Siam Commercial Bank moving into Crypto, why aren't you?

[Pravda]

43 minutes ago, Mr Meeseeks said:

Ethereum is way oversold at the moment. I'm slurping the dip. 

I'm not

[Yellowtail]

13 minutes ago, lkn said:

This is what we are saying...

False. What you have been saying is: "...everything won in crypto, someone else lost."

 

Saying someone else will/may lose is not the same as saying someone lost. 

 

Saying for "...everything won in crypto, someone else lost." is a lie. 

Saying "...everything won in crypto, someone will lose." could well be true. 

 

 

13 minutes ago, lkn said:

A zero-sum game does not look at a single transaction, it looks at the entire game, from start to finish.

I am not now nor have I ever said it was not a zero-sum game. 

 

13 minutes ago, lkn said:

And I think my amended definition of creating value was pretty good ???? 

Reconfiguring an example is not the same as defining something.

 

How does this website create value? I assume we would agree that it is entertaining, yes? At least for me, but for crypto it would be somewhat less entertaining, so at least in that sense it is creating value. 

 

13 minutes ago, lkn said:

And also, betting on sports, lotteries, casinos, etc. are also all zero-sum games. It is simply moving money from the many to the few, giving a cut to those arranging the game, but not creating any value. This is probably why gambling is either illegal or highly regulated in most jurisdictions, because it is an easy way to lure money away from people without providing them anything of value, other than maybe a dopamine rush.

I said ballgame, not betting on ballgames. 

 

But does a casino create value? The owners would say yes, the people that work there would say yes, the municipality that taxes it would say yes, many of the gamblers would say yes, many of the families of the gamblers would say no, many of the people that live near the casino would say no. Value is subjective. 

 

What is the crypto industry formally lying about to get people to buy it? 

[lkn]

30 minutes ago, Yellowtail said:

Saying someone else will/may lose is not the same as saying someone lost. 

This goes back to my Brooklyn Bridge example: I.e. do you lose your money when you buy something worthless, or when you find out that you cannot resell it.

 

This is rather pointless though, as we seem to be in agreement, you just don’t think our terminology is correct, because we talk in past tense, rather than future tense, but that is because we look at it in the abstract, i.e. in a zero-sum game, someone’s gain is another person’s loss, but that person may not have realized it yet. If you say “will be” or “is” doesn’t make any difference to me, and does not make my statement “a lie”, as you have postulated a handful of times.

 

33 minutes ago, Yellowtail said:

Reconfiguring an example is not the same as defining something.

It was a definition, taking inputs, such as labour, materials, time spent on training/education/transportation/storage, and produce an output, be it service or product, that someone need, but is unable to create themselves without spending more resources, than they would need to spend earning money to just buy it: That creates value for the buyer, as they get something they need cheaper, than it would cost them to make/do it themselves.

 

36 minutes ago, Yellowtail said:

How does this website create value? I assume we would agree that it is entertaining, yes?

It provides information that previously would be more difficult to obtain. E.g. in the past, I would have to buy a guide book to learn about things in Thailand, I would have to call up a bank and try to find a person that speaks English to answer my basic banking questions, etc.

 

So definitely there is a “product” here that would cost me more to create myself, without this website.

 

That said, you are right that it is probably more entertainment than true value, which is also why neither of us pay to use this website, because it doesn’t actually give us that much value.

 

40 minutes ago, Yellowtail said:

But does a casino create value? The owners would say yes, the people that work there would say yes, the municipality that taxes it would say yes, many of the gamblers would say yes, many of the families of the gamblers would say no, many of the people that live near the casino would say no. Value is subjective. 

This is where you are conflating things, as was also pointed out before.

 

Two things: Yes, a casino makes money for the owners. But you can run a zero-sum game and still earn a cut of this zero-sum game. The point about zero-sum game isn’t that no money is being made by any of the participants, the point is that money is simply being moved from one person to another. So if we are ten people going to a casino, we don‘t expect all ten of us to leave the casino with a profit, and the casino itself to run at a surplus.

 

But for crypto, which is also a zero-sum game, many crypto-proponents do think that we are all going to be rich form this. Take the person who started this thread, he claims investing in crypto is a no-brainer, cause it only goes up. It is in this context that we point out, that it is a zero-sum game, so everything you win, someone else lost, sorry, eventually someone else will lose. And this is where we also bring up the lack of value creation, because crypto-proponents also tend to say things like “it’s the same as stocks” (again, this thread has an example where someone called stocks a pyramid game), but a company with a business model does create value, so it increase the money for all investors, not just the first investors who resell their shares before it becomes worthless.

 

Penny stocks though are a zero-sum game, i.e. a company that doesn’t actually produce anything of value. There’s a long history of scams related to these, it’s basically your crypto-currency of yesterday.

 

The second thing conflated is the game itself and the ecosystem surrounding it. You are right that a baseball stadium / the leagues creates lots of value, if it was not clear, I never disputed that. This is a real business with lots of activity, we could go through each of them, but I digress.

 

As have also been said before, sure, there is an ecosystem around bitcoin and other crypto-currencies, and yes, these are real businesses and do create value. What I have been talking about is solely buying crypto and expect price to go up, not buying shares in a business that sells shovels to gold diggers.

 

56 minutes ago, Yellowtail said:

What is the crypto industry formally lying about to get people to buy it? 

I don’t think such statement has been made. There is a massive collective delusion, who fail to understand that, at best, it is a zero-sum game (but in reality, it is a negative sum game), and this delusion gets propagated by mainstream media like CNBC or the person who started this thread (who have dozen of threads talking up crypto as a sure investment), but that’s it, well, apart from all the fraud going on, see e.g. my comment above about Tether, but that is a lesser thing, because there will always be fraud, the problem right now is that people think that buying crypto is a good investment, and many people spend more than they can afford to lose, but mathematically the total sum of money gained from buying crypto will be less than the total sum “invested”.

 

This last statement though has often been disputed by crypto proponents, but no-one can explain how the sum gained can ever exceed the sum “invested” when crypto itself is a non-productive asset with no final consumer.

[FritsSikkink]

Another 200 million gone:  Bitmart Hacked; Estimated Loss Of $200M (tronweekly.com)

Who will cover that?

Edited January 7, 2022 by FritsSikkink

[fdsa]

It's just another rule of investing: never keep in online wallets more cryptocurrency than you could afford to lose.

[In Full Agreement]

On 1/5/2022 at 1:28 PM, Yellowtail said:

The same thing that drives value shifts in most every asset class, supply and demand. 

 

I think you're dancing around my question, really.     Suddenly supply, which is mostly static with BTC,  jumps or declines by $5K and you attribute that to supply or demand?      

[Yellowtail]

23 minutes ago, In Full Agreement said:

I think you're dancing around my question, really.

Really I am not. 

 

23 minutes ago, In Full Agreement said:

Suddenly supply, which is mostly static with BTC,  jumps or declines by $5K and you attribute that to supply or demand?

Supply is not static at all, that is ridiculous. 

[ThLT]

13 hours ago, Yellowtail said:

Dude might want to show a fuller graph of his chart showing sell-offs an recoveries as well, what's your point?

You misleadingly posted a 1 day graph of a stock, to show that it was doing well.
But the stock crashed -20% in the last 72 hours. ????

 

Edited January 7, 2022 by ThLT

[ThLT]

11 hours ago, Yellowtail said:

Saying for "...everything won in crypto, someone else lost." is a lie. 

Saying "...everything won in crypto, someone will lose." could well be true. 

Those two sentences are the same exact same point. ???? 
Has lost/will lose—the mechanism of how crypto works is still the same.

A zero-sum game. "Everything won in crypto, someone else has lost or will lose."

[Yellowtail]

7 hours ago, ThLT said:

You misleadingly posted a 1 day graph of a stock, to show that it was doing well.
But the stock crashed -20% in the last 72 hours. ????

 

Uhhh,  I thought I was showing the crash, sorry if that was not clear.

[Yellowtail]

7 hours ago, ThLT said:

Those two sentences are the same exact same point. ???? 
Has lost/will lose—the mechanism of how crypto works is still the same.

A zero-sum game. "Everything won in crypto, someone else has lost or will lose."

 

As I understand it, sentences are not points, they (sometimes) make points. I am starting to understand why you are having so much difficulty following along. 

[ThLT]

5 hours ago, Yellowtail said:

As I understand it, sentences are not points, they (sometimes) make points. I am starting to understand why you are having so much difficulty following along. 

We are only 3 people trying to explain 1 person (you) about basic finance principles. ????

Crypto doesn't create value—and it is zero-sum (negative-sum, rather). And what someone has won, someone has lost or will lose. That's where the extra money and profits come from (if not, where?!).

 

That you don't understand this doesn't make it false. Considering you are 1 out of 4 people who doesn't understand, or rather probably 1 out of the 20+ people in the thread who do understand basic finances. It just means you don't understand.

[lkn]

18 hours ago, Yellowtail said:

Supply is not static at all, that is ridiculous. 

You keep ignoring the actual question: What drives supply and demand?

 

It is meaningless to say that price is driven by supply and demand by itself.

 

For example higher demand for natural gas was driven by an unusually cold winter in Europe and China switching away from more polluting energy sources.

 

Lower supply of coffee was caused by drought in Brazil and that 2021 is an off year for the growers.

 

For bitcoin? Sure, price is driven by supply and demand, but we basically have infinite supply of crypto coins and blockchains (I can run my own, if I need one), and demand? Nobody actually need the coins for anything, they may need transactions but that demand would manifest itself in the mining fees, not in the price of the coins themselves. We can actually see this with ETH gas fees which are often quoted as costing $50 or more.

[Yellowtail]

12 minutes ago, ThLT said:

We are only 3 people trying to explain 1 person (you) about basic finance principles. ????

Crypto doesn't create value—and it is zero-sum (negative-sum, rather). And what someone has won, someone has lost or will lose. That's where the extra money and profits come from (if not, where?!).

 

That you don't understand this doesn't make it false. Considering you are 1 out of 4 people who doesn't understand, or rather probably 1 out of the 20+ people in the thread who do understand basic finances. It just means you don't understand.

Again, for at least the fifth time:

1. I never said it created value.

2. I never said it was not a zero-sum game.

3. I have understood all of this all along. 

 

You crack me up

[ThLT]

Just now, Yellowtail said:

Again, for at least the fifth time:

1. I never said it created value.

2. I never said it was not a zero-sum game.

3. I have understood all of this all along. 

 

Then what are you saying?

[Yellowtail]

14 minutes ago, lkn said:

You keep ignoring the actual question: What drives supply and demand?

 

It is meaningless to say that price is driven by supply and demand by itself.

 

For example higher demand for natural gas was driven by an unusually cold winter in Europe and China switching away from more polluting energy sources.

 

Lower supply of coffee was caused by drought in Brazil and that 2021 is an off year for the growers.

 

For bitcoin? Sure, price is driven by supply and demand, but we basically have infinite supply of crypto coins and blockchains (I can run my own, if I need one), and demand? Nobody actually need the coins for anything, they may need transactions but that demand would manifest itself in the mining fees, not in the price of the coins themselves. We can actually see this with ETH gas fees which are often quoted as costing $50 or more.

You claim that I am ignoring the actual question when I say supply and demand, and you then you later say it's driven by supply and demand, that's hilarious. 

 

There is nothing but supply and demand driving it.

 

People think it will make them rich, and they believe the supply is limited, an this drives demand. 

 

Why is that not clear? 

 

 

[Yellowtail]

7 minutes ago, ThLT said:

Then what are you saying?

Again, and please read what I have said over and over:

 

Saying for "...everything won in crypto, someone else lost." is a lie not true.

Saying "...everything won in crypto, someone will lose." could be true.

 

And no, these two sentences DO NOT mean the same thing, at least not to anyone who's primary language is English. 

 

 

[Bill97]

No need for it so why bother. Make big profits?  Sure, but a bridge.

[ThLT]

3 minutes ago, Yellowtail said:

Again, and please read what I have said over and over:

 

Saying for "...everything won in crypto, someone else lost." is a lie not true.

Saying "...everything won in crypto, someone will lose." could be true.

Okay then. So if you earn money from selling a crypto coin, and as you say, that "someone else has lost money is not true"—then where does that money from the profit come from? It appeared out of thin air? Please describe where that extra money came from.

[lkn]

28 minutes ago, Yellowtail said:

People think it will make them rich, and they believe the supply is limited, an this drives demand. 

 

Why is that not clear? 

OK, so no final consumer, no value, just speculative bubble. Seems we are then in agreement.

[lkn]

18 minutes ago, ThLT said:

Okay then. So if you earn money from selling a crypto coin […]

At this point, I think @Yellowtail is just trying to save face by arguing that “lost” and “will lose” are not the same thing. It seems he understands perfectly well that no value is being created, demand is driven solely by speculation about being able to resell to a greater fool, and that in the end, it is just a zero-sum game with those who cash out early making profits but those who are left holding the bag will have paid for all of this profit, and also the billions of dollars that it has cost to run the entire scam from start to finish.

[Yellowtail]

28 minutes ago, lkn said:

At this point, I think @Yellowtail is just trying to save face by arguing that “lost” and “will lose” are not the same thing. It seems he understands perfectly well that no value is being created, demand is driven solely by speculation about being able to resell to a greater fool, and that in the end, it is just a zero-sum game with those who cash out early making profits but those who are left holding the bag will have paid for all of this profit, and also the billions of dollars that it has cost to run the entire scam from start to finish.

False. while I have said all along that my issue was your use of the lost as opposed to will/could lose. I told you that clearly in my first response.

 

I do not agree that the bottom will fall out, and that the people left holding crypto will lose everything, but I do think it is very likely. It is possible that it goes on indefinitely.

 

And again, a lot of people have and are continuing to make a lot of money with it. 

 

 

 

 

 

[ThLT]

27 minutes ago, Yellowtail said:

And again, a lot of people have and are continuing to make a lot of money with it. 

 

You misleadingly (although unintentional) screenshoted a quote further in the text. Notice the "From a financial perspective"?

Here is your same source describing value creation (the definition/beginning of the text, not further in the text): 

 

Quote

Value creation is the primary aim of any business entity. Creating value for customers helps sell products and services, while creating value for shareholders, in the form of increases in stock price, insures the future availability of investment capital to fund operations. From a financial perspective, value

https://www.referenceforbusiness.com/management/Tr-Z/Value-Creation.html

By the way... sill waiting for a response from this post regarding what you have been saying from the start of the exchange.

 

Edited January 8, 2022 by ThLT

[lkn]

21 minutes ago, Yellowtail said:

I do not agree that the bottom will fall out, and that the people left holding crypto will lose everything, but I do think it is very likely. It is possible that it goes on indefinitely.

Many coins have already gone to zero. But I am also skeptical that all will go to zero, as we have also seen obvious scam coins go through several pump and dump phases. The supply of greater fools is almost infinite, but as it is not actually infinite, continuous growth is impossible.

 

The question is basically just how long this can be dragged out via wash trading, unbacked stable coins, staking schemes that keep people from cashing out, and people who will continue to be in denial, and still pour money into crypto, look e.g. at SafeMoon, it reached ATH in April of last year, but people still pour money into it, and the SafeMoon subreddit is full of optimistic people that try to talk up the coin.

 

And this goes back to what you seem to have a problem with. If I bought SafeMoon in April of last year, did I already lose my money, or are they first lost when I sell at a loss? My view is that when you buy something that has no value, you lose your money, but maybe you can recover some or all of your loss, by finding a greater fool. Though this part is irrelevant to the points that have been made.

 

Regarding going on indefinitely, there are several multi-level marketing companies that have existed for decades, e.g. Amway has existed for something like 50 years. If you look at their numbers, the median earnings among the top 10% is $4,402. That is pretty lousy, and that is top 10%, now imagine how much the bottom 90% make? Probably many of them lose money.

 

Amway is not a zero-sum game per se, so in that respect it is actually better than crypto, but crypto could end up being something like Amway, and probably already is, i.e. a few on the top make money, majority lose money, but for unknown reasons, they keep pouring money into crypto/Amway products.

[Yellowtail]

33 minutes ago, ThLT said:

You misleadingly (although unintentional) screenshoted a quote further in the text. Notice the "From a financial perspective"?

Here is your same source describing value creation (the definition/beginning of the text, not further in the text): 

 

https://www.referenceforbusiness.com/management/Tr-Z/Value-Creation.html

By the way... sill waiting for a response from this post regarding what you have been saying from the start of the exchange.

 

I thought I did answer it. The money comes from speculators. 

 

Where does a casino get it's money? 

 

When I sell a share of Apple and lose or make $20, where does that money go to or come from? 

 

When Apple goes up 10% in a week, what is making it more valuable? 

 

 

[ukrules]

All this talk of zero sum games, etc is irrelevant if the 'game' lasts a 1000 years.

 

The fiat money system has been around in one form or another since its origins around 1000 years ago when they ran out of metal and shells, I wonder how long that game will last for ????

 

How much are those shells worth now?

Edited January 8, 2022 by ukrules

[lkn]

30 minutes ago, Yellowtail said:

When I sell a share of Apple and lose or make $20, where does that money go to or come from? 

You are buying a share of Apple’s cashflow. The share price for Apple has historically been priced around 15 times earnings, but after they have entered services and shown that they can not just keep subscribers (guaranteed repeated revenue) but have also consistently grown it, investors are now willing to pay around 30 times earnings for a share of this cashflow, as they are now convinced that Apple is here to stay (15 times earning has always been a low valuation of Apple).

 

If Apple goes up 10% in a week (I don’t think that has actually happened, but let’s just assume) then it is generally because they showed much better earnings than expected, i.e. their cashflow increased, or possibly, that rumors/supply chain leaks indicate more demand than expected for their products, or even new products in the pipeline). There are also macroeconomic factors, e.g. initially we all thought that COVID-19 shutdown would cause people to stop buying Apple products, because all their stores had to close, and Apple also warned about not meeting their guidance wrt. earnings because of supply chain disruption in China, so the stock fell in price, because suddenly the cashflow we bought was expected to decrease. Of course once they started to release numbers for how much they actually sold during COVID-19, people saw that their cashflow had only increased (with record breaking sales), and so, the stock went up accordingly.

 

There is of course an element of speculation with certain stocks, e.g. if I buy Coca Cola, I pretty much know what their earnings will be, so their cashflow is pretty consistent, and so is their stock price, but if I buy Apple, I may expect them to introduce AR/VR googles or a car, and therefore I overpay for their share, compared to current earnings/cashflow, because I expect the cashflow to increase, and I know, once they actually have released the AR/VR googles and we can see how well they sell, it is too late to get a discount on this future cashflow.

 

Remember cashflow is what gives us earnings per share and what funds my quarterly dividend from holding Apple shares, or the share buybacks, that increase my ownership ratio in their cashflow.

 

Now, please explain to me what fundamentals cause Bitcoin to go up and down!

 

[lkn]

49 minutes ago, Yellowtail said:

Where does a casino get it's money? 

It takes a 3-5% cut of the zero-sum game going in in the casino (by giving you less than 50% odds of winning on all their games). The casino owners here are equivalent to the bitcoin miners, which also get a cut of all your transactions.

 

But notice that in a casino, you start by buying tokens that you use to gamble. These tokens keep their value throughout the game, while the casino owners get their 3-5% profit. And when you cash out, each token is worth the same as when you bought it.

 

52 minutes ago, Yellowtail said:

When I sell a share of Apple and lose or make $20, where does that money go to or come from? 

My other reply was a little long-winded: The profit comes because Apple has grown to a company with higher earnings.

 

Simpler example: I invest 100,000 baht in a noodle shop. After a year, the shop is making 75,000 baht a year. Would you buy this shop from me for 150,000 baht? Let’s assume yes, because you make back your money in two years. So where did my 50,000 baht profit come from? It came from the economic activity of the noodle shop.

 

You can view the 50,000 baht as a loan secured by the future economic activity of the noodle shop (its cashflow).

[Hamus Yaigh]

On 12/30/2021 at 10:52 AM, Neeranam said:

So it is hard for you to understand if you bought Bitcoin a year ago, you would be up 100%. 

If you bought it 12 years ago, you'd be up 600,000,000% and anywhere in between you would be well ahead.

 

Not exactly rocket science is it?

Not sure why this is in the business forum and not the jokes section? But to your ludicrous point, if you bought BTC at its ATH you'd be down 40% in less than 3 months. It has no intrinsic value, and is just based on the hope someone will pay more for it that you did. That's not rocket science either.

[lkn]

56 minutes ago, ukrules said:

All this talk of zero sum games, etc is irrelevant if the 'game' lasts a 1000 years.

Bernie Madoff ran a ponzi scheme for more than a decade. The point isn’t about how long it can run, it is about the lack of value being created, so on average, nobody is making any money with crypto, even though it can go on forever, we are just moving money from one person to another, and burning a lot of energy in the process.