Hacker News new | past | comments | ask | show | jobs | submit login
Bitcoin Addiction Hospital (castlecraig.co.uk)
125 points by IndrekR 2 days ago | hide | past | favorite | 180 comments

It's been interesting to see bitcoin and blockchain migrate from tech infrastructure to the mainstream. I had a chat to an electrician recently who lost an apprentice because they wanted to go 'all in' on trading crypto. Electricians and other tradespeople are in short supply here in the UK and he just couldn't understand why someone would forgo a solid career for something so flakey. He felt he'd lost this apprentice to a cult. Just one anecdote but it's interesting how similar the furor of crypto is to that of religious dogma, with many people claiming prophetic foresight, and going all in on the dogma both to self-rationalize their risk-taking and for FOMO. There is, as well, a lot of economical turbulence in peoples' lives at the moment, meaning they're more likely to turn to gambling and risk-taking.

> He felt he'd lost this apprentice to a cult.

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.

My best friend was in a famous cult half his life. That's nothing like a cult.

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.

Your friend was in an organisation which (a) didn't recruit new members, (b) gave its members total freedom to do whatever they wanted, and (c) gave its members money? And you're calling this organisation a cult?

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.

I think you believe a "cult" only means a situation where people are held against their will by crazy religious nuts trying to assert their sovereignty. Those are the only examples the media wants you to know about.

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.

That's not a cult, then. Its just an odd religious community.

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.)

a cult in the pejorative sense is one in which members exhibit what used to be called "snapping," where the confluence of dogma internalization and pressure to resist out-group messaging effectively disables one's ability to question their in-group messaging.

"that's nothing like a cult" describes situation that is clearly fraud and actually nothing like a cult

Honestly it’s not; the legal definition of a religion is so loose in the US that you can literally have a religion based around being rich bringing you closer to happiness. It would be fully legal and sheltered from taxes under the law (you, however, would have to pay taxes on any distribution from the “church”).

There aren't any distributions if you don't personally own any assets or have any bank accounts -- the "church" pays for it all on your behalf. You also don't fit any legal definition of an employee either.

They sued the federal government decades ago for illegally collecting Social Security taxes and won. It's not fraud.

I don't think your friend's cult experience is the norm.

I believe it is the norm, but nobody talks about the ones that are operating successfully. You only hear about the ones that end in shootouts with the feds.

I would like to subscribe to your cult.

> rule of no proselytizing

> had about $50M split between 6 people near the end

.. are you sure that isn't just a tontine?

Sounds exactly like a tontine to me and I should know. (Founder of https://tontine.com)

That does sound similar except you'd have younger employed members making money to add to the pool of equity and also working on self sustainability like farming to feed the members. Not all members in the aforementioned org lived together past the 1970s or whatever; they often were sent to live and maintain on properties the org owned all around the world.

Yeaaaah this isn’t a cult. Though it’s interesting to learn my grandparents’ “home church” could scale that far. @.@

> famous cult

Can you please share the name?

based on description (famous, 100 years old, pooling financial assets but no proselytizing so it amounts to a tontine with a dualist story attached) sounds like the Shakers or some offshoot.

I think it also highlights the damage of a trend we’ve seen since the 1980s where even normal people see it as something of a failure if you’re not fabulously rich. That’s certainly not novel, of course, but I think it’s accelerated with widespread media representation of wealthy lifestyles as the goal and especially breezing past things like where people started from or whether they flamed out a few years later. There were a lot of different forms (“Bill Gates was a college dropout” fluff or the dotcom millionaires day-traders in the 90s - usually ignoring how many of these guys started wealthy, real estate speculation in the 2000s, the un-Christian beyond parody Prosperity Gospel, ongoing reduction of job security for many industries, etc.) but I think they’ve resulted in an unusually high percentage of people who have both a high expectation of what “normal” looks like and no realistic path to get there.

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 think this shows how bad society is nowdays. Instead of looking at jobs as a career, it now feels like being a slave to the job.

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?

Religion and superstition are terms that came to mind when I started walking there.

It's actually fascinating, neurologically, even if a bit morbidly so.

Gambling addiction does seem to be a modern problem; not just unregulated forex and options trading, and not just in bitcoin, but also gatcha games and good old fashioned sports betting.

Perhaps this is why Netflix Korean lethal gambling TV series Squid Game is so resonant in the West.

It's always been a problem. Religions and governments have historically banned or heavily regulated gambling, going back at least as far as Ancient Rome, Ancient China, and Ancient Egypt.

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?

The growing wealth inequality probably also produces more desperate people willing to risk it

It's not just desperation, wealth disparity has also contributed to the erosion of any value that used to be given to where the money comes from. The spectrum from speculation to gambling used be be linked to a certain kind of stigma (more so for straight up honest gambling, but also for speculation), these days it's more like "hard-earned? you got no-one to blame but yourself!"

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.

Do you believe there’s more wealth inequality in America today compared to medieval Europe or ancient Egypt?

There's surely more visible wealth inequality. A peasant villager would never visit the Royal Court, and if they did visit the local manor or landlord they would find one family with fine clothes and plenty of food who also went to Church on Sunday and suffered toothache and pissed in a pot under the bed at night.

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... )

There’s another key difference: say you were a peasant who did happen to live near, maybe even worked for the king, so you knew exactly what you were missing out on. Nobody told you that was a life option: quite the opposite, god had put you in your station and you’d be slapped down hard if you tried to change that. Your baseline for comparison was far closer: maybe apprenticing or marrying a child into a skilled trade, ending up in one of the coveted relatively stable service positions, etc. but nobody expected you to ascend too high.

Between the very top and bottom? Yes.


Do you believe the pareto distribution of resources/wealth has changed, or that the over-all growth in total wealth maintaining a similar pareto distribution results in the chart you posted?

I think that resources in stable system (for example peacetime) tend to be increasingly horded by successful competitors. When rent seeking from those at the top becomes too expensive there is sometimes a reset that is usually violent. Sometimes the reset (war or plague for example) can be from external sources, but is still violent.

This is how I would put it. Do you agree?

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.

Medieval peasants weren't told their place in life is a matter of personal responsibility (within reason), they were told the hereditary social hierarchy is divine will and can't be overcome. "Trading" is the ultimate example for the opposite, since it promises to directly translate "skill" into wealth.

Wealth inequality is an important factor but expecting everything to boil down to one simple factor is overly simplistic.

> Medieval peasants weren't told their place in life is a matter of personal responsibility

I assume wealth inequality is worse today than Ancient Egypt, but regardless of how it is, this point is key.

> "Trading" is the ultimate example for the opposite, since it promises to directly translate "skill" into wealth.

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!)

These days all of them have their perception permanently saturated with the lie that they had all the opportunity and just didn't take it. No surprise many are eager to jump at imagined opportunities whenever they arise. Gambling, speculation, falling victim to some "get rich by becoming a get rich mentor" mentors and so on.

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)

Who believes they had all the opportunity and just didn't take it? The zeitgeist appears to be there's no opportunity and it's someone else's fault.

What does that have to do with anything? People are only realistically able to compare with what they know during their lifetimes, and we're a very technologically and socially different society. Perhaps it might be more appropriate to compare 19th-century England or Tsarist Russia? Or, if we're going to restrict to what people actually know, the boomer childhood era?

(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... )

Why are you participating in a subthread about desperation and wealth inequality's influence on gambling and its reach back in history to at least Ancient Egypt?

Maybe this topic doesn't interest you.

Dude the wealthy today have their own personal space programs while the labor class can barely afford food and medicine. We have more wealth inequality than we ever have.

Estimates says a Pyramid took half a million man years to build. Assume modern wage of $50k a year, that would sum up wealth of a single pyramid to $25 billion if we translate those hours to modern wage hours.

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.

So you’re saying the situation where the pharaohs used slave labor to build the pyramids is analogous to the time we’re living in? On that we can agree.

At what point in history do you believe resource/wealth distribution began to follow the pareto distribution model?

Easy; the colonial era (so right around 1500). Movement of wealth before then was limited by zero-sum resource conflict and patriarchal inheritance of the nobility. But the new world opened up a way for noble second and third sons (who were trained and had the resources) to build their own fortunes if only they can be ruthless enough in seizing them.

What are your thoughts on the wealth distribution in Babylon between Hammurabi and his subjects? His reign was around 1700 BCE.

This has to be a key factor. Your average 20-something has terrible life-prospects. If they have a little political nous they will correctly deduce that their parent's generation stole their wealth and wellbeing (through a house price bubble, destruction of pensions, wages growing slower than inflation, climate crisis round the corner, student debt coupled with credential inflation, national debt, privatization, knee-capping of unions, a ruinously expensive military-industrial complex, etc etc).

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?

Those 20-somethings are strong proponents of at least half the things that are screwing them over.

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.

We now have forms of gambling in videos games for the last 5-10 years, a good way to teach kids from the beginning, that probably doesn't help either

I think the devastating problem today is that because investing and trading can be done responsibly, that all forms of investing and trading are ok even if it’s nothing more than gambling. People see a few success stories like DFV and it becomes a new American dream: get rich quick by shrewdly allocating a bit of capital.

But most people are just being fooled by randomness.

I can't find a meaningful distinction between gambling and investing.

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.


Ordinary investing tends to be positive expectancy and positive-sum. That is, there are economic reasons to expect stock prices to go up so both parties to a trade can gain instead of one making a gain equal to the other’s loss.

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.

It's not just about the instrument because you can gamble with stocks, which in general have positive expectancy and positive sum. Day trading meme stocks is definitely gambling, so I would say it also has to do with behavior.

I agree there is a big difference between day trading meme stocks and sticking your money in an MSCI World Index Fund or whatever.

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.

Trading is an activity with supply and demand for trading. It's behaving like any old business. You're offering a product to a customer (the investors).

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.

Well there is a meaningful difference between gambling and investing, but probably not between gambling and day-trading on limited information.

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).

> why the insurance industry isn’t usually called gambling

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".

Yeah, I think I'm just saying if you use a broad enough definition for gambling then everything in the world is gambling through a certain lens (i.e. Apple are gambling that a nuclear device doesn't get detonated in Cupertino).

It's a distinction of degree; is crossing the road gambling? Or is it an extreme sport given that it's a physical activity with a risk of death? No, that just renders the categories useless.

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.

quite a lot of forms of investing are pretty much gambling but one key distinction is that investing has a market function, it's a price discovery mechanism. Investors who lose in a market still serve a purpose. even if individual investors might incur losses at the very least there are external benefits to their behaviour for everyone else. Without active investing allocation of capital does not work. gambling taking place in purely isolated environments has no such benefit.

Picking successful long term investments is highly knowledge/conviction/skill based. Picking winners consistently is very doable for a good investor.

But that just further muddies the distinction between gambling and investing if you contrast with poker.

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.

A Random Walk Down Wallstreet illustrates it is luck. To claim it is skill is survivor bias.

That’s not quite right: that book is about consistently, significantly outperforming the market. That doesn’t mean that you can’t invest and see consistent solid returns, unlike gambling, but sets a ceiling on how much you can sustainably expect.

What is DFV?

DFV stands for /u/deepfuckingvalue a reddit user who became famous for his bullish investment on gamestop which resulted in him becoming a multi-millionaire.

You may know him from his part in the congress hearings regarding gamestop.


The person behind the Gamestop (GME) saga.

DeepFuckingValue is his username

It comes with the adrenalin rush. Similar addiction some have to extreme sports, or people who shoplift even when they have plenty of money.

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...)

Their cryptocurrency FAQ is comical at times:

> 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).

Seems like a good ELI5 (or 75) to me.

“IT experts” is a pretty generous description.

Seems reasonable. A lot of people involved in cryptocurrency seem to be trading way more often than is advisable when looking at the spreads (and thus exchange rake) involved. The exchange platforms certainly don't discourage extremely risky trading either, both by their interface design and by the level of leverage they offer. Finally, by providing it under the guise of "investing", which has a much better public image than "gambling", they provide it with a veneer of respectability. An ideal breeding ground for addicted behavior.

I was just discussing Bitcoin 'investing' with a client last week and one of his engineers overheard us and told us a friend of his (another fresh Lebanese immigrant) maxes out his credit cards on the first of the month buying bitcoin, then sells it on the last day of the month and pays off the credit card and pockets the difference. I just...had no response to that. It seemed so obviously dangerous and irresponsible that I couldn't believe a grown adult would do that.

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.

I mean sure, that's a bad idea if you're making directional bets (probably), but you could do the same with delta neutral yield/farming strategies and it wouldn't be a bad idea imo. When the APR on stablecoins is >30%, it definitely makes sense to borrow as much as you can.

When people try to convert me to Bitcoinology now I just smile and in my head I replace [shill token of the day] with “the ponies” as it saves me debating with them and we both get to leave with a smile on our face.

“[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.

The ponies analogy also brings to mind an old bit of folk wisdom: "You'll never meet a poor bookmaker"

Still true, but to be fair, Coinbase closed that first day lower. I don’t believe Coinbase has ever reached $381 again. It’s back at the $250 reference, even below that right now by a buck. Still a $55B company with an absolute insane profit margin right now.

Ah, thank you, I didn't realise that and I appreciate the correction :)

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.

Exchange fees are different from spreads (and, in US venues, much larger than spreads)

Do people really place 100% taker orders?

Yes, most people aren’t even aware of maker/taker structures or bid/offer spreads. Most people don’t really understand how markets work, especially in crypto which has self selected a lot of people who happily jump with both feet into something they don’t understand.

Castle Craig Hospital provides treatment for people addicted to trading, spread betting and the trading of cryptocurrencies such as Bitcoin, Ethereum, Ripple & Litecoin. We treat these as forms of gambling addiction.

Quite right too.

This needs to be in every hospital. I know so many potential patients. Just last week a coworker told me he considers people who don't believe in the future of crypto dumb. It's almost unimaginable to him that a smart person would refuse to buy into crypto.

It's the same type of people that would be hawking pyramid schemes two decades ago.

I do worry that the Great Filter for current Western society will be "too much of the country gets involved in pyramid-ish schemes" https://en.wikipedia.org/wiki/Albanian_Civil_War

(the 2008 mortgage crisis almost reached that level and has actually done long term damage to the political system!)

Yeah, the whole thing just has me thinking of the South Sea Bubble.

crypto-currencies in general, or blockchain/PoW implementations specifically?

That week he was hawking the Helium blockchain. Supposedly his nephew buys some expensive LoRa nodes so he will reap future rewards when more people will have such hardware. Now that's a pyramid scheme if I ever heard of one.

They're not healing bitcoin addiction but trading addiction. You can just buy bitcoin and hold it as store of value / investment.

That's a significant difference. And a misleading title IMO.

That is literally in the first sentence on the website: "Castle Craig Hospital provides treatment for people addicted to trading, spread betting and the trading of cryptocurrencies..."

I'm talking about HN title. The real problem here is trading addiction, not bitcoin itself.

This is a bit like saying "The real problem is drug addiction, not heroin. Heroin just seems to be especially good at causing drug addiction."

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.

So why don't we say the same about trading gold, currencies or stocks?

Curing addiction of stocks, gold or currencies sounds as stupid as curing addiction of bitcoin.

I see no difference in day trading stocks, bitcoin, or forex. If you buy with the intent to "beat the market" and hold for less than a month-year, I see it as the same as going to the casino and playing a slot machine.

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.

I also see no difference. What I meant is that the "trading" part is the problem, not a specific asset.

I'm old enough to remember the 2000-era of day traders, just as the internet took off and it was possible to enjoy the thrill of staring at a ticker from your own home. There was enough chaos that a minimum stake rule was made; https://www.finra.org/investors/learn-to-invest/advanced-inv...

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)

But the OP stated:

> 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.

This is a bit like saying "The real problem is drug addiction, not chemistry. Chemistry just seems to be especially good at causing drug addiction."

That's true tho, isn't it? Heroin also helped millions of people against pain without getting everyone addicted before we found better opiods for daily use. There are also people using heroin as party drug without high risk of addiction (even thought that may not be a lot)

Easy there big fellow. Bitcoin itself is certainly and undenyably a huge problem in and of itself, as you well know. Its horrible environmental impact is a huge problem, as are its effects on the mental health of the people who go online and shill it and rationalize it while ignoring and denying and marginalizing its environmental impact.

This finger pointing style of saving the planet feels so extremely juvenile, its no longer funny. Yes, bitcoin uses a lot of energy. But so does artificial snow. Or gaming for that matter. What would we see if we add up all gamers on the planet? All the VR and AR nonsense that is being developed and sold? We have chips, we have electricity. You will not regulate what people are going with these chips and that electricity. And wanting to do so makes you look pretty foolish.

And what you and awrence wrote is precisely what I meant by how Bitcoin shills and addicts ignore and deny and marginalize and whataboutify its environmental impact. Thank you two for such an unwittingly perfect and prompt illustration of my point.

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.

Even if true, I don't think calling another poster a shill (or addict) is a good tone - you could have just countered all those points without the smug "Thank you for unwittingly proving my point.";

> 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."

You made a straight up declaration about proof of work in a pretty condescending and unsubstantiated way. I literally applied your exact framing and wording to present that approach from my point of view, and you hated that version of exactly your text. I could reply it proves the exact same point about you. I think either of those versions are not helpful to anyone, which is what I was trying to illustrate.

Wrong. I am not defending Bitcoin. But I am opposing people like you who think they have some kind of monopoly telling other people what to use their silicon and electricity for. In fact, I couldn't care less about BTC. But I hate private police like you.

It also demonstrates a basic lack of understanding of how the energy markets work and how as just about the only intermittent buyer of last resort, proof of work is about to positively impact the energy infrastructure in a pretty substantial way and will probably converge on tapping into exclusively stranded / wasted energy (about 30% of energy production vs less than 0.1% of global production used by pow today). If anyone is genuinely interesting in educating themselves on the topic I'd recommend the two fairly recent episodes of What Bitcoin Did with guest Harry Sudock.

> It also demonstrates a basic lack of understanding of how the energy markets work

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.

Bitcoin mining is not a buyer of last resort, it's a capital asset that the owner wants to be run continuously in order to make back the capital expense, and produces no ultimately useful output.

It's a misconception to think a miner will only locate on energy sites with continuous supply. It can still make perfect sense for a miner to locate on a site with variable demand (which by the way is basically every energy production site in the world that is by design compelled to build to accommodate peak demand). What a miner will do is then negotiate energy costs (which are 80-90% of their variable costs) with the producer who is happy to sell his excess production at any cost above 0 for all excess power untapped. All it takes is enough excess production at a (much lower) price than conventional rates for this to breakeven positively vs full operation alternatives.

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.

Meanwhile, in the real world, bitcoin miners are buying coal plants to "mine" an imaginary mineral.


Wrong. Stop making false excuses and rationalizations and shilling for Bitcoin's Proof of Waste. Bitcoin is China's way of exporting coal through the atmosphere. Bitcoin shills also produce huge quantities of hot air and CO2 by endlessly repeating false claims like "Bitcoin doesn't run on coal".

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.

HN Discussion:


> What would we see if we add up all gamers on the planet?

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.

> What would we see if we add up all gamers on the planet?

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.

I think focusing on environment when it comes to cryptocurrencies is not very productive. We waste a lot of energy and if cryptocurrencies could live up to their promise maybe the energy cost is worth it.

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.

Easy there big fellow. The petrodollar is certainly and undenyably a huge problem in and of itself, as you well know. Its horrible environmental impact is a huge problem, as are its effects on the mental health of the people who go online and shill it and rationalize it while ignoring and denying and marginalizing its environmental impact.

> The petrodollar is certainly and undenyably a huge problem in and of itself, as you well know. Its horrible environmental impact is a huge problem

This isn't wrong, but this is also not an argument for bitcoin, it's an argument for Keynes' "bancor".

I agree it's not an argument for bitcoin. Whether bitcoin is a net positive environmentally or not is a different debate. 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.

> undenyably

People still own phones without spellcheck?

I agree, and I’m a long time HODLer, but most men friends of mine can’t handle the emotional roller coaster of just holding (I’m a guy as well). What’s interesting is that my female friends are perfectly capable of doing it…..they invested less money, but their patience easily makes up for investing less money originally.

How do you know it's higher patience rather than the lower stakes (wrt initial investment)?

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.

I’m talking to my friends. A male friend of mine started cocaine really hard when the BTC price crashed, another quarreling with his wife so much that their marriage failed. They are getting really depressed generally, as their self worth as the provider of their family is linked to their wealth.

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.

They're also treating Bitcoin Shilling and Hyping and Rationalization and Excuse Making Addiction.

You mis-spelled speculative tokens.

I once tried some binary options just for fun. Crypto were the worst tickers to bet on. At the same time crypto seems among the best assets for the classic "buy on lows, hold forever" strategy. Why does anybody bother betting/scalping on crypto?

I did it as well, but it was really a bad decision…..they are calling me from UK number with an Indian accent with ,,great investment possibilities’’ all the time and I can’t unsubscribe from their list.

I just change my phone number every couple of years and never answer unexpected calls. I've also done some research before choosing the platform and chose what was supposed to be the best. They never called me, they just email me regularly begging me to withdraw the funds I have left (but I just hate KYC passionately and don't want to bother uploading the documents they require). I wish there were a simple buttons to donate everything to charities.

By the way, didn't the UK come up with their analogue to the GDPR after leaving the EU?

I don't think they have touched it yet, so it should fall under their laws that they automatically took over into UK law (except the EU-level institutions of course)

I find it odd how so many of the comments here are attacking Bitcoin, other cryptocurrencies, day-trading, and other forms of gambling/speculation/investing.

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 feel more strongly than ever that trading should be strictly regulated and not permitted to the general population. It's framed as an equalizer, but it ends up moving more money from the middle to the upper class.

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.

This is one of the truest things I've read in this thread. Many people would feel differently if it were easy to visualise and see how much money is siphoned off from Main St to Wall St. Dumb money flows up to smart money. I've seen it from all angles while working in fintech.

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 only "smart money" is "other people's money".

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.

I don't quite follow. Are you claiming the norm for money managers like investment banks and hedge funds is to lose their customers' money? And those customers don't care?

I believe what it's referring to is that traders are paid regardless of how well the funds do. Actively managed funds have fees of say 3~7% of the portfolio that are paid regardless of how well it performs and this is the bet that Warren Buffet made and won (index funds performing better than hedge funds in the long run when fees are accounted for).

I would definitely agree with that claim, then. It seemed to me like he was making a far stronger claim, but it's very possible I'm wrong.

I was making a stronger claim. With bounded personal risk (i.e. the money lost is their clients, not their own), and unbounded potential for profit (i.e. a percentage of any profits), money managers have an incentive to make riskier bets.

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.

As long as a poor person can buy a 60k car on finance with 10k down, it would be hard to justify limiting that poor person from trading stocks with 5k and driving a 5k beater. And it would be even harder to justify this as something for their own good.

Maybe they shouldn't be able to buy that 60k car with credit card debt? If you're also proposing that the entire financial system needs to be redesigned to minimize leveraging and stop the insane focus on growth, I agree.

I think we would both be happy if people were taught financial literacy and responsibility. But to forbid people from trading, for me, reeks too much of the financial elite being scared they'll lose their underclass.

It might seem like elitisms, but how is it that the greatest wealth inequality in a generation is happening at the time when the highest percentage of the population is playing the market? The more money we put into zero-sum games, the more gets captured by the financial elite and by middlemen, and I think that's really the goal that should be set by regulation here (and that's why it probably won't happen anytime soon).

Always fascinating to me that people want to take away people’s liberties for their own good. Somehow, this authoritarian streak persists despite being the source of constant human suffering.

Some liberties have always been taken away in any society: you cannot kill or steal as you please for instance. There is always a need to figure out a good balance between personal liberties and the greater common good.

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.

What bailouts? Joe down the street declaring bankruptcy because he bet the house on the new shitcoin of the week does not affect me. His credit score being ruined is not my problem. You know what is my problem? Massive companies that can afford to lose it all getting bailouts from my tax dollars. I have no say in that. I'm not fucking giving up securities trading (something that people like John Bogle fought hard to give the layperson) because some people can't educate themselves.

I swear, some people here want to live in a nanny state.

When Joe down the street and a lot of his neighbours go bankrupt they default on their mortgage loans, which can have a cascading effect, as it actually did in 2008. The taxpayer that chose not to gamble in the stockmarket will foot most of that bill, part through inflation and part through actual bailouts and stimulus packages.

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.

How would you propose to regulate it out of interest? As someone who pretty much lives on investment these days (vanilla stocks, no crypto, no options) with no formal training in the area I'm quite keen to hear why I should have to return to the rat race. I wholeheartedly agree that maxing out credit cards to buy stock/crypto (as someone mentioned earlier) should be regulated however, as that just seems like an absolute ticking timebomb

There are solutions such as regulation for smoking that are incremental -- introduce the concept of a minimal bankroll and minimal accreditation and keep progressively increasing it over the years. The main thing would be an interest in regulating for general population wellbeing, instead of arguing for the rich becoming richer under the pretext of the free market.

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.

I get what you're saying, but in my mind with regulation like people are calling for, I wouldn't even have had the chance to make a living like that in the first place. To me, regulation means something like "you need a certification", "you need a degree in x", "you need to be registered as a company in y field" which are all larger barriers to entry into the field than trading fees, the potential of losing money in an unregulated market. I also feel it would do more harm than good to the economy (you're likely talking about the US, I'm from the UK, so can only comment on what I know really)..both in terms of people losing out on returns, and banks, investment firms, etc playing silly buggers behind closed doors

When I included the phrase “for their own good”, I intended it to have semantic non-phatic meaning indicating restrictions on liberty intended to protect the restricted individual. Protection against self harm has different moral bases than protection against harm from others.

Your comment addresses the latter. Unfortunately, that means it’s wholly non-sequitur.

> Somehow, this authoritarian streak persists despite being the source of constant human suffering

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".

A classic example is the prevention of the use of cannabis as an analgesic in palliative care.

Hmm, that's an example of authoritarianism?

Cannabis (might) have real implications on mental health, I'm not sure I agree.

Very true.

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.

Agree, this shift in attitude might be a response to how poorly paid regular jobs are and how unfair the system is -- in practice and in perception. It's hard to keep focused when all you see on social media is superficiality being rewarded.

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".

It's possible that gambling for profits or having a soul-crushing workaday job are both undesirable ways to live.

People have lost the optimism that working hard will get you ahead. The FI/RE community still has a modicum of that ethos, but they view hard work as a necessary nuisance that should be finished ASAP.

You don't need an edge over the smartest people in the world to beat the market. Some opportunities are too small for big players. Some are too risky (if you manage a safe rich/old people fund your goals are different than someone who wants to maximize the EV). Yet there are opportunities which a lot of people miss because of the bubble they are in (some obvious ones from recent years are AMD and Cloudflare). One way or another why not let people invest in what they believe in. Banning people from purchasing or selling equity in a business sounds extreme.

People should definitely be required to pass an investor knowledge test before they're allowed to invest. This is simple common sense.

Restricting shareholding to the upper class? Based

No, I meant banning speculating the stock market. Limiting the number of investments the average guy can make at 2 or 3 per year for instance, so they put into index funds or if they really care one special stock. If there were a will to stop the gambling I think ways could be found. The saddest thing is that the vocal majority is the middle class that is seeing good returns now, while never considering how the massive wealth transfer is affecting our society.

Or, you know, ensure people get a proper education.

One thing to keep in mind is that there's a fundamental difference between gambling and speculating on assets, cryptocurrency or otherwise. With gambling, the payout odds and real odds of a game are known, and you have to pay per play, which means a guaranteed loss rate. With speculation, no money is actually lost in the process, only when you've decided to end it, and "turns" do not have defined terms.

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.

Does anyone else see those excessive "crypto dudes" around in their social circle? They seem to eat, breath and excrete Bitcoins day in, day out.

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.

> I can't understand why otherwise intelligent people

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 do. Some anyway.

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.

When you think about it, the behavior isn't all that different from the way MLM converts act. MLM true believers would tell you it's the future of commerce or something and that it'll provide them financial independence or early retirement.

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.

* that's nice *

Goes back to holding index funds for 30 years.

Time will tell who was smart and who is crazy I suppose.

It seems almost like its always guys, and the way they talk sounds exactly like the Amway/Avon ladies that my mom was always around when I was a kid.

Agreed; especially surrounding the current NFT craze, I notice a lot of people I wouldn't expect to fall into it suddenly have weird monkey profile pictures (or some other thing that is totally different than the pictures they've had for years), and they start posting only about their particular flavor of crypto incessantly.

Why are so many NFTs ape-themed? Bored Ape Yacht Club, Evolved Apes, Degen(erate) Ape Academy...

Didn't the /r/wsb dudes start it with "aping into stonks together" or something?

I know a couple of dudes who are really into NFT. It really does come across as a cult-like culture with odd terminology and a half-baked understanding of the technology behind it.

I'd say over 90% of people who bought cryptocurrencies have at best a half-baked understanding of the technology behind it. OTOH, you could have no understanding of the tech inside microcomputers in the late 70's and still think it was a good investment, if you had an idea of its potential uses.

People who set their primary goal to making money and being on the crest of a wave often just can’t resist. I was invited on a call for a new crypto related project and talking to these people is so freaking strange. So many red flags and irrational reasoning, clearly driven by this desperate greed and fear of missing out.

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.

It strikes me that there is a link between mainstream popularity of crypto and the massive liquidity and artificially low interest rates. The smart players are using the transparency to do high frequency arbitrage. This is one of the rare instances where I think regulation is helpful.

There is a small percent of people susceptible to gambling and instead of helping them you 'solve' this problem by making the profits go to the government. Every engineer should feel embarassed by supporting this.

do you have money issues? yeah, unchecked consumerism is an addiction as well. how many people take on more work than they should but don't even get to enjoy the things they are working for? that's extremely unhealthy

I mean, OK?

What’s that got to do with a clinic for gambling addiction?

Rationalization and excuse making and attempting to make false equivalencies and whataboutisms to divert the argument away from Bitcoin's problems is another sign of shilling and gambling addiction.

Good. Makes sense. Much of the speculative narrative around bitcoin has been pure gambling and it resembles a cultish sickness.

Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact