I think he was right. My criterion for whether someone's in a cult is that eerie feeling talking to them, where they get angry at any challenge, they can never quite seem to explain why they're as invested (metaphorically and literally) as they are, and so forth. It's that sense that they themselves don't know why they do it, and there's a lot of emotional pathology that goes into shutting off from the outside world and protecting their obsession from reality. That absolutely typifies Bitcoin/crypto obsessives I've met.
He had unlimited money ($25k a month was nothing) and freedom to do anything he wanted for 15 years. He was never harmed. The organization collapsed as the
elders passed away partially due to the rule of no proselytizing so no new members.
edit: they had about $50M split between 6 people near the end. I don't really know why more people don't do this: register a religious organization, require all members to assign all assets and money to the organization, work together for the rest of your life building your wealth tax free and watch how quick your wealth amplifies as you acquire properties and make investments.
No offence, but is English your first language? This sounds entirely unrelated to the concept of a cult. I think you're just describing a company, an LLP with a religious focus.
Hearing about a group of people who have successfully implemented small scale communism with a religion involved and they thrived for over 100 years isn't something you want to shout from the rooftops as it would encourage more of this behavior.
In contemporary English, cult refers specifically to brainwashy abusive practices that attempt to control every aspect of the person's life and tend not to allow you to leave.
Some groups like the Amish and the ultra-Orthodox Jews in North America live in insular communal societies, but most would not describe them as cults. (Though sometimes the more isolationist groups do get called so, maybe with some cause.)
> rule of no proselytizing
> had about $50M split between 6 people near the end
.. are you sure that isn't just a tontine?
Can you please share the name?
That’s a ripe field for recruitment into risky gambles like cryptocurrency and the slow burn aspect means it’ll be reinforced by the first rounds who do in fact get wealthy, at least on paper.
I am lucky enough to do what I love, and have a cache of coins so i don't really need to work anymore. But what would I do all day?
It's actually fascinating, neurologically, even if a bit morbidly so.
Perhaps this is why Netflix Korean lethal gambling TV series Squid Game is so resonant in the West.
The modern problem, perhaps, is that now we have new forms of gambling (crypto! day trading! spread betting apps!) which are perhaps not as obvious, are not as visible in society, and fall outside of existing regulations?
And how could it not erode? It's difficult to take pride in your hard-earned cash when it's all coming from a stack of advertising media fueled by advertising media, as if all the way down.
They would never have an endless Instagram feed of fashion model people with jetset lifestyles, building on decades of TV shows like "Lifestyles of the rich and famous" or "Keeping up with the Kardashians". Consider how much you have heard about a Hollywood star or Jeff Bezos compared with how much you have heard of Hugh Grosvenor, the world's richest person under 30. Before TV, before newspapers, before most people could read, you'd never have heard of either of them.
( https://en.wikipedia.org/wiki/Hugh_Grosvenor,_7th_Duke_of_We... )
Pareto distribution is the norm, marked by brief transitional periods during which the people at the top of the pareto distribution change. These transition periods correlate strongly with wide-scale disasters such as war or plague.
Wealth inequality is an important factor but expecting everything to boil down to one simple factor is overly simplistic.
I assume wealth inequality is worse today than Ancient Egypt, but regardless of how it is, this point is key.
Tell that to the sweatshop worker who made your jeans.
Or to those poor restaurant owners who now have to pay a 30% fee to the likes of Uber eats to maintain a steady income.
(If it's up to Apple, developers are next!)
Some poor industrial age miner with no better case scenario than becoming a respected poor miner would have been far more resilient (and surely many fell victim to similar schemes nonetheless)
(although if you're going to the Tudor era, maybe consider the legal restrictions on conspicuous consumption: https://bluffkinghal.wordpress.com/2012/05/17/sumptuary-laws... )
Maybe this topic doesn't interest you.
So by that rough estimate wealth inequality between top and average seems about the same back then compared to now. Jeff Bezos might be worth more than half a million man years, but not 10 times more. Also the Pharaohs owned more than the Pyramids so the estimate underestimates their wealth.
Could you blame them for thinking that anyone who works for a living is a mug, paying for the lifestyle of kleptocratic boomers? Cryptocurrencies provide an emancipatory (and entirely false) narrative. Why not gamble, and try to defeat the system?
The biggest thing robbing people of generational wealth is Social Security that takes 7% of your earnings for your entire life and when you die you have nothing to give to your children.
One of the largest contributors to wage stagnation is immigration policy. Previously a path to higher wages was higher education. Except those Universities (and big business partners) bring in immigrants to perform their high skilled labor and call them "graduate students" to crush middle class wage growth.
Another path to wage growth was previously to start your own small business. Try having a discussion with a group of 20-somethings that with very little money they could buy a pressure washer or other relatively inexpensive equipment and start a small business making $40/hr+. You'll be barraged with responses about how it's crazy because not every person in the country can get a job doing the thing I happened to give an example of, or how starting a business is really hard, or insurance, or licensing requirements in the state that they support.
You're absolutely right that the Boomers have fucked their kids and grandkids. But those grandkids, already in a hole, are shoveling down as fast as they can.
But most people are just being fooled by randomness.
It's not about knowledge / skill (picking index funds blindly is actually recommended form of investing these days)
It's not about odds (lottery with positive return is gambling, and insurance with negative return is not)
It's not about frequency (we're encouraged to contribute to 401k on every paycheck but not to play the lottery every week)
And to top it off, if you have a positive expected return on gambling (pro poker player, hedge fund manager), it stops being gambling either.
Gambling is either negative expectancy* with a bookie/casino or zero-sum. The zero-sum case is a bit more interesting: if you are better at betting then you can make a profit, but the people who succeed are not problem gamblers.
There is probably some argument to be made that trading some financial instruments in certain ways is similar to this latter type of gambling.
So my claim is basically that investing is an activity that should be positive sum and gambling is not.
* if you are smarter than the casino or bookie you will be kicked out so maybe you can make a small positive amount of money.
That being said, I still constantly feel tempted to check how my portfolio of very boring index funds is doing, despite having absolutely no intention of selling anything for many years.
The problem with this is obviously that consumer markets can be saturated. The number of investors does not grow with the number of traders. Adding more traders just results in a fight for market share.
When traders are pretending that other traders are their customers they basically started a game of musical chairs where someone has to lose.
Investing is a broad term that ranges all the way from buying a property to lease to short selling GameStop.
Investing is technically a gamble, but a characteristic of gambling in common language usage is the ability to get quick returns - we don’t usually use the phrase gambling to describe something that involves a 3% annual return. It’s also not usually called a gamble if you can spread your ‘bets’ enough to provide a high confidence of a low return (eg why the insurance industry isn’t usually called gambling, even though an individual transaction will be a win/loss from a profit loss perspective).
I feel that both the Lloyds names (https://www.theguardian.com/money/2000/nov/04/business.perso...) and the famous https://en.wikipedia.org/wiki/Long-Term_Capital_Management were engaged in a gambling-like strategy - positive expected return with possible downside vastly exceeding initial investment - even if it doesn't "feel like" gambling. But there isn't really a good phrase for that. Finance people sometimes say "picking up pennies in front of a steamroller".
One of the sibling comments talks about adrenalin; perhaps (and this is only half joking) it's like the "sexual content" censorship boundary in that it's only bad if people enjoy it.
Poker is highly skill/knowledge based.
Winning tournaments consistently is very doable for a good player.
In both cases "consistently" doesn't mean without losing from time to time. Even Buffet makes mistakes. As does Negreanu.
You may know him from his part in the congress hearings regarding gamestop.
I heard that in Iceland after the 2008 financial crash wiped out the banks traffic accidents went way down, as there were fewer traders speeding when driving home from work, as they were still buzzing with the adrenaline rush while trading (could just be of course their cars were all impounded to pay off debts...)
> How do cryptocurrencies work?
All transactions are done on the internet. Each unit of cryptocurrency is made up of a unique computer codes that can be bought and sold.
> Who runs cryptocurrencies?
Instead of a central (or national) bank there are thousands of IT experts, known as ‘miners’, whose job is to verify transactions and release more crypto-coins into the market. The Bitcoin miners use a system called blockchain.
They are sustained by their users, who believe the value of their digital currencies will increase (or at least remain the same).
AND THEN he told me about another friend who does the same thing--but with the tuition/living money his family scrapes together and sends him from Lebanon. To me, that was not only stupid, it was a staggering betrayal in trust. Imagine your entire family scrimping and scraping to get money together to send you to college in the US and then you just casually betting it on Bitcoin.
“[The ponies] keep making stellar returns year after year. It’s still early to make money on [the ponies]. [The ponies] are the future of wealth.” etc.
“[The ponies] are going to the moon” is my personal favourite, because what a nice thought that is.
Anyway, next time someone asks about cryptocurrency just tell them you already know it’s all about spacefaring horses and wish them well while you walk safely away.
And yes, I agree with the main point. $100b was wrong, but Coinbase still overwhelmingly proves the rule: namely that, setting aside the few Bitcoin millionaires who made irrational decisions and got lucky, the croupier is the only guy who goes home richer.
Do people really place 100% taker orders?
Quite right too.
It's the same type of people that would be hawking pyramid schemes two decades ago.
(the 2008 mortgage crisis almost reached that level and has actually done long term damage to the political system!)
That's a significant difference. And a misleading title IMO.
Edit: I'm not going to respond to the replies. I'm just going to add that I used to be a heroin addict, and the replies are classic addict: semi-coherent, indulging in the "ordinary people are just the same as us" trope, moving the blame to other things (with drug addicts it's very often alcohol, with bitcoin addicts it's apparently fiat money). None of them engaging with the point in the context of the argument - just warding off any perceived challenge to their addiction.
Curing addiction of stocks, gold or currencies sounds as stupid as curing addiction of bitcoin.
There are people sophisticated enough to have an edge in stock trading. Same for being a professional poker player. But this is a very very small % of the market.
And the seminal paper on the subject: http://www.econ.yale.edu/~shiller/behfin/2004-04-10/barber-l...
8/10 day traders in their survey lost money. But there were a few that made returns that not only beat the market but the transaction costs.
(I wonder how that's affected by fee-less trading, which instead tends to make money on PFOF and may have larger spreads)
> You can just buy bitcoin and hold it as store of value / investment
I'm not sure there's a similar casual use for Heroin. Talk about Cannabis and the sentence starts making sense again.
Also, accusing responses of being semi-coherent, indulging and defensive (and implying responders are addicts to boot) isn't really acting in good faith, even if you don't intend to respond. In fact, especially since you don't intend to respond.
Artificial snow doesn't cause shilling and gambling addiction, and HN isn't plagued by thousands of foaming-at-the-mouth Artificial Snow Shills who leap to its defense with rationalizations and excuses and whataboutisms and diversions like you and awrence just leaped to Bitcoin's defense.
awrence> I was just emphasizing how people point fingers at Proof of Work without considering the immense negative environmental externalities generated by the current fiat system.
No you weren't. Your comment didn't mention anything about Proof of Work or the current fiat system. We can all agree that it was pure unadulterated whataboutism, which proves my point (edit: as does your following reply. You even admitted yourself that what you wrote wasn't an argument for Bitcoin. It's pure whataboutism!). Thank you.
awrence> Whether bitcoin is a net positive environmentally or not is a different debate.
That debate is long over, and you already lost it. But you're trying to divert the conversation away from that debate you can't win, instead of offering any proof of your ridiculous theory that bitcoin is a net positive environmentally, because you and I and everyone else all know that bitcoin has a terribly negative environmental impact, and very few practical applications.
> When disagreeing, please reply to the argument instead of calling names. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."
Which energy markets?
It's not like bitcoin mining is legally or geographically constrained to countries with well-functioning energy markets and a reputation for environmental thinking.
Proof of work schemes could provide a positive marginal return when energy would otherwise be curtailed, but that's just a side effect of being a very price-elastic source of demand. These schemes can just as easily operate with polluting energy made cheap through local political corruption.
For that matter, the freest energy is stolen energy, so mining malware will forever have the edge on that front.
Bitcoin is neither clean nor dirty because it has no governance to make it such. At absolute best it is a neutral energy buyer of last resort, replicating all our political flaws on the world stage.
As chips commoditize and energy trends towards 100% of all costs, miners will step into these situations exclusively.
As far as your claim that bitcoin is useless that's a personal judgement. My personal judgement is that reintroducing sound fixed supply censorship resistant money to the world is of enormous benefit. But that's beyond the scope here. I don't think it's constructive to make judgements about what people value and chose to expend resources towards. If you have a problem with externalities then have a debate about that. But who are we to judge if someone wants to heat their pool? If they do so through carbon emissions then consider taxing that. The sustainability of the energy production is your issue really, not the energy use.
Why you’re paying Bitcoin’s energy bill:
>The vast computing power needed to create new bitcoins has driven up energy bills for residents and businesses
>Millions of people who have neither mined nor traded a bitcoin are nevertheless paying for bitcoins to exist. That’s because the vast computing power needed to create new bitcoins consumes enormous amounts of electricity and has driven up energy bills for residents and businesses, according to University of California at Berkeley’s Matteo Benetton and Adair Morse and Chicago Booth’s Giovanni Compiani.
A gamer can only run one machine at a time and, as much as they might try, they can’t play 24/7. It wouldn’t even come close to the cost of powering Bitcoin.
I doubt anything significant. Also I thing btc has the potential to explode (wrt usage) in a way gaming doesn't.
> All the VR and AR nonsense that is being developed and sold
^ also niche
> We have chips, we have electricity
mining is notably power intensive, relative to other chips/electricity usages. That said, so is heating, so maybe if miners replace their radiators?: https://news.bitcoin.com/the-crypto-heater-mines-digital-cur...
It's also notable that in developing nations (which are often the most populous) there maybe little appetite for luxuries such as gaming, but plenty of reason to invest in crypto precisely because of lack of faith in government/banking infrastructure.
The main point against them is that the only use case they have is going around financial regulations. Buy drugs, transfer money to a gambling site, accept a ransom or go around capital flow regulations in your country. There is absolutely zero reason to use it otherwise. Some of those regulations might be unjust or bad but then we should address that. This is even before we enter more imaginative scam attempts based on popular blockchains.
This isn't wrong, but this is also not an argument for bitcoin, it's an argument for Keynes' "bancor".
People still own phones without spellcheck?
Also, I'm not sure I agree with the "HODL" philosophy. btc has fallen a lot too, and the assumption "it'll all work out in the end (long term)" is exactly what can't ever be demonstrated (tomorrow never comes) until it all crashes, after which it's too late.
About the HODL philosophy: I don’t understand any other. I bought for long term (10+ years) as an investment with high risk and high possible reward at $150/BTC. The 10 years haven’t passed yet (only 8), so we can come back to this thread to see if HODL works out or not.
It reminds me of a quote from some comedian I heard many moons backs that went something like:
> It's funny when you quit drinking -- people always ask you, "Why did you quit drinking?" or "How come you do not drink anymore?" But why does no one ever ask why you drank in the first place?
That quote seems to lineup well with various discussions in this thread. What causing more and more people to go down this road? Personally, I think this is a subtle, yet massive, cry for help.
It seems like this is the only way out for so many people(or so they think), and that is what breeds the cult-like mentality. I wouldn't care about investing as much as I currently do, if my future did not literally rely on it. I do not make enough money that I can throw my money into a savings account, and it will be enough to retire on. I only have one choice if I want to retire one day, and that is to invest. I am mainly an index fund investor, and I still fear that even that is not enough.
When you are, more or less, forced to live in a rat-race, your only options are to traverse the maze and hope the cheese is still there if/when you make it to the end. And if that is case, I don't blame the other rats for trying to chew and naw their way attempting to escape/shortcut the maze.
Do I invest in cryptocurrencies? Yes. Do I believe in any of them have true utility or provide solutions for real problems? No. I invest in them because I find it a fun little game. I am not going to get rich on them or anything, but it gives me something to do when Fantasy Hockey / NHL is in its offseason. I can see why people get high on the 'hopium' though -- there isn't much to be hopeful for anymore.
I don't think anybody wants to return to haggling for piece of fruit they buy from the supermarket, yet somehow many of my friends are regular office worker that feel they have an edge over the highest paying industry in the world.
I can count the number of people I've met who genuinely beat the smart money, with no formal training, on the fingers of one foot. (The one guy who would maybe fit into that category was a physicist who was formerly a professor at Harvard, so still hardly the kind of person you were talking about.)
The problem is that ordinary people are replicating the strategies that professional traders use, without realizing professional traders bet other people's money, keep the profits, let their customers eat the losses, and reboot at-will with fresh "other people's money" when they go bust.
The "norm" (average) for money managers can be achieved by having half the money managers lose money to the other half. This works well for them, because when they win they win, and when they lose someone else pays. Money managers can go big or go home, and keep trying, because in the long run they're not eating the losses.
But people betting their own money on the same strategies actually lose their own money when they lose.
Gambling with your savings might seem like a personal choice, but in the end there will be bailouts that I will have to pay for. You might not agree with where I draw the line, but ignoring that there has to be line is putting your head in the sand and ignoring reality.
I swear, some people here want to live in a nanny state.
One person is not important, but if a million people engage in some economic activity we're all affected in the long term, so should have a word to say about this.
I can't blame you for choosing your source of income, it makes sense if you choose what it right for yourself. You are probably a highly talented individual that is leaving the actual value creation to the rest of us though, and one by one people are giving up.
Your comment addresses the latter. Unfortunately, that means it’s wholly non-sequitur.
Do you have any examples? The classic "authoritarian" human suffering example is the Nazis, or communist Russia - and I don't think either of those claimed to take away liberties for the sake of "their own good".
Cannabis (might) have real implications on mental health, I'm not sure I agree.
People used to see working as a normal part of life, and used to invest part of their salary in solid funds to retire on those investments later. Those in well-paying jobs expected to retire on a bigger amount than those in less well paid jobs.
Nowadays, people seem to view the idea of working as an insult and want to retire in their 30's on some insane gambling profits, both in the /r/wsb community, in the FI/RE community and the bitcoinists.
I do wonder what caused this attitude change over the last 10y or so.
For the system to be rigged in favor of the ultra-rich, you'll need a army of enforcers, the influencers, the lawyers, even the developers that are "just doing tech".
This might sound like a trivial difference but it is not. You actually can make money speculating.
Many of the behavioral patterns though are the same. People do get addicted to speculating and trading, and mostly with negative consequences, particularly if they do not learn as they go and rely on pseudo superstitious beliefs and truisms, which most traders do.
I can't understand why otherwise intelligent people are sucked into some cult-like gambling, wasting their lives away and talking about the upcoming disruption of the financial system in much the same way as QAnon idiot talk about the "Great awakening".
During my lifetime, some cultish obsessions made the round, but seems to me that "always on" social media has poured a lot of gas on the fire.
Intelligence isn't prophylactic against conspiracy theories, and crypto-cultism has all of the major features. It offers an alternative worldview where global elites are engaged in a massive conspiracy to keep the little people down, but with one weird trick the enlightened can stick it to the Man. Take fintech out of it and you're looking at a cyberpunk novel.
Crypto cults are technology based, so it strokes the ego of cultists already in technology fields: they're superior because of their existing skills and expertise.
Finally, crypto trading has indeed made some people quite rich, and they're happy to evangelize. Doing so works for Amway and other "don't call it a pyramid" schemes, and the mass delusion of cryptocurrency doesn't even have a living board of directors to point to as the ultimate extractors of value.
I have seen some very smart acquaintances start talking about how bitcoin will replace the dollar or become the reserve currency of the world in just a few years.
It really does feel like a cult or something. It’s so far removed from reality I don’t know where to even begin.
Bitcoin and Ethereum are actually making people money so it's different than the average MLM experience, but that makes the fervor all the more intense. Then there's all the shitcoins out there that people have lost money on.
Goes back to holding index funds for 30 years.
Time will tell who was smart and who is crazy I suppose.
Lots of those people have absurd amounts of money now. But I simply couldn’t live in imaginary world every day just to make money. It repulses me.
What’s that got to do with a clinic for gambling addiction?