A common theme I see with these articles is how "grueling" the work is. People need some perspective on what grueling work is. I worked at a UPS hub during college, where I'd load, unload, and sort the contents of trailers. What they do seems pretty easy compared to what I did at UPS. Picking and packing orders is a lot less grueling than unloading trailers full of 60 pound paper boxes, or loading hundreds of packages an hour into outbound trailers (where if you backed up too much you could shut down the entire line), or sorting over a thousand packages an hour. None of us ever complained that the work was too hard or grueling -- at best we just wanted another person in our trailer to split the load with and BS with. I honestly miss that work; it's just too bad I can't make as much doing that as working in tech.
Compare that to an Amazon fulfillment center, where from what I've seen they walk a lot to pick packages (but even that's being automated away by Kiva robots), put the contents into boxes, and load the boxes into trailers. Amazon packages are relatively light compared to most business shipments of stuff that went through UPS (which are usually things packed in bulk). Maybe it's mind-numbing, but the horror stories about how physically grueling it is (save for maybe when they weren't properly air conditioning the facilities) seem overboard. Even then, there were days in the summer where I'd be unloading a trailer that was baking in the sun all day, and we didn't get AC in there -- we just sweated it out and drank a lot of water.
I don't really know what people expect when they work in a warehouse. It's not glamorous and it's not easy, and it doesn't require that much skill so it doesn't command that much pay. But it's better than no job at all.
I think they aren't stating well what makes the work grueling. It's not about the weight of the items, it's about the systems amazon uses to grade/rate the workers.
I've worked plenty of menial jobs, and the ones that just killed me inside were the ones that had extremely strict rules that eliminated my agency as a human. Unloading bricks for landscaping work? Hard labor, but mentally fantastic and I was only judged on how hard the other workers thought I was working, which as a human is easy to pick up on socially. Working on a food assembly line where I was judged on my placement & speed of a repetitive physical action? Almost debilitating stress and exhaustion.
Combining menial work with piles of stress is what creates physically & psychologically draining work that a night of sleep wont recover you from.
I wish I could upvote this more as I think it's an important point. When evaluating quality of jobs (not matter blue collar or white), agency is one of the important points behind job satisfaction.
I don't think physical labor is a big deal -- indeed us computer-and-desk workers think a lot about how to stay active -- and I don't take that to be the crux of the article at all.
In fact, I'm surprised that none of the comments here have yet mentioned what I see as the worst, and tangibly different aspect of Amazon warehouse work: the gamification of the tasks.
> blue bars on the scanner count down the amount of time they have left to complete the task
> the company constantly sends messages to workers’ scanners telling them to work faster
> without warning, Amazon changed the amount of time workers had to stow an item from six minutes to four minutes and 12 seconds
This sound absolutely terrible. This would make any normal task stressful. The randomized changes and constant oversight strike me as borderline abuse/interrogation techniques. And while the article doesn't dig into it, I assume this is driven by AMZL software systems, operating on a global scale (using all workers and all warehouses as inputs), with machine-learning algorithms constantly tweaking the timers and count-down bars, and possibly even suggesting to managers "hey, worker A has slowed down in the past 15 minutes, would you like to send this pre-written message X to A? Tap [Yes] [No]". This sort of thing might sound like a brilliant idea to some rockstar developer in Seattle, and to the data science team, and the management team signing off, when in reality it creates a Hunger Games race-to-the-bottom mentality in your actual workforce.
And this is materially different from how Stater Brothers across the street operates (or any other warehouse job), presumably.
The biggest problem, I am willing to bet, is that the gamification and the parameter changes are being done by desk jockeys who have never worked the floor at one of these warehouses.
Also, if it’s anything like my experience at call centers, there are some workers who hit all the goals and receive just enough reward from the higher ups to be insufferable. I wouldn’t be surprised if that type of group psychology element is gamed by these work places.
They aren't making these moves out of ignorance, they have far too much data for that. Those desk jockeys' jobs are to maximize profits, and this strategy is working.
I've worked for UPS delivery before, a long time ago, though only briefly. I liked the physicality of it. I can't speak to an Amazon fulfillment center, but I will say this: stress isn't only about physical demands. I think many people would prefer pure physical exertion (within limits) to long-term stress about job security. I think medical professionals can back this up.
One more thing. Often people's argument around these issues seems to end with: "it's better than no job at all". We can frame the issues in more constructive ways, don't you think? We should aim to find ways to adjust the system to better achieve the goals we want: innovative technology, fast delivery, fair pay, good benefits, subject to the complexities of the world.
I think questioning this idea is the whole point of the article. It's a job, but does the job pay enough to improve the lot of the individual worker? Maybe that isn't fully obvious to the worker because they're worried about no job at all, but if the city of the business and residence of the workers isn't collectively benefiting, then maybe that's a hint that low-skill jobs don't pay enough. (Or are on a questionable edge).
Finally, if a business sets up with a portion of its employees earning subsistence wage, it's competition to other businesses which are more willing to pay better wages. These conditions are a potential drag on the progress of civilization if that's the case.
You can't work for a business which has been driven out of the market. And that is how markets can work for good, by selecting efficient businesses (but also bad - the market itself doesn't care), but if you look at businesses in the market, if they all race to subsistence wages then businesses willing to pay more can't operate and the city around the market declines. If the wages stay higher, the cost of goods are higher, but other opportunities rise, and the city as a whole can prosper. If the wages are way too high, then that can also be bad that can also cause a decline.
Right, but this doesn't seem to describe what happened here. Before Amazon moved in, people in San Bernadino weren't working for efficient businesses paying great wages; they just didn't work.
How long should we have kept them unemployed to wait for a new high-paying business to show up?
If we systematically select businesses that pay subsistence wages, the concern is that better employment may never show up, and the overall economy becomes more and more unstable over time. But it's hard to know for sure and that is one of many different outcomes.
But still it's not an area you want to move forward with no introspection.
Edit: If low-workers are paid such a low margin that they have no personal buffer for uncertainties such as automation in warehouses, then we also guarantee that the government ends up paying for that transition (or we get unrest and/or economic malaise). If they're paid a higher margin, the economy ends up more efficient at flexibility transitioning from changes like warehouses becoming fully automated. (because offset workers can make individual transition choices that that make local sense instead of trying to apply slowly responding gov't policy).
It doesn't paint the full picture to say this is a problem with Amazon or UPS or whatever...
The problem really seems to be lack of additional opportunity for people who are unable or unwilling (or not in good enough health) to perform hard labor.
The same kind of applies to other low-skilled minimum-wage jobs like food-service. There's not much opportunity, so you find mid-career people doing jobs that only require (and pay) at levels that are appropriate for highschool or college kids.
(Not criticizing your comment here just providing my own conclusion to your point)
I too worked at UPS during college. First as a loader and then as a part time supervisor managing loaders. I made about $1500 a month in the early 2000s for working about 20-30 hours a week. Not bad for a student.
What you describe is accurate, we use to get entire trucks of "Total Gym" boxes that weighed 70+ lbs each. Turn over was high and there was accountability similar to what I read in this article but with two key differences. Hourly workers at UPS were unionized and the carrot at the end of the stick seemed much more realistic as numerous guys were promoted to supervisors and drivers who could make 6 figures. I was promoted to my part time supervisor role after a couple of months in fact.
The thing with fulfillment center work is, you tend to do one specific job all the time. If you stow, pick, move carts around, move stuff from a cart onto a conveyor belt, you do that all day, every day, until you're told to do something else.
Even though many jobs might not be "grueling," at least in warehouses where the inventory tends to be lightweight, the repetition and requirement to meet rate will ensure that even relatively simple tasks can wear people out. Having to stand in one place for an entire shift, in the Kiva-enabled warehouses, can be more physically demanding on your lower back, knees and feet than the jobs that let you move around.
Disclaimer: I work at an Amazon delivery station and briefly worked at a FC prior.
From my experience the managers at my warehouse are very open to moving people around to fill different roles if you request it. This is obviously anecdotal but from my experience people tend to want to stick to one specific job rather than move around.
Fair enough, the logistics of different facilities might allow more leeway in some than others - but in the FC where I work now, they're not very flexible about moving people around unless immediate business needs and stow rates allow it (for indirect roles at least.)
Still, I don't think employees should have to ask at all - Amazon should regularly rotate their FC employees through various roles, even within a workday. Doing so would improve performance, attentiveness and morale across the board, reduce repetitive strain injuries, and give each employee an idea of how various roles interrelate.
I'm in compete agreement with you regarding moving people through different roles. This is actually what I've requested and now have varying duties on my different shifts, it makes the work much more enjoyable to me. With that being said I personally probably wouldn't enjoy being moved to different roles throughout one shift on a regular basis. I've had that happen to me before when we were short on staff and it can be more stressful.
Amazon does most of the loading, unloading, and sorting the contents of the their carriers' trailers because they've negotiated rate benefits in exchange for doing it themselves.
I've done both. You may think picking and packing orders is less grueling, but it's not. Pick rate and pack rate expectations are high enough to ensure they're not. I'd take truckloading any day of the week.
From the disposable contractor workforce engineered to prevent unionization, to the Taylorist micromanagement to the lousy pay, its a nasty business. Walmart seems like a benevolent force in comparison.
It’s not better than no job at all. It’s a race to the bottom that is putting people out of work and hurting the wretches working for them.
> Amazon measures everything. Their incentive compensation plans should be rewarding employees that exceed quota with daily bonuses.
I'm guessing you have never worked under the quota system. Guess what happens when one meets a quota? He or she gets a quota increased. Guess what happens when he or she no longer meets a new quota? He or she gets fired. In a quota based system the goal of every employee is to hit the quota on a nose
The job is mechanical, most of the grunts are temps and they don’t get sick days. You put you A team in a safer place, crank the volume and purge the rest.
I don't think it's the physical labor that is most complained about, it's the tyranny of the system. It seems like you're treated like a cog. The fact that many people quit after not very long is a strong indication of the poor work conditions.
The reason it doesn't command much pay is not because it doesn't require much skill. It's because either there are more people willing to do that job that doesn't require much skill, or there are fewer jobs available to those that don't have skills (in a given area).
>> there are more people willing to do that job that doesn't require much skill
There are more people able to do that job that doesn't require much skill. Additionally, for any given job (especially high-skill jobs), it also much more likely for able and unwilling people to become willing than it is for willing and unable people to become able.
Mine wasn't as taxing as that but I worked in a university textbook store receiving area one summer (usually in cafe or register during the school year). Just me and this much middle-aged guy that was usually down there on his on. We'd come in, he'd put on his gospel music and we'd get to it. The work went fast and it kept me in shape. Good times but not something to do forever.
If that's all you have to defend it with, then you have nothing to defend. People expect better of Amazon, as they should. The company turned the owner into the richest man on the planet; there is zero excuse for short changing the workers.
> If that's all you have to defend it with, then you have nothing to defend.
Sure. No problem. They'll just have no job. And you can continue to believe that.
> The company turned the owner into the richest man on the planet
Because of the value of his stock. NOT income from sales! Amazon does not have extra money from sales to raise wages with. Their retail business runs at a loss actually. Raising wages would make things even worse.
> there is zero excuse for short changing the workers.
That's not what short changing is. Short changing is not delivering what was promised.
There is no magic fairy that can go around giving people money, as you seem to think "just give them more money".
There's a reason we tell students to finish high school, and go to college or a trade school - to avoid these kinds of jobs.
You actually want to help them? Figure out how to give them more education. Complaining that Amazon is helping them, but "not enough" is worthless.
"Sure. No problem. They'll just have no job. And you can continue to believe that."
Ahh yes, the old, "You must lick the boots of your corporate masters for seeing to bless you with a few crumbs!" argument. It has never, ever held water.
"Amazon does not have extra money from sales to raise wages with."
That is a complete and utter lie.
"Their retail business runs at a loss actually. Raising wages would make things even worse."
The business as a whole, which is built on top of the retail business, is quite profitable. Them deciding to run retail at a loss does not change things.
"That's not what short changing is"
Yes, it is.
"There is no magic fairy that can go around giving people money, as you seem to think "just give them more money"."
Nobody is asking for a "magic fairy." They're pointing out that it's extremely unconscionable that the richest man in the world cannot afford to pay his workers a living wage.
"There's a reason we tell students to finish high school, and go to college or a trade school - to avoid these kinds of jobs."
And the people who don't have much choice should just go to hell? Seriously, what is it with this idea that people who weren't able to get an education, for whatever reason, don't deserve to be treated with dignity and respect?
>Because of the value of his stock. NOT income from sales! Amazon does not have extra money from sales to raise wages with. Their retail business runs at a loss actually. Raising wages would make things even worse.
The value of the stock is supposed to be a reflection of the value of the company. If their retail business is worthwhile even if running at a loss, than they could run at a larger loss with the only downside being the company's value dropping.
>You actually want to help them? Figure out how to give them more education. Complaining that Amazon is helping them, but "not enough" is worthless.
Better education takes more tax money, something Amazon has spent their entire history trying to avoid paying. And how many of them need better education before the necessary jobs at the warehouses get better conditions?
I bought my parents five Dots for Christmas to use as intercoms. They live on a farm, with multiple outbuildings, so if something happened, they can yell at the Echo in the building they are in for help. Any other use they get out of it (my dad uses the music feature a lot) is just an added bonus.
I've made about $110k profit this year in crypto on a $21k investment earlier this year, and I think this is all a giant bubble. I was at my parents' house for Thanksgiving and a commercial with Ron Paul talking about Bitcoin came on, which coincided with around the time it went to $10k, and it hit me really hard that this isn't going to last forever (and probably will hurt sooner rather than later). I liquidated everything and just entertain myself doing some day trading on GDAX. I don't hodl anymore.
The entire thing is absolutely stupid, and isn't going to last forever. People are way too bullish on it. People who have no business investing in it are taking on debt to do so, with no clear exit strategy other than "the moon." A lot of people who don't have any money are going to get absolutely toasted when the pendulum swings the other way. They're in it to get rich. They have no idea what blockchains are. They just think they're buying magic internet money people get rich from.
To put a little perspective on how ridiculous this all is: Last night after Coinbase came back from maintenance, there was the (expected) sell-off, so I figured I'd make a quick buck and bought 300 LTC for about $241 each, then sold it a few minutes later for $251 after the instant rebound and went to bed with a nice $3k profit. I woke up this morning and was astonished to see that LTC was about $380. This was in the course of about 5 hours. Had I not sold it last night, I would have made almost $40k. I'm a little annoyed about that, but again: this is a stupid, irrational bubble that makes absolutely no sense. It's entirely speculative.
I think crypto and blockchain has a future, but it has to solve a few problems first (transaction fees/time and anonymity). None of the big three currencies do that well enough yet. This bubble is going to pop soon and I'm worried that a lot of people are going to get impacted badly.
Even if it is a bubble, that doesn't mean it can't go another 20x from here, depending which crypto you put your money in.
There's cheap liquidity (ho ho ho said the FED and the ECB), there are institutions (pension funds) that are starting to buy in, and in comparison, the dot-com bubble (which was mainly a US led bubble, not global) went to $5.7tn to $1.7tn. Gold is worth $8tn globally. Why couldn't Bitcoin get to part of that level, e.g. $2tn?
It sure looks like a bubble, and it probably is, but it could literally be the largest bubble in our lives -- unlike one stock in the market, this is a global phenomenon + you only have a few currencies that matter.
Bitcoin doesn't have fundamentals. Stocks are a claim on assets, buildings, inventories, and future profits. Real shit, like a parking lot full of trucks or something. Those are the fundamentals. Cryptocurrencies dont have anything like that.
To the extent that there is an analogous concept it's their utility as a means of exchange. Which outside of drugs and hard drive ransoms is minuscule at best.
Bitcoin has fundamentals though. Per the whitepaper it was designed to be just a means for individuals to transfer money to each other digitally without much friction. The further it gets from that the more we're asking the network to stretch to meet demands it was never designed to.
This only works if the value of BTC is pegged to one or more fiat currencies. As it is, people are basically speculating on blockchain address space on BTC.
And looking at this fundamental value, other cryptocurrencies have arguable superceded it in terms of better tech/efficiency, so the value seems incredibly hard to justify.
Look into DASH, it has a fundamentally different architecture than bitcoin. The biggest pros are instantSend, privateSend, and the DAO (A governance system).
In addition to the other response, another example is ethereum's ability to offer smart contracts, which is not possible with bitcoin. Transaction rate limits and power consumption also are more efficiently handled.
They're different, which is why I used the term arguable--there's no clear reason afaik that bitcoin should be so valued relative to others, but I could be wrong.
- if 1 BTC were $100 trillion, then it's clearly passed the fundamentals of "being a unit of exchange between commercial entities", since it would be way more than what any form of exchange would ever require.
The truth behind the pedantic answer:
- if it's a store of value, then the "fundamental" value is the amount of fiat that's gone into the system so far. If all the exchanges have roughly $100 in USD deposits, the base value of their bitcoin deposits will be at least $100, roughly.
- If it's as a means of transactions, then the fundamentals are linked to how much transaction volume is going on. For example the flow of USD into BTC and vice-versa. BTC <-> BTC exchanges in that universe probably help to define things as well, as it would be used as an alternative to USD.
The dollars don't come from nowhere, so there's at least some base numbers you can think about. Thinking of it as "USD going into the ecosystem" and "USD going out" is a good proxy for now I think. Obviously very fluid, though.
You’re forgetting currency control evasion. If a businessman from a country with tight controls wants to move money out of the country he would buy bitcoin and then sell it the other side of the border. This sort of activity is going on all the time, and it creates demand for crypto currencies.
If you have to do that, it doesn't seem particularly advantageous over existing methods. You're meeting in person, exchanging cash illicitly, etc. If someone is willing to do that, why not just buy USD in a foreign bank account directly? (That's my understanding of the current system; people with clean histories open accounts with varying amounts of money in USD / EUR / JPY jurisdictions, then transfer control of those accounts to someone else, for a small profit margin, who then transfers them again, in exchange for cash at a significant margin, in, say, China.)
Either way, someone ends up with cash CNY and the other person ends up with electronic USD or EUR or whatever.
The immediate limiting factor is the vulnerability of any in-person transaction to traditional law enforcement mechanisms, and the eventual limiting factor is that the exchange rate is going to be impacted by the demand for cash CNY. Eventually nobody is going to want to sell you USD (or whatever) for your cash-in-a-bag CNY, or will only do it at exorbitant rates.
I don't disagree with this, but if true, then it means that the value of cryptocurrency comes at the expense of other currencies. Every time someone in china sells their renminbi to buy bitcoin, bitcoin's value increases while the value of renminbi decreases. If that is the case, then bitcoin does indeed have value, and will reflect the differential of the cost of renminbi vis-a-vis its value on the world market.
Easy enough to rob someone for this amount of money too. As Eric Schmidt said (in the context of a hostile government, but it works here too): no passcode in the world is going to protect you from a man holding a gun to your head and demanding said passcode.
Split your loot into 100 pieces and convert to BC one by one. So you get robbed five time out of a hundred, no big deal. Eventually find a reliable trader and take your business to him.
You don’t have to make it totally safe, just safer compared to other methods of evading control.
> You’re forgetting currency control evasion. If a businessman from a country with tight controls wants to move money out of the country
Before you can move it out of the country, you have to get it out of the bank, and your bank will refuse to do that with currency control measures in effect.
What I don’t get is that you can’t buy a car with bitcoin. So surely this should also create a selling pressure, unless they just buy bitcoins with the intent to transfer money at a later stage.
The fundamentals are at the current price of $17,000/btc bitcoin mining costs are about $14.5B annually(144 blocks of 12.5 btc/block plus ~3.8 btc/block in fees) in electricity expenses due to paying off miners which is about on par with the 8th largest company in the world Facebook. Bitcoin's revenue/year is however much money people feel like FOMOing in + however much tether money bitfinex feels like printing which right now is more than the mining costs. Once this figure changes, the price will decline. For reference, Facebook has ~$24B in revenue/year.
It isn't crazy to imagine crypto becoming adopted for actual transactions. Even if people are currently speculating, they're still downloading wallets they can spend from and loading it up with currency. For all these users there is now nearly zero obstacles to spending. This isn't even to say bitcoin is the transaction layer, but bitcoin still provides liquidity to any alt/2nd layer solution.
The vast majority of novice speculators are using Coinbase. They at least attempt to maintain the appearance of compliance; but I suspect a large market run would wipe them out of USD fairly quickly.
The fact that “experienced” Bitcoin speculators are getting nervous is a sign the bubble is about to pop. Tether volumes are hockey-sticking up as a result. There has been enough technical analysis to show that USDT volume drives BTC price and not the other way around. USDT volume is hockey-sticking over the last few weeks. Feels like a Ponzi scheme and the whales are cashing out.
The price of one bitcoin is arbitrary. $1 is no more crazy than $1 million. It's all crazy. But the question is, what's the supply and what's the demand.
At some point there will be a correction. This velocity can't be maintained forever. But this is also a technology that heavily relies on going viral to become functional (payments/contracts) - and based on real world interactions I think crypto is heading towards an adoption curve that justifies its price.
This is incorrect. Firstly, it's 10 per second. Secondly, it shouldn't be all that hard to imagine "side chains" or even "local-party networks" being built to handle transactions and use the underlying blockchain as a settlement mechanism. This is, as I understand it, how the lightning network works/will work, and I see no reason to think it wouldn't improve Bitcoin's adoption, which is already orders of magnitude better than other cryptos.
>Croman, Kyle; Eyal, Ittay (2016). "On Scaling Decentralized Blockchains" (PDF). doi:10.1007/978-3-662-53357-4_8. Retrieved December 10, 2017. The maximum throughput is the maximum rate at which the blockchain can confirm transactions. Today, Bitcoin’s maximum throughput is 3.3–7 transactions/sec [1].
I’d be interested in seeing evidence that USDT “drives” the USD-BTC exchange rate. I do think it’s a good indicator of sentiment about the exchange rate. Typically it’s within $0.02 of its supposed $1.00 value, but today it reached at least $1.08 and is still at $1.06. That means people are willing to pay a 6% premium just to be able to cash out of BTC today.
But how far? Corrections of 30% in say Bitcoin are common. Does this matter? I would say not -- it's not something I lose sleep over. It's fine, boom and bust.
If you buy in, buy in during a consolidation phase, when you see the price is stable. Ethereum had a huge run up, yet then consolidated for around 6+ months around $300. I would say that is healthy. Now it's heading higher. "Fundamentals" aside, of course.
It's not that I love banks; it's that we rolled back all the banking regulation that kept that stuff in check prior to 2008. Replacing that with a system with zero regulation does not seem like progress...
I have heard many anecdotes about finance money coming in. We are witnessing it.
Also, rich Saudis are scared shitless about losing their wealth when political winds change. They put their money into crypto and it's much, much harder to take it from them, provided they own the private key. This is the best mechanism of wealth storage yet created, provided the value holds, which as more around the globe believe in, it becomes more likely. Bitcoin could be digital gold, but we shall see.
>>>They put their money into crypto and it's much, much harder to take it from them, provided they own the private key.
That's not exactly trivial - how do you store a private key in such a way that it's safe, accessible to you and only you, cannot be destroyed by your enemies, and can be passed on to your heirs upon your death?
It's comparatively safer than holding millions in government-controlled banks, property which can be seized with the stroke of a pen, physical wealth like gold which is tough to store and move, and has value anywhere in the world (not many people in Europe care about your franchise holdings in Riyadh).
In contrast, if you buy bitcoins, when you flee the country you can bring your wealth with a memorized 24-word code or a slip of hidden paper, and people in other places will accept your Bitcoin.
Maybe not yet as of today, but they're coming. I have a friend (wealthy family with a substantial family office) who bought into crypto at the beginning of last year.
His dad runs quite a large traditional investment fund and knows of people in his network working at pension funds that are looking at putting money into Bitcoin / Ethereum and others. The family has done private equity deals together with some of these funds (mostly raising debt financing from them).
I'm not an extreme crypto bull, but I honestly think it's still early. But there will be massive volatility along the way.
Note: not investment advice, obviously. Just my opinion.
Wow, pension funds should not be doing currency speculation. That's bad.
The problem with crypto-_currency_ is that it's not a productive asset. A share of a business pays dividends over time and thus has intrinsic value (and _some_ speculative value), while a currency does not. A currency transaction is a zero-sum game, which is good because it minimizes friction.
Buying cryptocurrency with the expectation of increases isn't investment, it's _speculation_.
Crypto has been one of the better performing asset classes in the last 5 years. That is just a fact -- if looking in percentage terms.
Pension funds generally allocate up to 5% of their portfolio to alternatives, which could be smaller funds investing in art, watches, music royalty rights, farmland, wine, and the likes. This also includes crypto.
If you're an investment manager, it isn't necessarily crazy to allocate 0.2 or 0.5% of your portfolio to crypto and try to capture some of those gains.
Absolutely -- To the parent: think of it this way. If you had $200 in your fund last year to invest last year, and put $1 into crypto, then at worst, you lose that entire $1, and your portfolio is down to $199 (notwithstanding what you did with the other money), a loss of 0.5%. If you happened to pick Litecoin, and bought 0.25 LTC when they were at a stable price of $4 a piece, today that 0.25 LTC would be worth $80, giving you $280 in your fund, or a gain of 40% in your total portfolio value. You can look at ETH, Bitcoin as well and also see large gains.
Even without perfect timing of the market, it's a pretty easy decision for a portfolio manager to look at this and say: "While, like any other asset, past performance isn't an indicator of future performance, given the price history and increasing trading volume over time, the risk/reward balance skews heavily in favor of putting at least some tiny bit of money into crypto for all but the most risk-averse."
You and your parent comment are describing a kind of hedge, not a material investment. That’s fine but did not seem to be what my parent was implying. Funds may just as well choose to maintain several points in cash (also not a productive asset).
The analysis presented is a bit disingenuous. If you put money into every thing that could pop 400x, you’d have no money. Pension funds in particular need to be conservative and even if they’re doing “risky” things like venture capital for example, they would want late stage funds — lower returns, lower risk.
I don't understand why you are being downvoted. Pointing out the difference between productive and non-productive assets is exactly what is needed at the moment.
Everyone is talking about what if scenarios where huge offshore money or sovereign wealth or whatever comes into Bitcoin YUGE. Well, ok, do you think that money is just parked somewhere or is actually invested somewhere in a productive business?
Most dollars which aren't spent on consumption are converted into equity in productive businesses. In this case, dollars are merely the unit of account. You aren't invested in dollars, you are invested in businesses that produce the things that people need and those investments are measured in dollars.
You know pension funds that spend a material portion of their holdings speculating on currencies? I’m skeptical. Currency trading is zero sum and highly risky. Pension funds may keep small amount as a hedge, but to actively speculate on currencies seems like a breach of fiduciary duty.
I used to work for a hedge fund. Now I'm in a different industry. While many individuals at the fund were interested in cryptocurrencies, they weren't going to put client money there. In order for pension funds to invest in cryptocurrencies there have to be very liquid securities that they can invest in. Futures don't count because almost no pension fund will use them directly (though pension funds do invest in hedge funds, which might have a futures strategy).
This is my belief too. I think if you can buy and hold for the next 5 years or so, massive volatility doesn't affect you. Volatility affects the day traders and the like.
To draw a parallel to the stock market is not appropriate, but those who bought into MSFT or AMZN even during the peak of the dot com bubble have nothing to regret today.
Most coins will become close to worthless, but many will survive and support whole new industries. And this time it looks like it wont be an ad supported future, thank $DIETY.
That was my point... OP had cherry picked the examples of microsoft and amazon to support the claim that buying and holding cryptocurrency through a bubble is a smart investment, which is of course absurd.
What I meant was that if you distribute your money across all cryptocurrencies even if some of them become worthlesss you won’t have anything to regret, in he long run. I don’t know if anyone who had the foresight to cherrypick MSFT and AMZN. Most of them invested in the tech basket. This is just general diversification principle nothing new
You're not wrong either. And the higher it goes, the riskier it gets. And while I'm seeing signs of a bubble, I don't think that (excluding a few volatile 30-40% corrections along the way) we will see an implosion in 2018 just yet. The entire crypto space "only" equals the value of Facebook.
In the end, if it goes another 30x from where we're at today, and then has an 80% correction, you'll still be up 6x. It only makes sense to exit if you think such a correction is imminent, or you believe the entire space is going to zero.
“Fiat” usually implies something different from the way you are using it. No government has issued Bitcoin via fiat, there are no treasuries or armies backing it.
Gold is a tangible commodity. I’ve been in the cryptoasset space for a while and I’m still not exactly sure how to cleanly classify it.
>I woke up this morning and was astonished to see that LTC was about $380. This was in the course of about 5 hours. Had I not sold it last night, I would have made almost $40k.
I can relate. If I'd done the exact paired trades i did this month (only between btc, bch, eth, and usd), only at different times than i did, i would have doubled my money yet another time, for a life-changing sum.
Instead I've been sleeping well every night for a month on a healthy exit. Even with hindsight, I don't have any regrets.
I didn't get into the space to get rich and sweat at night, I got in to socialize monetary control. Now crypto doesn't even want to be money. Once this bubble cools off I can start dreaming again.
Astonished, why? Capital is fleeing BTC to LTC probably because of BTC holders getting nervous about high volatility and exchanges going down or temporarily suspending transactions. Which in turn will also screw LTC. This article is a clear indicator about this.
The correct way to look at a missed investment in my opinion is to look back and consider if given the information you had at the time and the risk you were willing to take, you would have made any other decision. Ignoring these two factors is like regretting not having picked the right lottery number.
Do you feel any guilt that your profits are at the expense of naive speculators who "have no business investing in it are taking on debt to do so, with no clear exit strategy" ?
BTC will supplement gold for value storage and will hit a $5T market cap in a few years IMO. It certainly has utility for storing and moving value. Don't underestimate that.
BTC will not once it gets into multitrillion dollars. It's a young asset with no derivatives that the market isn't sure how to value. Also there are ways to hedge volatility.
This is really cool that you made a profit on this bubble, and if I were to take that point to heart and start investing USD in BTC, I guess I would just become part of that. As you say, I would just be out to get rich.
But what about all the non-fiat purposes of crypto currency? It seems that is what’s currently getting lost in the conversation.
For example, I simply want a way to accept electronic payments from people without dealing with middle men.
I want merchants and the general public to become aware of the inherent value in some blockchain by itself as a way for us all to spend “money” and get “paid” in a peer-to-peer manner.
I hope the people who are buying into this bubble come to see this. But I’m afraid if they do get burned, they will have missed the whole point.
Do you feel all crypto projects are included in the bubble you described?
Personally, I think many are extremely overbought (BTC, LTC, ETH, etc) but can't help but feel that those with real utility and industry value are (relatively) undervalued.
I only post limit orders and pay 0% maker fee on GDAX. I've never paid to make a trade. If you do pay as a taker, BTC is 0.25% and LTC is 0.3%, but I set relatively conservative exits for my positions and haven't had much trouble making them.
"it has to solve a few problems first (transaction fees/time and anonymity)"
Bitcoin Lightning currently works on testnet ... give it a few months and those problems will be solved. The price is exploding in anticipation of events like this.
Some people could be in it for the adrenalin.
People do dangerous things all the time, so it can still go on... what's the serotonin level for crypto users? :)
I had the exact same experience visiting family over Thanksgiving. They watched foxnews the entire time and I remember seeing that Ron Paul commercial and also another one that was throwing out buzzwords and phrases like "Built with blockchain technology."
I was just like wow, this is going to be pulling in a lot of people that have no idea what they are doing. Everything seems irrational. Who knows though.
There's a very nice library called ccxt that uses a code generator to produce python (async and standard), javascript, and PHP libraries that implement a standard interface for dozens (hundreds?) of crypto exchanges. I think a nice project would be an in-browser JS app that accessed each of the APIs in my exchanges (via logged in cookies or API keys or whatever) to pull trade history, deduct fees, and create a CPA-friendly tax form from all of my crypto exchanges.
I never used twitter before the 2016 election. I don't use twitter to communicate with people I know in real life, but I know my father and I both started using it as a place we can put on a pseudoname and talk about politics openly, without having to worry about bothering friends & family like on facebook.
Both my own and my father's accounts were classified as "exhibit patterns conducive to a political bot or highly moderated account tweeting political propaganda.", which is in a sense kinda accurate because they are solely political outlets for us. I think this is a feature, not a bug, and probably the only use case the service has provided for me.
I feel like twitter, tumblr, and other semi-anonymous networks have always been pretty political. I think the only thing that has changed is that people see twitter as news - stations actively report about what's going on on twitter - and that online political discussions are no longer dominated by liberal / social justice voices.
Compare that to an Amazon fulfillment center, where from what I've seen they walk a lot to pick packages (but even that's being automated away by Kiva robots), put the contents into boxes, and load the boxes into trailers. Amazon packages are relatively light compared to most business shipments of stuff that went through UPS (which are usually things packed in bulk). Maybe it's mind-numbing, but the horror stories about how physically grueling it is (save for maybe when they weren't properly air conditioning the facilities) seem overboard. Even then, there were days in the summer where I'd be unloading a trailer that was baking in the sun all day, and we didn't get AC in there -- we just sweated it out and drank a lot of water.
I don't really know what people expect when they work in a warehouse. It's not glamorous and it's not easy, and it doesn't require that much skill so it doesn't command that much pay. But it's better than no job at all.