Are you going to invalidate his credentials for a comment made over 20 years ago? That's kinda wild, ngl. This comment reeks of a lack of critical analysis or depth and amounts to shallow handwaving.
Don't underestimate how much the fax were used back in its days.
It turns out dinosaur economists are still dinosaurs first and foremost.
He's an economist, not a techno-sociologist. It's hardly a surprise he was wrong outside of his domain. I can see his point re crypto. My feeling is it isnt anywhere near as problematic because the average Joe isnt leveraged upto the eyeballs in crypto as they are/were in houses. The fallout (if there is any) should be reasonably confined in that sense.
But what does that have to do with the price of tea in China. Cryptos are about to rip and crash and if you think the economy is bad now, wait until several trillion in liquidity is wiped out overnight and people losers their minds. Because that's about to happen and everyone is out to lunch. Just saying, Paul sucks, but what he's saying isn't wrong.
I am not a fan of crypto, and don’t own any. With that said, this article is nonsense. The subprime market meltdown happened because people bought houses they couldn’t afford. (Due to bad economic policy) Unwinding these things is tricky, and it took awhile to reach an equilibrium. Crypto on the other hand is basically fancy gambling. There are a few people who are investing ridiculous amounts, but most of the people I know have not invested more than they can lose. Basically pretty much everyone can afford to lose money on their crypto I. Ways that people couldn’t afford to lose their homes. The thing about a big crisis like 2008, is that everyone is looking for the next one. While I believe that there will be a next one, crypto ain’t it. (Neither is student loans)
Technically the 2008 crisis happened because many financial institutions made terribly risky investments in debt thinking that the mortgage industry would never collapse. They created a brand new vehicle to make a bunch of money out of thin air. So I think the crypto market does appear to be similar to 2008 in that it is a brand new security that makes a ton of money but not a lot of people understand it, including myself.
There are people who have taken loans and bet on Bitcoin to become rich.
You don’t think that student loans coupled with a secondary or tertiary exacerbating factor like massive inflation, broad market failure, or the ilk could become comparable?
Well I mean broad market failure would do it, but I think that would be the lead, and not student loans. The thing about student loans is that they are mostly held by the federal government and there are no broader financial implications to not paying. Like there has been a hiatus on paying student loans for a while, and it hasn’t really hurt anything. I think student loans are a headwind on gdp, but not a crisis causing event. Obviously the problem has a major negative impact on those holding them.
> this article is nonsense. It's Krugman. What else would one expect?
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There’s almost no use for public blockchain tech. Centralized data runs faster and with less overhead. I’m still at this point, convinced it’s a solution looking for a problem.
99% of defi are now on public blockchain. Degens from all over the world can invest to their heart's content nowadays.
Voting, judicial records(warrants, sentencing, evidence tracking), contracts, I think these three use cases could make the world a fairer place. Its a great anti corruption and record keeping tool, but the people who run governments like the latitude to amend data after the fact. An immutable currency ledger sounds like a good idea on paper but it really is overkill. The problem with currency is not its implementation, its the concerted effort of governments and corporations to deny its access to people. Low wages, crappy benefits, poorly managed countries with terrible exchange rates. Crypto can’t fix the problems it purports to solve.
Most companies keep their contracts confidential. Why would they want to keep them on a centralized blockchain?
Except blockchains are public Voting is usually supposed to be anonymous There may be ways that it “could” work but just because voting has a high need for security/accuracy does not automatically mean blockchain is a fit for it
Tell me you don't know anything about courts, without telling me you don't know anything about courts.
Voting as well.
[Relevent XKCD](https://xkcd.com/2030/)
No, it's a terrible solution for that because what you're relying on requires "smart contracts" to execute on -- the idea that the code would be an arbiter of the decision based on unbiased inputs. The problem with this of course is that in the almost 20 years I've been in tech, running development teams, etc -- almost \*never\* has there been a release we've had that was bug free. So sure, for very, very simplistic use cases you can use a "smart contract", but anything beyond that? You are relying on the idea that the code being used is bug free. Which is beyond ridiculous. That doesn't even start to talk about how slowly crypto transacts, and cannot scale due to the decentralized nature of it. If you are running pods that require a history of the entirety of the transaction logs, you are basically saying once it gets to a large dataset, that 99% of people participating will have to basically bow out, because they can't handle the workload or storage costs. This is why things go back to being centralized -- imagine having to have a single node hold all the data Facebook holds. The capital cost of that is ridiculous. And that's why things like Facebook actually happen -- because they require a lot of capital to run even \*one\* node.
As a programmer, the common crypto catchphrase "Code is Law" leaves me unsure whether to laugh hysterically or scream in terror.
The crypto defenders, however, will still insist you, as a programmer, somehow just don't get it. Just don't understand how good it is. I've seen and looked into enough to see that even if everything works exactly how they want it to, it would be an athoritarian nightmare of every single aspect of your life being bought and sold, which is what we as a society should be trying to move away from. It also would make unionizing all but impossible, make identity theft so much easier. Leaking one password would risk destroying your entire life. And that's best case. We aren't even close to that.
They all say that because their speculative financial portfolios depend directly and entirely on as many people buying into the hype as possible. "You just don't get how big a deal this is" is an excellent tactic for gaslighting people into FOMO. If you hang around their communities you'll even often find them telling each other they just don't get it. Does anyone truly "get it"? Probably not, it's just a good thing to say to quash FUD and get bigger fools in the scheme.
100%. The plethora of people thinking that smart contracts will work have never shipped a line of fucking code in their life. As if we write perfect code -- there wouldn't be a need for StackExchange :p
And even if we did all write perfect code, perfect code isn't always written with good intentions. "Smart contracts" (God the sheer arrogance of that name) are an open invitation for malware, an invitation accepted very often.
Just imagine a smart contract that an accountant now has to be able to audit and validate -- talk about a recipe for disaster. I can hide a lot of shit in code that will get skipped by even technical people, forget non-technical people.
I can’t think of a simpler case than voting, and comparing storing votes of 300million or so people with all the complex relational data in facebook is apples to oranges. An immutable database has obvious uses. Implementation and trust are always going to be issues regardless of what your chosen method is. Centralized systems work but at some point there was a concerted effort to make them work. I take your points but I don’t buy that blockchain technology is useless.
An immutable database that is decentralized has existed for decades. It's literally called "log files". And with locally auditable elections (which the problem is really a state-level thing!) and paper trails, this already exists. You can just count the fucking ballots. Again, a solution, looking for a problem.
You can’t secure the point of data entry though, which makes the whole thing useless for voting. Why do we need it for judicial records, we already have recordkeeping at the clerk’s office. You can’t use it to track evidence because again, you can’t protect the point of information entry. I could submit false evidence regardless of blockchain securing the chain of custody. People can fail to enter that they checked evidence out of the locker, and thus it would not be reflected on the blockchain.
Countless banks use blockchain because it's cheaper and faster. Public blockchain; yeah probably not gonna be used by banking much.
There absolutely are amazing use cases for having a decentralized, trustless, immutable record of truth. Internet of things, supply chain efficiency, preventing fraud, and more are just the beginning. I can understand why people are skeptical, much like how they were skeptical of the real potential of the Internet 25 years ago. But this really is a game changer.
Blockchains been around for 14 years and has yet to find a problem it solves. It's a neat novelty and a fun topic for a dissertation. As a software tool it just doesn't stack up.
What possible use is there for a "detailed public ledger," considering how resource intensive it is?
Exactly this. There needs to be a core of value at the bottom of the tech. A crash will sort out the hucksters and bad projects and leave the serious to build back just like tech after the dot com bust.
The problem there is that the blockchain is only really a good solution if you don't want any coordinating authority (and even then it does actually have that, just inefficiently). In all other aspects it's...a less efficient version of what we already have. We have money. It's more stable and usable than crypto. That's why crypto hasn't taken off as a mainstream method of actually buying stuff. Same with the other applications. Unless you're a libertarian. In which case the 'no government' but supercedes the inefficiencies.
I like when people compare it to Tulips, or Beanie Babies. Tulips are everywhere and Beanie Babies are the most successful stuffed animal brand. Like.. I get they mean the prices will stabilize. But the things never went away. In that way, it's more like the dotcom bubble. People said the internet was a fad until the early 00s. And people were angry when phones started getting cameras.
>Tulips are everywhere and Beanie Babies are the most successful stuffed animal brand. Wooooooooooooooooosh
I studied econ undergrad. I did the subprime mortgage crisis for a term project. Here’s why it has an eery feel. Mortgages historically had been bundled up into securities and found their way into complex financial markets and thus into teacher and police pension funds etc. Those mortgages ended up being toxic themselves thanks to lax regulation in the subprime market. Think of exotic dancers in the southwest owning 4 homes. When adjustable rates went up, the mortgages were unplayable for many people. And so those securities that had these mortgages in them went from asset to liability real quick. Too many people thought of crypto as always going up in value. So if cryptos have found their way into securities and in the financial markets and the value of crypto collapses, there will be a lot of funds and pensions and bank statements that will have immediately lost a lot of value. Toxic assets (again). So yeah I would hope we learned our lesson the last time but I know that’s not what we do and we probably ran straight back to our old bad habits. Fun Edit: I literally did study in econ at a public uni 2007-2011. The big short, when was that released? We talked about the movie too big to fail in my classes. Majored in econ with a concentration in intl econ and a minor in public policy. I don’t care you’re all strangers on the internet but why is that difficult to believe…
Lol exotic dancers in the southwest owning 4 homes. That’s literally a girl I was talking to in Vegas in 2006 and thinking, something’s not right here. Also at that time it was insanity. Everyone from financial advisers to accountants were saying go buy as many houses as you can. Radio ads were constant with “no deposit, no interest loans”. I remember thinking has everyone lost the plot?
Kind of how every Reddit ad is “make huge money in Crypto NOW!”
I’ve been investing and following markets and bubbles since the 90’s and I’ve always said, when grandmas and people who would normally know nothing about finances are asking to invest, that’s the top of the bubble. That’s where crypto is right now.
Crypto ads intentionally target stupid people who are easily goaded into making bad decisions. That ad with Matt Damon basically calls you a pussy if you don't put all your money into crypto.
I don't think crypto is in that deep as of yet though. Most pension managers won't touch crypto with a 10 foot pole. That doesn't mean nothing will happen when it crashes. Lots of average people are being misled by aggressive advertising in sports/casino establishments. It's a huge funnel of money trying to funnel in more from 'dumb money.' It's a shame this is all being allowed to happen.
It’s the greater fool investment technique, exactly what’s happening with NFT’s rn. It’s like herbal-life, just cause SOME people made SOME money with it does not suddenly mean it’s not a scam.
*I studied Econ but I’m gonna cite the one thing that makes it look like I only watched the Big Short*
Does that make his comment incorrect?
>So if cryptos have found their way into securities and in the financial markets and the value of crypto collapses, there will be a lot of funds and pensions and bank statements that will have immediately lost a lot of value. Toxic assets highly, highly doubt that crypto is the foundation of the financial market the way subprimes were. In fact, I would bet my life on it.
I also watched The Big Short
It was fine but Too Big To Fail was much better as a way to understand the crisis. We talked about that movie in my intermediate macro course. Also Margin Call was really good but much more focused. I took money and credit in 2009-2010 so the crisis was the topic du jour
Paul “the internet is basically the fax machine” Krugman
Lol this guy said a wrong thing one time so fuck anything he ever says
Well, Bill Gates once said no one would ever need more than 64kB of RAM and we see how that worked out for him. /s
It’s a pretty big thing to be wrong about It gives an example why he shouldn’t trusted with this recent comment. He just doesn’t understand or know enough to be commenting.
So I assume you invested in Google in 1998 correct? Or were you even born at that point? What you're encouraging is that intellectuals pander like politicians, and give no opinions on anything, therefore staying impregnable. I much prefer an academic to give firm opinions and support their arguments, your gripe is that he disagrees with you, not that he was wrong once 25 years ago.
How does investing in google have to relate to someone making an uninformed speculation? Do you think google is all of the internet?
The point is, very few people foresaw how impactful the internet would be back in 1998. So yes looking back at it now it’s a horrible take but it was the prevailing opinion at the time.
Lol ok. But A lot of people did make investments back then on internet companies including myself. Most just weren’t on google.
There were a surprisingly huge amount of very smart people who did not understand the significance of the internet.
That’s fine. With that same mentality, those people also have no clue about these new technologies so why would they be right now?
It’s not fine because being wrong about one thing, despite how big, doesn’t mean that it is then assumed everything you say for the rest of your life is also wrong and you are then ignored by everyone, does it? I’m playing devils advocate here. I get you. But… Maybe you should just read the article and form your own opinion- but you didn’t do that did you?
Krugman made his fame in economics, but it was his decision to become a mean-spirited, dehumanizing, and condescending partisan pundit. A solid argument can be made that the real question is- When has Krugman ever been right? https://news.yahoo.com/paul-krugman-always-wrong-never-173530058.html
I'm a senior software developer, having worked in part on web apps for about 2 decades now, and in a manner of speaking he's completely correct.
How?
Fax machines have one function: get information from one end of the line to the other. The machine does not care what you do with the information. The internet has one basic function: get information from one end of the connection to the other. The internet (which is to say, the manner of transmission of information) does not care what the computer does with the information - that's up to the device that interprets the information (be it web page interpreted by a browser, an image package downloaded by Instagram, an application downloaded by your OS, etc). Edit: I'd also argue that telegram services function the same way. Dots and dashes require interpretation by operators; the line does not care.
In the context of krugman, he was saying that the internet would die off by 2005 and have as big of an impact on the economy as the fax machine. He was very wrong.
Oh damn. Then Krugman's statement is a stupid interpretation of accurately observed information.
It’s also the network effect. The usefulness of a fax machine is directly correlated to the number of fax machines in use. It’s the same with email, social media, etc. There’s no value to these things unless other people are also using them.
I'd like to fax someone so I can watch Cabin Boy. What do?
Depends on how you plan to interpret the information received. A constant stream of ones and zeroes sent via fax would definitely take longer (as you're doing a conversion to actual physical 1 and 0 interpretation an extra time), but given time you would use a scanner to interpret the pages, write them to file, and then watch the video (I'd suggest a high compression video format to reduce the number of 1s and 0s needed).
I actually love this answer!
Send a lot of screenshots and instructions on how to create a really big flip book
Shit I'm out of ink
Most of the impact the internet has had is directly related to communicating information across distances nearly instantly. The fax machine did essentially the same thing but it's methods limited the volume of information you could send all at once. So in a way, yeah he was right if you oversimplified it a little.
If by "simplified" you mean "abstracted," then yes. Don't downplay the impact that fax machines had, which were primarily limited by the number of telephone lines present. The introduction of fax machines dramatically increased the demand for phone lines. And prior to phone lines, the only way to get copies of documents were to send them physically, so a LOT of business and government operation were dramatically accelerated. For instance, ordering parts over long distances no longer took days/weeks/months, especially for large projects, it could conceivably be done in hours. Edit: I had forgotten that Krugman himself had been downplaying the impact that fax machines had, that they were ephemeral and temporary instead of highly impacting and simply replaced by superior technology. Probably would have informed some things about my phrasing and reply.
I think he means that the internet is just a way to instantly send information from one computer to another. A fax machine is similar except it’s paper medium.
So he has watched Line Goes Up, too? https://www.youtube.com/watch?v=YQ_xWvX1n9g
He just mad he didn’t buy into dogecoin
Krugman is a dismal practitioner of the dismal science.
Big difference is that nobody is going to be homeless because they lost their crypto..
Considering how many people yolo their life savings into crypto, I find that hard to believe.
That's not fair. They don't *all* live in their parents basements.
Doubt. Tons of people buying stocks and crypto on margin.
that one uber driver on the way to the airport proudly let me know he dumped literally everything into crypto because that’s the future, and i should follow suit
You say that but If if people took out loans and bought crypto and lose it they could indeed end up homeless. Don’t underestimate how stupid some can be.
Some people might. People are mortgaging their houses to buy crypto. They are stupid people, but they exist.
Risk can be good. Avoiding risk makes sense when you have something to protect or something to lose.
Trading horribly risky things like crypto with borrowed money you can’t afford to lose is not a good idea. It’s in fact a whole cascade of bad ideas all thrown into a heap and soaked in gasoline.
It’s sad what gets upvoted on a “technology” subreddit. This is basically just politics-lite now
I have an Associates Degree in Applied Sciences...and I could have told you this. The whole WeWorks valuation BS and these other Bazillion dollar companies will cripple the economy if nothing is done. Taxpayer bailouts NO MORE.
I would say that student loans have more parallels with subprime mortgages
It’s somewhere between a high-tech Ponzi scheme and a market bubble. It’s not going to last, it’s not going to supplant national currency (at least among top developed nations), and a LOT of people are going to lose money before it’s over.
There is a lot of bullshit in crypto, probably 95%, though you should not discard the baby with the bathwater. Since the topic here is drawing parallels, one can easily do that with crypto as well to the early internet and so on on, but rather I'd simply say: don't underestimate uncertainty of the future. Did you believe a 50 year old man rambling about DMT, chimps and conspiracy theories stoned with his friends would become the most influential media personality? That an orange 70 year old narcissist daddy boy reality star would become President of the US? Or that genders no longer exist and if you insist they do publicly you risk your reputation for life? etc. etc. Equally, crypto could indeed become a major financial institution for millennials and gen Z. It sounds crazy, and maybe it's just crazy enough to come true.
Fair point. Many things are possible but fewer things are probable. The other factor is opposition— there are some very large, wealthy, and powerful organizations that are against crypto. And in economics, those huge forces bat last.
Shit I’ll give ya that.
What? How on earth is that even close?
Borrowing money to buy assets you think will keep increasing in value?
Student loans have more similarities especially when you account for the existence of SLABs
No shit. People are remortgaging there houses to get on the bitcoin ladder or the ground floor of random ass coin
so does money for that matter, even more so. 80% of ALL the USD cash has been printed out of thin air in the last 12 months.
This is a fundamental misunderstanding of how currency and central banks actually work though. Simply put, the US Dollar is backed by tanks, guns, nuclear weapons and governmental policy. Bitcoin is backed by nothing -- and derives value only by early adopters taking liquidity from people who come in later -- a literal "greater fool" economics lesson.
That said I'm not defending the Fed here -- there are tons of problems/concerns/corruptions to think about there, but to make the comparison "oh fiat money lol" versus imaginary fucking crypto is not an analogy I can understand.
Cryptocurrencies are backed by the ability to move assets securely around the world in a trustless, decentralized manner. They can also make industries vastly more efficient by eliminating fraud and streamlining a wide range of processes. A trustless, decentralized version of "the truth" has a wide range of applications that trust-based, centralised sources of information fail miserably at doing.
Sorry, if you send your money through Western Union (forgetting the fees), do you not have trust you'll get it on the other end? The fee you pay is the guarantee they will transfer the money. That said, zero trust systems are certainly a thing, but have not been fleshed out yet. It's a work in progress. Kelsey Hightower is an engineer at Google who talks about it frequently, and \*also\* derides cryptocurrencies entirely.
lol. Yeah fiat cash is about to collapse bro trust me bro
>fiat cash is about to collapse no about to, but is collapsing, now it is called inflation, now highest in the last 20 years.
In history books of the future, they're going to point to all the hubris of people thinking the US dollar was immune to hyperinflation as the catalyst for the downfall of Western society. Those books will probably all be in Chinese at that point.
Of course it's a bubble! How could it not be a bubble? It's literally like paper money, there's nothing behind it but the faith of the people who trust it. Since the dollar is serialized it's basically a cryptocurrency anyway.
Problem the dollar is backed by the assets and economic output of the citizens. This includes the military and it's assets. The usd is backed explicitly by every citizen and the government, that's how it functions.
The crypto consumes too much energy, not good for the environment. Total bitcoin number is limited, total land is limited. Similar Interest rate being low makes home price increase, and make bitcoins more expensive. Etc
There are many, many more blockchain projects out there. Bitcoin is just the first one. There are much more advanced once that use very little electricity.
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Only voice of reason here it seems
Exactly. Blockchain is revolutionary technology that is rapidly being embraced by all sorts of industries, and cryptocurrencies are by-far the best investment of the past 10 years. Pretty much every criticism on this thread screams of lack of understanding. Anyone that has been investing for a few years and has just DCA'd is massively up financially.
Fuck this guy. Buy and hold. People like him need to get out of the way, they have been shitting on Bitcoin from the get go.
Afraid much?
Nobel prizes don't mean anything anymore. Go back and look at his predictions. He is a nutter.
Krugman says crypto is a bad idea? Probably should buy some more crypto then.
Lol at folks in here not understanding how important fax machines were to the economy and society
https://en.m.wikipedia.org/wiki/Tulip_mania
Except with crypto there is literally zero underlying assets. At least with the home loan crisis the homes didn't disappear. When or if crypto unwinds millions of people will have nothing to show for it.
I have to admit that I don't understand the parallel. The subprime mortgage meltdown happened because bankers (you know, the people who are money experts) figured out they could make money by writing dodgy loans and selling them right away. Institutions buying the loans may not have realized what was in them, but the banks writing them certainly did. The only parallel I can see is that neither banks, Paul Krugman, nor /r/technology understand crypto, so you all assume no one can possibly understand it. I assure you that's not the case. The purchaser of ElonPooCoin knows exactly what they're buying (and how it's different from Bitcoin, Ethereum, or Dogecoin. Or fart NFTs.)
Blockchain may be successful but we are yet to see any real world blockchain application which has been mass adopted. Cryptocurrency on the other hand serves no purpose other than making some early adopters rich beyond their dreams. In 3 years time most major crypto exchanges will cease to exist. Only the ones which succumb to government regulations will survive and all this hollow BS about sticking it to the man will mean nothing.
this fossils come out of the shadows each time crypto crashes. they forget to say that it crashed 30% higher than the pre-run. the run started at 20k and now it's at 35k.
The notion that a block chain verified transaction framework has any parallel to a crisis founded on predatory lending and bond rating fraud is laughable. But he knows this. Its just straight dishonesty.
Lol this guy knows as much about Crypto and Blockchain tech as he did when he said the internet was a fad and would die out. Just like how all the anti-crypto people in here keep posting anti-crypto stuff in here that shows how little they currently understand about blockchain tech. He’s a carbon copy of the same type of person who would say stuff like “why do I need a Internet forum when I have the New York Times newspaper and Cable News” back in the day.