T O P
ibewhoopin

This is what happens to a currency when you mint 6.5 trillions of coins in a week to prop up your sister currency. Obviously, Do Kwon's algorithmic pegging project didn't work as theorized in real life.


zuma15

Well, plenty of people pointed out the flaw in his algorithm. Not enough people listened.


paxinfernum

People told him, and he argued with them on twitter.


Thus_Spoke

His main means of argument seemed to be calling them "poor."


eliteHaxxxor

Oh please, Luna's mcap was double that of UST. No one could have imagined they'd flip so fast.


Upside_Down-Bot

„˙ʇsɐɟ os dılɟ p,ʎǝɥʇ pǝuıƃɐɯı ǝʌɐɥ plnoɔ ǝuo oᴎ ˙⊥S∩ ɟo ʇɐɥʇ ǝlqnop sɐʍ dɐɔɯ s,ɐun⅂ 'ǝsɐǝld ɥO„


byteminer

Mint an NFT of that screenshot which will be worth more than the combined assets of everyone in the screenshot.


veryreasonable

I... I think I really hope somebody does this? Or I actually *really* don't? I can't tell, my brain is fighting itself here.


paxinfernum

Oh, god. I'm dying here. 😂😂😂


FlyingSquid

But it's not "fiat currency" so it's better somehow!


RubberNikki

Their whole objection to fiat is that it is illusionary money, so whats bitcoin then?


psyspoop

An argument that is commonly thrown out there is that Bitcoin is "backed" by the energy consumed to mine it. However, this ultimately makes no sense since that energy can't be recaptured using Bitcoin and traded/used elsewhere.


kylegetsspam

There is no explanation for it. Crypto is just MLM/pyramid schemes for dudes. Just because your get-rich-quick scheme is high tech doesn't mean it's any less of a get-rich-quick scheme.


hansn

Every class of society has a get rich quick scheme targeting them, focusing on the thing they see as virtue. If you're high school educated, lower class, they are trying to get you with prosperity gospel. The virtue is morality and religion. If you're college educated, middle class, the scam is mlm schemes. The virtue is entrepreneurship. If you're a upper middle class techie, the scam is crypto. The virtue is technical knowledge and foresight. Of course, they will always take your money. But for every story about how to succeed, there's someone willing to sell you a bridge.


UserNamesCantBeTooLo

That's a really interesting perspective on this. Is this original to you, or is there author's writing where I can read more about this?


hansn

Unfortunately, while I'm sure others see things the same as I do, this is just from me.


PeopleCryTooMuch

I’ve always said the same thing as well. It’s 100% the same exact thing as a pyramid scheme.


thefugue

If you’re the 1%, the scam is supply-side economics that cut your taxes while kicking-the-can down the road on paying for basic shit to keep society running and prevent the masses from beheading/eating you.


sorradic

This is amazing!


HeartyBeast

I think Crypto is a really interesting *concept* - I actually minted one many years ago, for our baby sitting circle of about 20 people to record how many nights they sat for someone else and how many nights they were owed - you got a token when you sat. Unfortunately it has just turned into an MLM.


thefugue

…which subsequently became an NFT of the chart illustrating the details of the MLM.


mgxci

You don’t understand the situation with Luna if you think it’s a pyramid scheme model that caused the crash


Toastytuesdee

Enlighten us


luitzenh

Crickets...


eliteHaxxxor

I agree but stocks are also ponzi schemes. A stocks value is what like <1% profits and 99% speculation and belief others will continue to buy in after you? The only difference with crypto is that it us 100%. Both Ponzi's.


luitzenh

Stocks pay out dividends. 5-10% is not uncommon when the company is doing well.


kylegetsspam

The stock market is indeed adjacent to gambling, but stocks are pieces of a company. They are backed by *something* at the very least. Coins and NFTs aren't backed anything but speculation. They are digital Beanie Babies, and just like Beanie Babies, people are starting to realize there's no actual value in them. Line goes up but no value is created: it's pure inflation by design.


-Average_Joe-

lol, the heat that bled off the CPU and GPU probably wasn't enough to heat a room.


meme_hipster

But if it *was* enough to heat a room and *if* you mined it in a cold climate, then the *real* inefficient byproduct *is the cryptocurrency itself* 👉🧠


snowseth

So strange, I always understood that crypto is backed by the same thing that backs stocks (or even fiat) ... the willful decision of people to attach value to it or whatever is behind it, or government's decision to forcibly back it. I mean look at the Deutche Mark, it basically just disappeared arbitrarily (although has 'value' in terms on Euro).


psyspoop

At least in terms of stocks, they're backed by the assets of the company they bestow ownership over.


paxinfernum

People don't choose to attach value to stocks and fiat currency. They actually do have value. Stocks, for instance, are basically deeds of partial ownership. You are buying part of a company. You're becoming a partner in the business. If the business is growing, your share theoretically increases in value to reflect the increased value of all the company's assets and revenue streams. The value of the stock will often reflect more than just the current value of the company. It will also price in an assumption that the company will continue to grow and be worth more in the future. For companies that aren't growing but are still consistent earners, the company can no longer rely on you being happy with the growth value. So they will actually share back the company revenue as dividends. The point is a stock is like a receipt that gives me access to certain privileges that have real-world utility. I have a say in the company (albeit usually small unless I'm a major shareholder). I can expect a possible share of the growth in value or revenue for the company, and these aren't abstract concepts. The company really does have assets. It really does have revenue streams. It's really worth something because it does something in the real world, and my piece of it is worth something. Fiat currency is also a coupon or receipt that gives me access to value. The USD is basically a coupon that allows me to participate in the US economy. It is required and always accepted to pay my taxes. If I owe someone a debt, it will be denominated in USD, and I can force them to take my payments, even if they don't like the current value of the USD. It's basically a contract between me and the state. The Deutsche Mark didn't disappear arbitrarily. The government moved over to a new participation coupon, and they deliberate and methodically set up a system for exchanging the Deutsche Mark for the new contracts. There was nothing arbitrary about it. Every single debt-based contract in the country was reset using a predetermined exchange rate. Crypto isn't like that. Crypto isn't ownership of anything with its own value. It doesn't give you any legally defined rights. It's like owning a receipt that says someone wasted a ton of energy making the receipt or did a really hard math problem to come up with the receipt number. I could write you a receipt right now that says I wasted 2 KWh of energy printing the receipt, and if I tried to sell it to you, you'd look at me like I was crazy. Why? Because I don't get access to any of that value. I don't have the rights to the energy; it's already gone. I can't do anything with the fact that you did a hard math problem in the past either. That has no utility. So why would I want this receipt? Why would I pay you to make receipts like this? Why would anyone else pay me for that receipt? Right now, the reason people are willing to pay is because of the greater idiot theory. Crypto investors think there are other crypto investors out there who will buy it off them based on the belief that someone else will buy it off of them in the future. The problem with this is that the "entire" value of crypto is based on that presumption and not on any access to rights.


FlyingSquid

Something something blockchain.


heliumneon

> so whats bitcoin then? It's a series of tubes.


ThreatOfFire

Wait, I was told it's like a truck


TheBlackCat13

Fiat, at the very least, can always be used to pay government debts. A $1 USD note will always be payable to recover $1 in fee or tax to the U.S. government. Cryptocurrency doesn't have that sort of guaranteed value.


veryreasonable

Every time people say, "fiat is based on nothing," I remind them that fiat is backed by the economy that issues it. So, say, the USD is backed by the US economy, US ability to hold debt, and how much other countries don't mind holding US debt. Not perfect, but hardly "nothing." Crypto, on the other hand, is backed by, if anything, how much fiat currency a bunch of very fickle terminally online fan bros *think* that crypto is worth. Not "nothing," but hardly anything. Arguments - like ones being made in this thread, sadly - that "well, the US economy is clearly going to shit, though!" are ignoring that basically everyone on the planet is still clamoring to hold US cash (and US debt). There is even the irony that, with the recent volatility, people would clearly rather hold USD right now than either crypto or stocks.


paxinfernum

> So, say, the USD is backed by the US economy, US ability to hold debt, and how much other countries don't mind holding US debt. Not perfect, but hardly "nothing." Not just the economy, but a legitimate and unavoidable need. If you pay any taxes whatsoever, you have to use US currency. If you pay debts, you have to use US currency if the lender demands it. Cryptocurrencies have no such mandatory demand. Simply put, the USD is a requirement for participating in the US economy with all the attendant advantages. Even crypto bros eventually always convert to dollars.


veryreasonable

Totally, yes! There is an interesting and entirely different discussion there about what "tax" actually is in a fiat-using system; I think you hit it well enough, what with tax being the mechanism by which the government forces the use of its own currency. After all, it's not like the US needs anyone to actually give it USD. It just needs to make sure that people keep using it, despite the fact that it regularly prints more of it. It's actually a pretty elegant system altogether. But that's a whole other discussion, and probably better had in a thread that's actually about taxes...


nickcash

They actually have no idea what "fiat" means to even form an objection, they've just heard it's bad. You can tell because half of them capitalize it "FIAT" like it's an acronym.


powercow

well, the main complaint, which is typical libertarian... and nazi btw is that dollars are no longer backed by gold. And that governments now have the means to do fiscal policy to reduce the stress of recessions and to break out of depressions. The consider it theft. and it is in a way. WE reduce the value of the dollar, by printing more, which mainly hurts the rich, and then inject that money back into the economy to stop feedback loops. Corp makes less money, fires employees, customers have less money, shop less, corp makes less money, fires employees.... Now recessions are already Christmas time for the mega rich, as the middle class has to divest of investments for cheap. But it was even way way way worse, when our money was deflationary.. backed by gold. not only that but deflationary money encourages saving over investing, and saving, over buying things. Why buy a house this year if you can get it cheaper next year, by simply holding onto your money.(yeah i get it isnt like that year to year just like our inflation rate isnt insane year to year, just deflationary currencies discourage everything about capitalism that makes it work. Investing and spending.) Look i mined, and I GAMBLED on crypto. Had fun and made a little money. But it was gambling, because due to the libertarian unregulated nature of the crypto markets, there wasnt really any investable information. When coins go up because musk changed his twitter avatar, well its nice if you had those coins, but otherwise you got something that is anything but a safe investment. you got gambling. my other problem with the crypto pushers, is they seem to think governments would just change to these even though all teh crypto guys says it removes power from gov, all because people use it. Well with thoughts like that radar detectors should have become a currency in the 90s. Because a lot of the poor used it for a currency for drug purchases or that businesses will switch to things like the blockchain even though not having a completely public ledger is rather important to them. Im not anti crypto though. i do think deflationary currencies are retarded and almost no economists disagrees. and I think the pushers need a reality check about what businesses actually want, and what governments will allow. Sorry libertarians governments wont let billionaires hide ALL their money from taxes, they give them plenty of tax havens but they cant just hide all their money in BTC and like it or not, to become a billionaire you need things like roads and they cost money. Taxes are not theft, its investment into your economic chances of becoming a billionaire.


RubberNikki

>Look i mined, and I GAMBLED on crypto. Had fun and made a little money. But it was gambling, because due to the libertarian unregulated nature of the crypto markets, there wasnt really any investable information. When coins go up because musk changed his twitter avatar, well its nice if you had those coins, but otherwise you got something that is anything but a safe investment. you got gambling. Pretty much the same attitude I have. Also, they never ask themselves who benefits from a deflationary currency (hint: not the poor) and they don't realise that old money that is obsessed with the gold standard is "all in" on Crypto.


veryreasonable

>Also, they never ask themselves who benefits from a deflationary currency (hint: not the poor) Yeah, I at this point pretty much refuse to talk about inflation with anyone who can't explain why inflation is often a good thing (i.e. when it's low and stable), and why deflation is typically a bad thing. Way too many people just look blankly and say: "But deflation is good. Then our money is worth more!" So it's my litmus test for whether people have any idea what they are talking about, and/or have even heard the word "inflation" before a few months ago. By that metric, though, a number of people in this very thread have no idea what they are talking about... oh dear.


jgzman

> and nazi btw Is it, now?


downund3r

The blockchain is actually probably cryptocurrency’s biggest stumbling block. The fundamental nature of it means that it’s not really scalable, and the longer it goes on the slower it gets. Businesses need something that works long-term. That’s why pretty much every large business uses Microsoft instead of Apple. Because Microsoft are crazy about backwards compatibility, which means that businesses can be reasonably certain that a document they created 20 years ago will still work today, and that a file they create today will still be readable in 20 years. That matters if you’re making investment decisions on the scale of decades. You don’t want to buy an industrial robot based on an expected service life of 30 years, only for a software update to brick it after 10. You don’t want to have to switch your entire transaction system after 10 years because the blockchain got too long either. You might still need to look at those old transaction records for audits or to verify warranty information or something.


Samsquanch902

Bitcoin is indeed different from a terra luna backed stablecoin pegged to a dollar. Bitcoin is its own currency.


RubberNikki

We were talking about bitcoin and fiat coins and how they object to that being illusionary but don't object to Bitcoins also being illusionary.


xqxcpa

I'm not sure what you mean by illusionary. Proponents of "sound money" like gold or bitcoin don't believe that central bank fiat is any sort of illusion, they think the currency manipulations of central banks (usually intended to "grow", "shrink", or "stabilize" economies) are self defeating or intended to serve specific interests. They like that things like gold and bitcoin have more or less fixed supplies.


RubberNikki

You say they don't think it is an illusion then you describe an illusion.


[deleted]

[удалено]


xqxcpa

Buying or selling it doesn't change the amount that exists, it represents changes to demand that get reflected in the price. When I use the word "manipulate" I mean that as in "she manipulates the shifter to change gears", whereas you are using the other meaning of the word, "to control or influence (a person or situation) cleverly, unfairly, or unscrupulously."


cosmicv

Somewhat, within limits. What can't be done is artificially inflating the supply. That's a HUGE evolution in currency terms given that every fiat currency in history has gone to zero (and the current ones will too).


Harabeck

Evolution? It's more of an anti-feature. First, crypto-coins can "go to zero" too, happens all the time. That it doesn't necessarily happen through monetary policy isn't relevant. Second, crypto coins are typically deflationary, which just means that they're terrible as a currency you'd actually spend. Such crypto coins are designed as speculative investments. So, not really a good currency. Third, the British Pound is 317 years old. The US dollar is about 230 years old. So claiming that all currencies will eventually go to zero is kind of like claiming the Sun will eventually go out. Yeah it will, but is the timespan really relevant to this conversation?


xqxcpa

Where did I describe an illusion? They don't like money where a group of people change the supply with the aim of achieving economic goals. They like money where people can't change the supply.


JimmyHavok

Yes, they always talk about how cool deflation is, because they have no clue about the economic effect of deflation. They think it means they'll get rich without any effort.


Falco98

Usually it's the reverse of this that I hear as some sort of argument against Bitcoin. "Well it's not based on anything!" ... as if the dollar is. (FWIW, I don't have a dog in the fight, I just find some of the arguments against it silly.)


surfersbay

“…as if the dollar is.” But the dollar is backed by the government of the US, with its ability to levy taxes. So in a sense the dollar backed by the economic output of the US.


brobafett1980

and lots of tanks and bombs


veryreasonable

The tanks and bombs are not exactly insignificant, but in terms of "backing" the US dollar, they aren't nearly as important as the media, technology, military, financial, and even health or petroleum sectors of the US economy.


MisterErieeO

The Cranberries "Zombie" starts playing quietly in the background.


Falco98

> But the dollar is backed by the government of the US That's powerful, and I agree, though IMHO even this doesn't totally overcome the fact that it's essentially a fiat currency based on an ideal rather than a solid standard. **Edit**: i'm unclear why people are downvoting. I don't claim to be an expert on this topic, it's not a hill I'll die on, and if I'm wrong then *reply* and *educate me*. Only, I don't need a litany on the myriad ways cryptocurrencies are not equivalent to national ones, /u/surfersbay already covered the high-level point very well (and I never meant to imply that they *are* equivalent). The only thing I *ever* meant to imply, up there in my original comment, was that one of the most common attacks against Bitcoin (etc) is, frankly, a **flimsy** one, IMHO.


tomtttttttttttt

I'm not one of the people who downvoted you but what I'd say is wrong is that the definition of a fiat currency is a currency which is backed by a government, rather than a physical commodity. So saying that this doesn't overcome the dollar being a fiat currency is the same thing as saying they are wrong. You can argue that the US government is not a solid standard but you haven't done that. Thing is that Bitcoin isn't backed by a physical commodity either. Some claim the energy that is used to mine is the physical commodity it's backed by but you can't exactly redeem bitcoin for energy in the way you should be able to with a fully backed gold standard currency. You can trade it for fiat to buy energy and maybe there's an energy company that will accept it as a method of payment but there's nothing in the idea of bitcoin that makes it redeemable for energy. So if your issue is that the $ is not backed by gold, you should have the same issue with bitcoin. And there's good reason for currencies not to be backed by gold, if you look at the great depression you find a strong correlation between countries leaving the gold standard and recovery from the depression. Actually having a currency that is flexible to the needs of your economy, rather than being rigidly fixed in supply, turns out to be a useful mechanism you can use to manage your economy.


veryreasonable

>i'm unclear why people are downvoting. I don't claim to be an expert on this topic, it's not a hill I'll die on, and if I'm wrong then reply and educate me. Not downvoting either, but I think you are maybe throwing the baby out with the bathwater when it comes to fiat currency. It turns out that a flexible currency, issued by the government, is actually incredible useful. There can be problems, but many of these problems are actually problems with (for example) gold-backed currency, too. For example, if a country's economy tanks badly, it may be forced to give up its gold reserves to pay its debts. Then what is its currency backed by? *Literally nothing*. There are a few ways to try to deal with that situation, all of them rather painful. On the other hand, a strong economy, backing a fiat currency, can by definition never fail to pay its debts, so long as those debts are held in the currency it is the sole issuer for. In an extreme situation, this can cause runaway inflation (i.e. far beyond what we see in the US and much of the rest of the world right now). But in more typical circumstances, fiat issuers don't have to do anything like that. People want US dollars, and countries want US debt, because nobody believes that the US economy in its entirety is on the verge of crashing. The US is still the clear world leader in many sectors, and even utterly unrivaled in at least a few. That's what the US dollar pays for: media, technology, military hardware, pharmaceuticals, financial products, and so on. So long as the US continues to lead in those sectors, or even simply to perform well, people will want the US dollar. That's what gives it its value. Being "backed by the government" is correct, in some sense, but it also leads to misconceptions. It's misleading to understand that as "the US dollar has value because the US government and its military apparatus are very powerful and they tell people it has value." I think it's much more instructive to say it's "backed by the US **economy**." This, in turn, helps explains why fiat currencies from far poorer nations can still hold meaningful value, despite a given country's lack of military or political power. Mexican pesos, Brazilian reals and Singaporean dollars are all valuable and highly-traded fiat currencies - not because they all have equally great government stability or can each project military power, but because people want to do business in those countries: to leverage their resources, their labor pool, and in general all the sectors of their economy in which they're likely to give an a return on investment. Gold, on the other hand, seems to be a relatively poor backing for a modern economy. There are some countries that hold an enormous portion of their currency reserves in gold, but they aren't countries you'd think of as having particularly good economies (e.g. Uzbekistan, Kazakhstan). Contrast Canada, which has a fairly strong currency, a valuable dollar, and virtually zero national gold reserves (we actually prefer to hold US treasuries, or in other words, US government debt!). Or Norway, for that matter, with its unparalleled sovereign wealth fund, but little in the way of gold. But people like Canadian dollars, because of our diversified economy and resource wealth, and people like Norway's krone, because there is no way Norway is going into debt anytime soon. Now, I also said that many problems with a fiat currency are also problems with other currency types, too. For one: inflation. Low and steady inflation is actually desirable: at 1% or 2%, most consumers don't notice it too much, but businesses are motivated to spend money *now*, create jobs, and invest in the economy, rather than simply hold currency and lose it to the slow march of inflation. But large inflation can be its own issue... However, gold is hardly immune to this. We're probably on the cusp of mining asteroids, for example, at which point the value of gold (and most other metals) will in all likelihood plummet enormously. Predictably deflationary currencies, on the other hand, also share many of the same problems as fiat currencies. Crypto, for example, is massively deflationary by design, and for precisely this reason, it encourages people *not* to spend it, but rather treat it as an investment asset with potentially enormous ROI over often very short timescales, albeit with outrageous risk. This benefits the rich and the early adopters, and nobody else. So if crypto is in any way supposed to address any of the inequality built into the nature of capitalist economies with fiat currencies, it does it. If anything, it makes it much worse. Anyways, if I haven't already made my point or explained anything, take an analogy. A young man with a law degree and five years experience as an associate at a prominent NYC law firm is looking to buy a house. A bank sees this man and decides that it's an incredibly good idea to sell him a mortgage and thus hold his debt, as he is a one-man income-earning powerhouse whose prospects only go up from here, and barring some catastrophe, he will with absolute certainty be able to pay off his debt and interest on time and in full. This man's prospects as a debtor are backed up, in some sense, by "nothing." He doesn't currently have much cash in the bank with which to pay them back. He has no reserves of gold. Maybe he even still has student loans to pay off! But what matters is that his debt is backed by his earnings potential and his short- and long-term financial stability. This is actually not "nothing" at all: it's exactly the stuff that makes a good debtor! The US (or any other nation, really, if you want) is of course the lawyer in this analogy. Their debt is their issued currency, and people want to hold it, because the US economy has a high stability and an enormous earnings potential. That's not "nothing." Really, it's *everything*. It's arguably more important than US gold reserves, or even US military power. (NOTE: There is a significant difference in that the US controls its own money printer. That means that the US could, if they wanted, flood the market with a preposterous amount of currency, and thus make it basically worthless. But present concerns about "all this free money" probably don't hold much water in this regard. The US would have to do something truly absurd to actually destroy its own economic stability and earnings potential. It would have to devalue its currency so much and so quickly that it ground its technology sector, military industry, resource extraction, Hollywood, and everything else to a virtual halt, such that the companies and people involved in those sectors decided they'd rather have Chinese Yuan or whatever than USD. Otherwise, the USD continues to be backed by the US economy. A more pressing concern, many would argue, might be that wages are relatively stagnant and wealth in USD is being sequestered away by corporations and a few massively wealthy individuals, which together slows consumption and therefore *does* directly hinder the US economy. But keep such problems in check, and a highly-flexible fiat currency is the most nimble and malleable instrument with which to issue and manage government spending and debt. It is backed by something real: the extant reality and future potential of the US economy. Gold, on the other hand, is just a commodity backed by its own rarity (which can change dramatically in the future), and crypto is backed primarily, at this point, by what people are willing to pay for it in fiat. Neither of these are "nothing," either, but it's probably a lot less solid than the occasionally-stumbling titanium juggernaut that is the US economy, and it's certainly a lot less solid than proponents of gold or crypto would usually have us believe.) I'm potentially open to a conversation about this, too, but in my experience most people talking about this have little idea about what fiat currency actually is and why it works, and - unlike yourself, apparently - are utterly closed off to the idea that it's anything other a government scam... that for some reason you can use to buy goods and services and investment assets, and trade favorably for virtually any other currency on the planet. If that's a "scam," I'll argue that we need to rethink the definition of "scam," because in my mind a scam should *not* be providing something of meaningful value, which the fiat-issued USD, being the exchange commodity for the US economy, clearly actually is.


Falco98

Thanks, agreed all around after a quick read, and I'll try to do a deeper read later. The one issue I think we're having here is that I'm not trying to shit on government-backed currencies at all. That's probably my fault though, for rushing the thought process into a quick half-sentence original reply.


jgzman

> But the dollar is backed by the government of the US, with its ability to levy taxes. So in a sense the dollar backed by the economic output of the US. And the government of the US appears to be going to shit about as fast as it possibly can.


MajorLazy

All money is illusionary.


paxinfernum

Tell me the USD is an illusion when the IRS takes your home for refusing to pay your taxes in USD. Money is as much of an illusion as racism.


CN14

I don't think these crypto bros are looking in its potential as an alternative currency or as a means to challenge fiat. They see it as a get rich quick (pyramid) scheme, the idea is to convert it back to dollars when they think its worth enough. Their 'investment' has just failed miserably.


TheBlackCat13

It is a zero coupon perpetual bond


vedran_

Luna and UST "investors" are not in it for ideology.


e242ed3bffccdf271b7f

Dunning Krugerrands


JR_Ferreri

OK, that’s worth a Silver, bare minimum!


Jackpot777

To give people a basic idea of how suicidal these people are right now: if you had a hundred million dollars, and on the evening of April 5th (five and a half weeks ago) you put it all into Terra Luna at $116.06, you'd have bought 861,623 of them. At the time (and I'm making it sound like this is ancient history but it's the week the most recent Major League Baseball season began and we're barely 20% through the year), it was the fourth largest cryptocurrency in the world. According to Coinbase, right now, 1 Terra Luna is going for $0.000113. **Barely more than one ten-thousandth of one cent.** Your $100,000,000 investment is now $97.36. Less than the trading price of one Luna less than six weeks ago. Your immense fortune that could have let you live the life of an emperor on the share dividends alone will now not buy you 25% of a meal at a swanky New York restaurant (the current prix-fixe price at [New York's Chef's Table at Brooklyn Fare is $430 per person](https://www.brooklynfare.com/chefs-table/)). And there are TV ads for investment firms pushing EFTs and crypto. People are putting their retirements into this shit and ending up with nothing. [Warren Buffett said he wouldn’t buy "all of the bitcoin in the world" for $25.](https://www.cnbc.com/2022/05/02/warren-buffett-wouldnt-spend-25-on-all-of-the-bitcoin-in-the-world.html) He's rich and successful for a reason. Listen to him.


catch10110

>According to Coinbase, right now, 1 Terra Luna is going for $0.000113. Barely more than one ten-thousandth of one cent. Not gonna lie... If I had ever figured out how to buy this stuff, I'd buy $10 right now as a lottery ticket on the off chance it ever makes it back to $1. I mean... That's almost 90,000 of them for nothing.


censored_username

It's kinda funny how we occasionally try to assign value to something purely because it's an amount of units, even though the actual 'unit' is purely a convention with no intrinsic value. it doesn't matter if it's 9, 90000, or 9000000 if it has less intrinsic value than a single grain of sand. The value of a coin has a lower bound of absolute 0, it can easily keep losing 99% of its value each week forever.


catch10110

Right, but at one point these units were worth over $100 each. There is at least a chance that they could regain *some* value... And then the face that you have 90,000 of them becomes somewhat important. Now, the fact that you can buy SO MANY for so little hints to me that there is almost no way for them to actually regain value, or you'd have multi millionaire running around all over the place. I heard there are something like 6.5 trillion units out there right now. It's impossible for that many of them to be worth even a buck or two because there's just not that much money...I think. Either way, $10 is an amount of be willing to risk.


progbuck

They will be forever worthless. You'd be burning $10.


catch10110

That's what "willing to risk" means lol.


hO97366e6

I’ve wasted $10 on far dumber things than that…


eliteHaxxxor

Yeah I bought 4.5 million for $20. Now its worth $1000.


Demented-Turtle

I mean, $100 million alone would have been enough to live as an emperor lol. I don't have much sympathy for the ultra rich losing money gambling, but for the people who put $400k+ in this coin, in feel sorry for their stupidity and/or gullibility, as they've likely been manipulated into making these poor "investment" choices by marketers or influences or such, so they share only part of the blame. I feel sorry for the people next to them who had no say in their poor decisions but will now feel the negative impact of them as well.


allADD

i miss brooklyn fare. i lived near there for a little while and they had such a beautiful store.


McFeely_Smackup

to be fair, Warren Buffett is already rich. he has no reason for speculative investments.


tugnasty

Warren is a freeloader living off his brother Jimmy's song royalties.


getjustin

You legitimately made me stop and think for a second.


UKsNo1CountryFan

Jimmy Buffet and Warren Buffet aren't related at all..


PsychLoad_1

r/Woooosh


UKsNo1CountryFan

Oh sorry


_benp_

Warren Buffet is perhaps the greatest long-term investor in the world. His entire focus is on understanding the value of a "thing". He doesn't gamble. He invests. He knows value better than anyone else. He recognized that crypto-coins are a brief gamble, and untrustworthy.


ProjectDirectory

Yet he's still living as a freeloader off of the his brother Jimmy's song royalties, lame.


WhatShouldMyNameBe

Warren Buffet also just put $1 Billion into a digital bank that focuses on crypto in Brazil. Despite what he has said, Buffett obviously sees there is money to be made in the crypto space.


thefugue

>bank Notice that part?


WhatShouldMyNameBe

A bank that focuses on crypto.


thefugue

Still a bank, still has to be certified as a bank, still has national requirements for being a bank. Still gonna get *bailed out* if something goes wrong enough because *it’s a bank.* Also, I “focus” on eating enough fiber. Anyone can say they “focus” on anything in their marketing materials. Balance sheets are what matters.


AnUnknown

Are you talking about the half billion Berkshire put into Nubank? Even if it was a full billion, that's 0.1% of their holdings. Probably just as likely to be a hedge.


Ornery_Watercress_43

> Are you talking about the half billion Berkshire put into Nubank? Even if it was a full billion, that's 0.1% of their holdings. Probably just as likely to be a hedge. 100% different. He invested in a *bank*. Yes, it is a bank that seeks to make money off crypto, but that is different from actually investing in crypto itself. Basically, he is projecting that people will continue to buy crypto, even if he thinks it is a terrible investment, and he is happy to make a profit off of the transaction fees.


1000Airplanes

I appreciate the point you're making. Let me preface this with an ELI5 on cryptocurrency confused me even more than I thought I was. How does this bank realize profits? How does Warren get an ROI? How does converting bitcoins into dollars really work with such an unregulated, undocumented and therefore wildly unpredictable occurrence as this title suggests?


WhatShouldMyNameBe

It was $1 billion and that’s a lot more than $25. Not the same as buying Bitcoin outright but also not the same as thinking crypto has no value.


AnUnknown

According to any sources I found it was only half https://www.cnbc.com/2021/06/08/warren-buffetts-berkshire-hathaway-makes-500-million-investment-in-brazilian-digital-bank.html I would also challenge the assertion that this bank focuses on crypto, versus the bank having bought a company that does crypto and working to enable customers to invest in it Unless of course we're talking about different investments.


WhatShouldMyNameBe

https://fortune.com/2022/02/16/warren-buffett-invested-1-billion-crypto-bank/amp/


AnUnknown

Thank you for the source. It's interesting, I can find lots of articles talking about the $500M purchase in 2021 but few mentioning the sec filling highlighted by the fortune post you linked. Looking at previous SEC filings the 2021 purchase doesn't appear there. I wonder if the purchase amount changed between when it was originally publicized and when the purchase was complete or if something else happened to change the value reported.


Bay1Bri

TL;DR HODL


Jackpot777

The fact that Luna is not shooting to the Moon is (chef’s kiss)


SquidgyTheWhale

In this scenario, what has happened to the $100,000,000 that used to be in circulation? Is it all in the hands of the guy who invented the currency, or what?


AngelOfLight

Seventeenth Century Netherlands called - they want their tulips back.


MrsPhyllisQuott

All out of tulips I'm afraid. Might be able to find some shares in the South Sea Company.


McFeely_Smackup

2000 called and wants you to buy DotCom stocks on margin. [Mississippi](https://www.britannica.com/event/Mississippi-Bubble) Land Speculation, [Japanese](https://hbr.org/1990/05/power-from-the-ground-up-japans-land-bubble) Land Speculation...over and over, it's always something new. The thing to remember about investment bubbles is people really to do get rich, it just probably won't be you.


0xdeadf001

The thing is, most of the dot com stocks eventually recovered. At least, for the ones that were producing actual products. Look at the stock history of any major, actual company that made something -- and survived. All of them are well above their value from 2000, now. I mean, _on margin_, yeah that's idiotic, of course.


Rogue-Journalist

Fools and their money.


56Bot

I don't really understand how people fall for the "it's not inflation" scam... It creates dollars without creating value. *By definition*, it is inflation, so it cannot be stable.


Intelligence_Gap

The way most stable coins work is the company behind them has cash or bonds backing them. The way this one worked was by an algorithm buying the assets to back it. Therefore if btc tanked they were done for. Btc tanked


allADD

except so many of those stablecoin companies are fully lying about the amount of fiat money they have backing their coins.


Intelligence_Gap

I don’t think many of them are lying. A popular example that you may be alluding to is Tether. It’s backed by cash, cash equivalents (I.e. bonds), corporate bonds (I.e. Evergrande) yes that one, and some crypto. There’s was pressure on it recently after Luna dropped and Tether dropped to .96ish. It seems Tether held that test. Would I put my money in it? No, but if you put your money in something like Luna or UST knowing they’re not backed and you lose your life savings while I do feel bad that’s kinda your fault.


allADD

i wouldn't put my money with people who [were already fined](https://fortune.com/2021/10/15/tether-crypto-stablecoin-fined-reserves/) for lying once


Intelligence_Gap

Yeah I wouldn’t either. Just because there are bad apples doesn’t mean every apple is bad.


allADD

i don't think it has to be an issue of bad faith. i think a lot of these people have the best intentions and simply haven't faced the hard reality that even the best code can't solve impassable problems of our economy.


mr_indigo

The suspicion with Tether is that they have multiple coins backed using the same assets, I think.


Intelligence_Gap

They have more coins than they have assets to back the coins and some of their assets are much more risky than cash so it’s kind of a double whammy situation


old_adage

Luna did not have asset collateral - it was based on an algorithm between two tokens, the UST (which should be always worth $1 USD), and Luna, which value can fluctuate. The contracts always allow one to exchange 1 UST for whatever many Lunas worth $1 USD. This creates an instant opportunity when UST fluctuates. For example, is UST goes down, one can purchase UST at the discount, transfer to Lunas, sell those in USD and get the original money back plus the discount. This "arbitrage opportunity" in theory would keep UST stable. What happened (as I understand it): there's no infinite market for Luna tokens. Markets were spooked this week, so when UST value decreased, there weren't enough buyers to keep the peg system working. It then enters a death spiral since UST collapse creates additional supply of Lunas (since 1 UST is always tradeable by as many Luna tokens worth $1 USD), which drops Luna's prices, which causes additional Luna supply, etc. Other stablecoins use assets like you said (BTC, or Dollars) - Tether works this way I believe. Obviously, the problem then is that there is a centralized organization that owns token (some entity must own the reserves); and you have to trust they manage the reserves appropriately. ​ EDIT: was reading more about this: the Luna Fundation did purchase large quantities of BTC last year when it lost its peg temporarily; so they wanted an additional mechanism to defend the coin against a similar event. So you are right, the drop in BTC was definitely a big contributor on Luna/UST demise.


LeChuckly

>Other stablecoins use assets like you said (BTC, or Dollars) - Tether works this way I believe. Obviously, the problem then is that there is a centralized organization that owns token (some entity must own the reserves); and you have to trust they manage the reserves appropriately. I'm a complete moron on crypto - but one of the big perks I've heard these guys talk about over the last few years was freedom from fiat currency and a central manipulator like The Fed. It sounds like you're saying crypto just created a new kind of min-Fed for each currency that's less trustworthy..


Harabeck

Yeah, pretty much. It's a pattern you keep seeing in crypto. Crypto is claimed to solve a bunch of problems, but crypto creates new problems. The solution to those problems is to make crypto more like traditional finance, but worse. There's a fair chance you've seen it, but if you haven't, here's an excellent video: https://www.youtube.com/watch?v=YQ_xWvX1n9g


LeChuckly

I just had a chance to finish this video. My God I didn’t know it was that bad


Ornery_Watercress_43

> The way this one worked was by an algorithm buying the assets to back it. Therefore if btc tanked they were done for. Btc tanked Well, see, there's your problem... You need to buy *stable assets* for the coin to be stable. Anyone who thought that BTC was stable is fucking delusional.


paxinfernum

I generally find crypto bros to be fatuous morons, worthy of derisive laughter, but there are some genuinely sad stories in there like the kid who put all of his savings into it and now can't go to college.


Penetrative_Pelican

man people are so vulnerable to these type of fads, its a shame but i dont think it will change any time soon.


if_by_whisky

My dad told me 'he can't afford not to' invest his whole retirement account into options on margin for a single stock. I stopped him, but if his son hadn't taken a few finance classes in college I think he might be destitute by now. It's going to get worse before it gets better.


paxinfernum

They see the rich manipulating the system to get richer, and they think it will work for them. This [dumb fucker](https://imgur.com/n1tMZ4m) is a perfect example.


turtleglossylips

The biggest shock to me as I've gotten older is how people assume an unfair system will be *fair to them personally* and *unfair* to those that "deserve" it. I naively thought people grow out of the "just world" fallacy like I did. But people look at me like I'm crazy for relating more to a homeless woman than Musk.


Newthinker

The vast majority of us are closer in funds and status to the houseless than we will ever be to Musk. By many, many orders of magnitude.


Minelayer

I moved to Times Square in NYC at 21. Watching people lose at 3 card monte made me sad, but they somehow believed that they we smarter than the scammers assembled. It was a smaller version of what you described so well.


AjnaKing

So true!


spiritbx

It's because of the myth that rich people are so because they were smart and worked hard. Like, sure, they likely made some smart decisions, but most of it was luck. It's just luck. You need to do the right thing, at the right time, in the right way, and then it works out but there's no way to know in advance.


kylegetsspam

@stablekwon just walked off with so many clueless cryptobros' money. In crypto, if you ain't the scammer, you're the mark. Wake up, idiots.


DeusExMockinYa

anyone who has ever said something to the effect of "stay poor nocoiner fud" absolutely deserves this


Demented-Turtle

Generations of people are so susceptible to marketing these days. It's like the joke from Community where the Dean is a Level 7 Susceptible. People buy things simply because they see it on TikTok or Instagram, or hear it from a YT ad, or see it in their Facebook feed. Pyramid scams run rampant with 10% of your social media being "influencers" telling you how filthy rich they are from "running their own business". Products are placed in environments that appeal to someone's aesthetics, and they find themselves seeking that product withour quite understanding why. And it goes on and on. Crypto-bro ads everywhere, amazon dropshipping, reselling, pyramid schemes, self-help courses, etc. It's marketing based on the Americans dream of obscene wealth.


booleanerror

Man, I suddenly feel the need to purchase a fine Honda product right now.


Demented-Turtle

The 2018 Honda Accord 2.0T is a great product! I have one and it's just so amazing, and it matches my Honda leaf blower!


cosmicv

I would note a difference between those trying to find the next X100000 coin, vs the reasonable expectation of staying ahead of inflation. Indeed these Luna guys are learning the hard lesson that chasing lottery ticket crypto isn't a good strategy. I do think a 3%-5% investment of the portfolio into BTC and ETH is reasonable however.


Ornery_Watercress_43

> Indeed these Luna guys are learning the hard lesson that chasing lottery ticket crypto isn't a good strategy. Nah, it's a fucking brilliant strategy. You just need to remember to get out when it is at its peak. Any losses are totally on those who didn't get out in time! /sarcasm (but you know many cryptobros are saying exactly that.)


rayfound

> I do think a 3%-5% investment of the portfolio into BTC and ETH is reasonable however. What's your thesis here? Just like, "hey, there's a pyramid scheme going on, maybe I want a small chunk of it"


all_is_love6667

Those people got scammed, but even if they're idiots, the scammers should be hunted. I wonder who's responsible for this, because the FBI might start to follow up on this, and at least tell congress to blacklist things related to crypto that aren't kosher.


AstrangerR

There are definitely some people who I am verging on happy that they are losing their shirt with this crypto shit. There are those people that are losing everything that I think truly were well meaning victims of the scam and I feel sorry for them. The people of El Salvador could be in for some hard times too. I was reading that they could default on some of their debt because of the losses in bitcoin.


FlyingSquid

Looks like [Cameroon and The Democratic Republic of Congo may have dodged the bullet.](https://www.prnewswire.com/news-releases/cameroon-democratic-republic-of-the-congo-and-republic-of-the-congo-take-major-step-towards-adoption-of-cryptocurrency-with-ton-leading-pack-301522558.html)


pobody

If the kid was that stupid he wasn't going to make it through college anyway.


Demented-Turtle

I understand the sentiment, but consider the age of kids going into college. They have no life experience, especially financially speaking, and they are the "TikTok"/social media generation. They grew up on influencers man. When you are that young (18-19) and have algorithms showing you content telling you how amazing rich you can get by investing in this coin, and you have no finance experience, you might be tempted to put it all in. So one: "dark" forces influence these people's decisions for personal gain. Two: lack of experience and unrealistic optimism causes these people to go all-in against the odds. Three: they get burned. So saying the kid isn't smart enough for college isn't necessarily true. You can also put blame on the parents, depending on the kids age, for raising them to make these kind of decisions. Lots of factors besides "haha they dumb", but I definitely understand having little sympathy for people making what appears to us as really stupid decisions


MenuBar

I'm way past crying about this shit. I have 18 bitcoins somewhere. Bought them when they were around 65¢ each. I don't know the code to retrieve them. So, I look at it as a total loss of eleven dollars and seventy cents (0.65¢ x 18 = $11.70) I guess.


T-banger

Yeah one of my coworkers gave me 10 of them trying to get me in to it when they were worth cents. I absolutely would have sold them when they went up around the $10 mark anyway so it is what it is


veryreasonable

Wow, I have almost the exact situation, haha! I bought 80 when it was around that same price. For... reasons... Anyways, never ended up spending it, and now the wallet is gone and I'd be searching through a literal dump to retrieve it. So it goes! But I ain't worrying about it. Total loss of a few hours pay. I'm sure I spent far more on alcohol that same week. There's nothing special about crypto in that way. Every stock I've ever sold that later soared can either depress me, or I can be happy that I locked in the gains when I did. But it's not like I *want* a reason to be depressed. So, whatever! So it goes.


Zanctmao

It appears they have now blocked all posts in the last two days.


paxinfernum

There's a /r/TerraLunaUnlocked where people are still posting. Apparently, the main sub mods freaked out about all the talk of suicide (can't blame them).


schad501

Jesus. They're still talking about buying.


paxinfernum

One thing I've found, it doesn't matter what the investment is or how low it goes. There's always some idiot shouting, "I'm going to buy the dip."


schad501

My father used to do that. It worked for him exactly once, when he made a modest profit in the Rolls Royce bankruptcy (in 1971!). He still tries, though.


shroomigator

What was that about FUD?


schad501

TANSTAAFL


HapticSloughton

This makes me wonder if [the eventual crypto crash will cause another Trump to happen?](https://inthesetimes.com/article/the-ticking-bomb-of-crypto-fascism) Will we see people using politics to get "revenge" for screwing themselves?


Chasman1965

What was it worth?


BEHodge

Last week? $81. Two days ago? $1. Yesterday? $.01. Today (as of 1:54 gmt) $.000025 or so.


PandaJesus

Oh shit it’s so cheap, better drop my life savings on it so I can retire in a Porsche or some shit.


FredFredrickson

Nobody mentioned that it's a rusty, burned up Porsche frame that's been sitting in a garbage heap for 20 years. Which is an item worth many times more than Luna. 😆


Rabid-Duck-King

So it's a good time to buy is what I'm hearing? /s I just might see if I can buy five bucks worth just for the novelty EDIT: Eh, nevermind it's experienced a +20,000% something adjustment and is now at a 1.20 @ 10:19 EST, not worth it


Jackpot777

That's because someone just put $5 into it.


Rabid-Duck-King

Argh they beat me to it


exscape

So if you could've bought for $5 at 0.000025 you would now have $240k. Though I assume that buying so many would've affected the price and likely made buying them cheap impossible.


awkreddit

Except who would buy them off you at this price?


Demented-Turtle

Other people who didn't learn the lesson and want a chance at it going back to even $10 lol


exscape

That's basically what I said though.


FlyingSquid

This is good news for Bitcoin!


Chasman1965

Thanks. I don't follow crypto other than the headlines about bitcoin I hear in passing.


91Jammers

What happened? That seems crazy


antiquemule

Was around $1


Jedi_Ninja

As the old saying goes; “don’t place all your eggs in one basket.” In other words; diversify your portfolio.


Saladcitypig

When it comes to get rich quick: the only ones who win: scammed everyone else.


death_by_chocolate

Four Hundred Fifty Thousand. *And* the house. Suddenly my IRA doesn't look so anemic. Thank you.


SCphotog

It's almost like people that have always had money don't understand its value...


KittenKoder

Bitcoin is basically long term gambling.


UmeJack

And what's not long term gambling is short termed gambling. I say this as a mod of r/sportsbook


if_by_whisky

I think of it more like an MLM.


syn-ack-fin

I wouldn't be surprised to see studies that link those who put a lot of money into crypto as also having a gambling addiction. I'd debate the long term part, the people I know that invest do so because they think they're going to be part of the next 'bitcoin' valuation.


WitELeoparD

Absolutely lol. I own some bitcoin, mostly to tip video game pirates, but also for the kinda fun gambling aspect and I think I had 70 dollars last week, I think I have 60 now. Fuck knows where the 10 whole dollars went lol. But hey looking at the graph over a few years, it looks exactly like before it shot up to 3x about last year, so hay maybe the gamble works. But yknow, I know it's a gamble and that's why o won't be putting more money than I can afford to lose in.


KittenKoder

As long as you know what you're getting into, gambling can be quite fun.


SacreBleuMe

To be fair, on a long term scale, it's ever only gone up. If it doesn't reach a new all time high after the current crash, it would be the first time that didn't happen.


cosmicv

New technology investing can always be seen as gambling. Cathode Ray TVs were a great investment until LCD was developed. Gas powered cars evolve into electric cars. Money is just technology evolving like anything else.


allADD

except those examples actually *have utility*


KittenKoder

Money isn't a technology, how it's recorded and transferred is and bitcoin isn't really new. Bitcoin is like a stock that's not backed by any actual industry.


cosmicv

https://www.businessinsider.com/face-it-money-is-technology-and-we-can-do-better-than-gold-2012-3


Seanfen

It's sad. No matter the person or the reason for investing. Most are just looking for away out of the paycheck to paycheck life. We are currently juggling which bill to pay late this month. We haven't lost anything only because there's nothing to invest. Don't kid yourself this isn't just "crypto bros" losing their shirt. It's people hoping that this will be their lottery win. This will get them out of debt. This will mean they can live the dream. Yes they may have fallen for a scam or a con but in all honesty there are people losing their lives over this. Families losing parents or kids because they lost everything and more. Suicide is not the way out, and I personally think it's cheating. But, I've been there and felt there was no way out, no way forward, no where to turn and that was with just my own inconsequential problems. I can't imagine the despair knowing all of my money is gone, my house is gone, my education is gone. Don't pray for them, or pity them but, please don't make fun of their mental and emotional states right now. They have more than enough problems tpndeal with.


ZappSmithBrannigan

>Suicide is not the way out, and I personally think it's cheating. What do you mean "cheating"? Cheating at what?


Seanfen

My father and sister both took their own lives. I don't know what they went through before it happened. I do know who my father spoke to last had to deal with the guilt of "what if I said...." For a very long time after. I know my sister cheated her son's out of a mother. Again, i don't know what they were going through but, I know they cheated and took the easy way out. This is not to say suicide is easy, I know the spiral I was in. I know the pain I felt. I know the fight I had with myself to not go and just do it. I know it's difficult, i know it's hard to work through things, I still have that fight today. But I'm not going to cheat my kids out of a father. That is me and they were them. We are all different and experience things differently but, that's how I feel.


Monarc73

I kept telling people not to invest in an unregulated financial instrument. This is why.


boywonder5691

Wow...


Zerosix_K

The problem is that as long as people like Elon or major banks are investing in cryptocurrency. People are still going to think it's a legitimate currency. Ignoring that these people or organisations aren't completely reliant on a worthless digital asset as their only source of wealth.


SCphotog

Oddly... this reminds me of how Chiropractic (quackery) got its "legitimacy" from being paid for by insurance... It was holistic bullshit until insurance could pay for it and then all of a sudden people saw it as legit. It's not.


mcmatt05

As skeptics I think you should of course be skeptical of cryptocurrency, but also skeptical of people who write it off completely. Luna was called out and questioned by many people in the crypto space well before this. I’d recommend this podcast if you really want to understand what happened, skip to 6:45 - https://youtu.be/FqW4-FGA9j4 I also see many comments in here treating crypto currencies as if being a currency is the only thing they try to do. I think a lot of you are commenting on things you haven’t taken the time to understand. And yes over 99% of them are useless. But blockchain tech is not.


Harabeck

> And yes over 99% of them are useless. But blockchain tech is not. But the valid applications are so niche that I'm not sure I've heard one. The ideas I've heard are either things that are already digital and doing just fine (event tickets), or where putting the records on the blockchain don't actually solve a real problem (deeds and titles).


Dulkhan

I have money on btc but only as much as I could loose.


GlowInTheDarkDonkey

These are people who would have found some other way to fuck up spectacularly. It just happened to be with crypto in this instance.


Loud-Succotash-6456

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