
Farewell from the Pineapple Fund - ca98am79
https://www.reddit.com/r/Bitcoin/comments/8ieffr/farewell_from_the_pineapple_fund/
======
bmpafa
I never felt like this story got enough coverage. This modern day Chuck
Feeney[1] demonstrates the precise sort of selfless generosity we need more
of, but most of my news feeds are busy baiting me with the latest bit of
gossip.

I don't have solutions I guess, just grumbling. But thinking about that makes
this historical act of kindness a little bittersweet.

[1]:
[https://en.wikipedia.org/wiki/Chuck_Feeney](https://en.wikipedia.org/wiki/Chuck_Feeney)

------
tlb
Thanks, Pineapple person / people.

The benefit to society from donating to charity can range from positive, to
zero, to negative. Often negative. Anyone with money can donate, but it takes
a lot of work to donate to things that make the world better. The Pineapple
fund seems to have put in the effort to donate to projects with high positive
impact, in a way that does the most good. (It's possible to donate to good
projects in bad ways, such as by requiring them to use the money to build a
building with your name on it.)

Doing the work can be exasperating, because you think "I'm giving away money,
and I have to do all this work too???" But it's the work that makes the
difference.

~~~
jdamon96
Can you explain to me why you believe the benefit to society from donating to
charity is often negative?

~~~
dragonwriter
> Can you explain to me why you believe the benefit to society from donating
> to charity is often negative?

For one thing, the fact that it is tax deductible itself results in it being
the focus of self-serving tax dodges that aren't really charitable. If
charities remained tax exempt but donations weren't tax deductible, the abuse
incentive would be removed.

There's also, of course, well meaning but counterproductive charities, but the
subsidy also probably increases the share of donations that goes to those,
since it reduces the incentive for donor diligence.

~~~
beojan
In the UK, we have Gift Aid, where instead of reclaiming the tax on donations,
the tax paid is also donated. That sounds like a better system to me.

------
lavezzi
Really enjoyed seeing this take place from start to finish. What a fantastic
example of modern day altruism.

------
sibeliuss
Thank you so much!

------
loceng
Edit to add at top: I fudged my numbers relating to benefit that charitable
donations will have on taxes, I will research proper numbers and update them
if I ever get around to publishing something more official - and yeah, I look
like an idiot because instead of properly researching my distaste rushed a
reply. I believe the concepts I otherwise write about are valid.

Someone posted this comment on Reddit:

"Thank you for doing what so many wish they would do in your position but yet
fail to when they get there. Really proud of you and appreciative of your
generosity." \-
[https://www.reddit.com/r/Bitcoin/comments/8ieffr/farewell_fr...](https://www.reddit.com/r/Bitcoin/comments/8ieffr/farewell_from_the_pineapple_fund/dyr24cu/?st=jh0o55e6&sh=af117be2)

And I pasted my reply below - I'd appreciate conversation to get into the
depths of others understanding if you have contrary thoughts to mine, and so
if you believe my thinking is wrong then I can further refine my understanding
and nuances:

There's likely no generosity here. All of the donations were likely related to
countering capital gains taxes. Depending on where this person lives, let's
say their capital gains taxes are 40%: for them to owe $55,000,000 they would
have sold and removed roughly $140,000,000 from the ecosystem; How a qualified
appraiser reasonably determines "fair market value" in something as volatile
at incentivized crypto-assets - I don't know - it's probably going to end up
gouging society via taxes as well.

Likewise, they potentially did absolutely nothing except do mining early on
(or make a good bet) and promote Bitcoin et al, getting more people to
adopt/buy them - allowing them to then sell with where we're at in the scheme.

These incentivized crypto-assets are also a Ponzi-Pyramid structure, where
like in a traditional Ponzi scheme it's usually the early adopters who gain
more and the later adopters who lose more; technically with a single stock
broker making the decisions, they would get to decide exactly who profits from
the investment, and who's money they run or exit with.

It is possible they donated more than they required to counter taxes, however
I doubt they'd verify that with independently selected third-parties - and
it'd be naive to merely take their word for it.

It's also other people's future money being donated - and those people are now
bearing the unrealized cost, until they sell at least; not such a big deal for
the receiving party of a donation, however it's a problem if they were
actually purchased.

And now unfortunately these charities have become aligned and vested in these
crypto-asset donations maintaining their current value, or promoting them so
they go up even for (for no actual work being done) - trying to get later
adopters to buy in a higher perceived value; if actual work was being done
that was worthwhile to pay for, people could pay in a non-incentivized crypto-
asset, if the immutable blockchain ledger is a primary value.

It's only reached such proportions because in part of its global nature, and
because there isn't a single stock broker - it's an situation that's been
forced on regulators around the world, and who are being influenced by
lobbyists to attempt to indoctrinate regulators based on their biased
understanding. It's a global pyramid of cards stacked waiting to tumble, the
people making the money are the earlier adopters, and those [platforms]
selling the shovels/services for this new "gold" rush.

Those who think society is oblivious to the Ponzi-Pyramid structures are going
to find disappointment. The positive rallying for Bitcoin et al is because
you're all aligned, incentivized to want them to work out - and that sentiment
isn't equally countered solely because people keeping the system in check
aren't at minimum disproportionately incentivized (e.g. they may have a
government job with a salary that pays fiat currency as their incentive to do
the work), nor are there the masses - the "HODL" rallying of both when a
crypto-asset value is at a high and a low is interesting, to say the least:
[https://hackernoon.com/analyzing-every-reddit-comment-
mentio...](https://hackernoon.com/analyzing-every-reddit-comment-mentioning-
hodl-since-2017-part-one-d536eb8364ad)

It is great - yes - that there is at least one person who perhaps did indeed
invest the majority (50%+1?; if they're telling the truth) of their crypto-
assets to charities who could realize the value now (and I like a lot of those
charities), or the charities may hold onto them until they crash in value. Or
they will slowly sell them off as a trickle to not upset the ecosystem [as the
ecosystem has seemed to have learned to manage for now] - meanwhile the
remainder of the community, likely individuals with the smaller amounts
invested, are doing the HODL rallying game keeping the perceived value
artificially higher - meanwhile earlier adopters are extracting money at a
rate that new money is coming into the system (based on the confidence the
stabilized price - maintained by the HODLing - allows for).

Now what about the unknown list of bad actors who have already entered the
system, who are perhaps planning to put more money into it to keep it
perpetuated, and will attempt at any means to cause more-to-all of society to
adopt it so the artificially perceived value - and wealth/buying power - is
unreasonably and unnecessarily reallocated weighted towards them, the earlier
adopters?

I would recommend everyone think through the long-term negative consequences,
they aren't outweighed by the potential positives - and those positives are
all achievable by non-Ponzi-Pyramid scheme incentivized means. The long-term
in discussions, particularly the negatives, is rarely brought up - I imagine
heavily to avoid flame wars, or you simply get "downvoted to hell" by those,
as I mentioned above, incentivized to rally for their gains.

It's interesting too that they didn't liquidate the $55MM (or their full
amount into fiat currency), and then donate that to charities. Aside from the
negative impact dumping that quickly could have on its perceived value - like
we've seen before, it's apparently better for tax reasons too to donate a
crypto-asset; I imagine now that larger financial institutions are involved
and other well-organized organizations have created a legitimate market
structure, perhaps like Coinbase, are keeping large sums of capital at bay
from investors wanting to buy a lot -- so they can buy up large quantities
when necessary to avoid exposing volatility.

If you think the layman person investing say as little as $100 (that little or
less for them to be aligned with the masses of the ecosystem, to be part of
the mob) is educated enough to make a sound investment decision, to understand
this complex holistic ecosystem, well you're wrong and if you profit off of
selling your incentivized crypto-asset you're taking advantage of people. This
is why stock markets were formed with regulations and oversights and due
diligence for individual companies, etc. Perhaps you reading this don't fully
understand it either, or didn't, and it's long-term implications. So are you
going to pretend it's not a Ponzi-Pyramid scheme and hope it works out, and
that society isn't actually being taken advantage of? I hope more of you
sooner than later realize this. Some people do know this is the game they're
playing, and they're happy to take advantage of others - however it's immoral
to do if they don't know they're playing that game.

The simple truth is the proposed benefits of the structures allowed with
incentivized crypto-assets don't work out long-term if you can't separate the
two systems. If the system inherently has a Ponzi-Pyramid structure - you
can't simply dismiss that, and you can't - as a society - allow it; the two
systems being a model that leads to "incentivized collaboration" leading to
independently owned services tied together through a transaction layer (that
logically doesn't make sense to have an incentivized structure), and that of
Ponzi-Pyramid schemes.

~~~
gfodor
The "rich people donate money to avoid paying taxes" meme has always been odd
to me. If you donate $1, yes, your tax bill is lower, but you are also out $1.
Unless you are corrupt and are funneling money to your own foundation or
something, donating money is not a way to beat the system wrt taxes, its just
a way to shift money that otherwise would have gone to the government to
charitable entities instead.

Also, it results in more loss of wealth for the donator: if I owe the
government $1 in taxes, I can choose to pay the government that $1 or, if I
loathe the idea of the government getting that $1 and I can afford it, I can
choose to give ~$3 to a charity instead.

The fact that rich people choose to donate to charity at a rate of about 3:1
instead of paying the government says a lot about their faith in the
government in spending their money wisely.

~~~
lmm
Your "charity" doesn't have to be very charitable. It can employ your friends
on high salaries, it can promote your own political causes, it can promote
your own hobbies/interests. It could be an art museum in the house next door
to you open only by appointment with you, for a particularly transparent
recent example.

~~~
maxerickson
Pineapple Fund has gotten a bunch of public thank yous from the recipient
organizations, so that isn't the case here.

