Here we go again with this crap...
This is not a crap but brutal truth. If Tether ever gets taken down, let's come back to this post.
BitConnect founder charged with orchestrating $2 billion Ponzi scheme
- Thread starter Pekelo
- Start date
This is not a crap but brutal truth. If Tether ever gets taken down, let's come back to this post.
It's because you've been conditioned to think that 1% is high APY when inflation is double digits per year
There's a lot of inefficiencies in the traditional finance. The fat greedy people at the top are all keeping the yields in the forms of bonuses and stock options and compensations
They are the ones keeping the 100's and thousands and even hundreds of thousands of % returns in private equity investments from the likes of Uber and ABNB and ZM and FB and when they release to the joe public, they dump it so retail investors lose their investments
For as long as I can remember, I used to think, how could someone lend someone else 500k to buy a house, take on all the risk, and only accept 3-4% per year as payment. This goes back to a time when a house wasn't an investment though, and renting houses out for cash flow wasn't really a thing yet. Then the market of course forever changed via FED policy.
But if we stop for a minute to think about the fundamentals, or what a reasonable interest rate is if the risk taken to lend money was real, if the government couldn't print money, if they had to balance their books, what would it be? Imagine if a stock price actually reflected the company's ability to earn a profit, and as a shareholder, you wanted to see a dividend every year because this is how you got paid, not expecting a 10x or higher return, which would of course never be possible if not for an inflationary world.
So ya, we are so far away from having any sense of what is fundamentally sound math with regards to finances and economics. I wonder what a world based on BTC would look like. Where governments had to either mine it, or tax citizens to get it, and budgets would be based on what they could reasonably collect and redistribute.
As a dumb analogy, our bodies kind of do this every day. We take in calories, store what we don't need, and rely on the stored fat for days where we don't eat enough. Our body size is a clear indicator of how well we balance our sense of greed and commitment to exercise. We can obviously only work within a certain threshold where not enough calories consumed and not enough storage means death. On the flip size, too much food consumption and not enough expenditure leads to obesity and eventual death as well.
All around us in nature, the physical world teaches us the limits. But with inflationary monetary policies, its simply amazing how even the sky isn't the limit of how far things can be pushed, until of course gravity does set in once again.
Thank you Noah!! You're much too kind but as you know I'm only repeating the information I learn from reading and listening to others
For example, Amazon the company is not a scam, but I'm not so sure about the stock or any company stock that does not pay a dividend
The eye-opener for me was that youtube piece between Caitlin Long and Raoul Pal where they discussed that when buying stocks, you do not really own the stock but intermediaries (plural form) own the actual stocks and what's at the broker per the statements are just a bunch of record settlements and squaring off balances
Why that matters as discussed in the video is that during a merger/acquisition where the last trading day occurs, the T+2 (or longer in the past) crates extra shares, because wall street knows they can cheat and create fake extra shares
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Here on ET, we're discussing the decentralized finance and the corresponding ecosystem of crypto assets
Not to pick on RedDuke, but it's like he's looking at a gift horse in the mouth when he says all crypto projects that offer 20% APY(/R), 100% APY(R) or 1000% APY(/R) are all scams
Since I showed pictures of Solidex rewards for providing certain tokens for liquidity pools, I'll give that as an example (I have no investment or deposits/liquidity pools setup for Solidex)
https://docs.solidexfinance.com/about/why
So here's a crypto project that is actively being implemented. There are 2 tokens that I saw they utilize SEX and Solid in the Solidex ecosystem
In TradFi, there would be an investment bank that will underwrite the issuance of those stocks, there would be early investors in fundraising rounds, there would be recruitment of power player management like CEO's, and other C-Suite executives, plus board of directors
In DeFi, we say f*ck them, we don't need them. All the values that those people would suck out of the stocks, we give them to the "crypto community"
But who gets those tokens? The devs must get some allocation, it's only fair
The bulk should be given to the people who support the project by risking capital, hence yield farmers or the ones depositing coins to be used for liquidity in the project, so buyers can buy tokens and sellers can sell their tokens to cash out
And because we eliminated a lot unnecessary freeloaders (see above in TradFi), the values to go around can be substantial in the form of high yields/rewards for the LP's/yield farmers
20% APR is quite low given the risks when depositing crypto assets in a project that may have a smart contract bug or other risks (ie. rug pull)
And this is just 1 example of a crypto defi project, there are many others, like collaterization of crypto values such as btc to be used for backing algorithmic stablecoins (i.e. Terra Luna UST) or my favorite and simple to understand borrowing/lending of crypto assets like in banks (i.e. AAVE)
And the the thing to remember as always is that we're removing inefficiencies in the TradFi, such as employees, buildings, executives, etc and replacing them with smart contract and blockchain technology that operate 24/7/365
I quite like her. Such a smart woman and humble.
Honestly, any company today that too advantage of the free money policies is almost a scam in my book. The ultra rich should have never been able to accumulate so much wealth, and without them, there wouldn't be unlimited VC funding to go around. All that this has done is eliminate the little guys who can't compete. A world of big corporations and mega government isn't going to be conducive to a happy life for the majority.
I think the argument can be made that this allowed for huge advances to our quality of life in a short time frame, but I would counter with, what's the rush? If it took another 50 years to get cell phone technology wide spread as an example, it would have just slowed the world down. Its not like we are in a rush to get anywhere, unless its a rush to destroy the planet. If progress came at a slower pace, it might have almost been better.
This is almost scary when you think about it. Decades ago, it was suggested that robots would do all the work and we will all enjoy our lives more. The opposite is clearly the case for the majority. But you aren't wrong with the above comment. As Jeff Booth says, technology is highly deflationary, but the current system is inflationary. How on earth do we get to the new system when the pressure to maintain the current system is so strong?
Its such a shame that I'm just a bit too late in jumping onto the crypto bandwagon, but its so obvious now where this is all heading. Its almost impossible for the average person to keep up, but if you don't, now is not the time to be sleeping at the wheel.
Speaking of Luna, its simply amazing to see the 100% climb in just over a week while so many other crypto's have barely done 30%. I saw it pumping early, but didn't add to my position as I've just been sitting on crypto losses and wanted to not add more crypto exposure just yet. The amazing thing is that because the lightbulb has gone off in my head, I'm hardly worried about the paper losses.
This year couldn't have gone any better with regards to major bullish crypto events like the Canadian Truckers and now Russia. I'm actually surprised that crypto hasn't pumped even more as a result of these huge events. If anything, that has me a bit worried because those two events should have been a wake up call for the general population, so why crypto hasn't exploded yet this year, I'm not sure.
Totally true, but its scary to think how this will be managed by the governments.
Most of the time, the risk is extremely low. Houses are as safe as houses.
If the borrower defaults then the lender gets the house (foreclosure/repossession). It's only if there's a big recession and property slump (like 2008) that the banks can get into trouble (negative equity).Anything that pays a high interest rate usually carries a high risk of default and, unlike houses, there's often no collateral. For example, there is good reason why, at various times, the likes of Argentinian/Turkish/Greek/Russian! government bonds paid a high yield. There was a high likelihood of not getting your capital back. Same applies to very poor quality junk bonds.
Now, if you're saying that this is the "old financial order" and it doesn't apply to crypto, then I can't help being sceptical about that.
One obvious risk with crypto "savings" accounts is that they are not covered by the FDIC in the US (FSCS in the UK). If the company goes bust, you could lose everything.
Anything yielding 20% has got to be high risk because, in order to generate such a yield, they must be lending to borrowers where there is a significant risk of default. No-one would borrow at over 20% if they could get cheaper financing from a traditional lender. In other words, this has got to be sub-prime type lending.
Anything yielding 20% has got to be high risk because, in order to generate such a yield, they must be lending to borrowers where there is a significant risk of default. No-one would borrow at over 20% if they could get cheaper financing from a traditional lender. In other words, this has got to be sub-prime type lending.
Exactly. End whomever is borrowing, they have to try to make at least 30% to make it worthy to borrow. There is no high yield without high risk. That just doesn't exist.
exactly. But in crypto world of endless tokens non of the logic applies.