GameStop, Bitcoin and the Commoditization of Populist Rage

&gt; <i>Everyday I see a world where many in my generation have simply given up all hope for opportunity of a family, a house, a stable career and forced to confront an uncertain future in a world that is slowly boiling itself to death.</i><p>South Korea and Japan are 10-20 years ahead of the same curve here. However, the result has been resignation and stagnation, not revolution.<p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Sampo_generation" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Sampo_generation</a><p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Satori_generation" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Satori_generation</a>

The US Congress sells out all citizens, via lobbyists. Populist rage comes a rigged economy, where they are losing money.<p>Rigged pharma. Unethical medical billing. Out of control healthcare costs. 2008 mortgage crisis. High Frequency trading firms front running trades. Panama Papers. Libor. And a million more.<p>Citizens won&#x27;t have it any more. Fixing congress (so they don&#x27;t sell us out), and congress CAN would WOULD fix this.

&quot;Let’s state the uncomfortable truth. The future for many Americans is bleak and their lives are going to be nasty, brutish and short.&quot;<p>I find it funny how first-worlders are horrified by the idea that they might have to live in mild discomfort. Maybe try looking at how most of the world that isn&#x27;t the US and Western Europe lives before saying people&#x27;s lives will be &quot;nasty, brutish and short&quot; because they won&#x27;t be working some low-skill 9 to 5 for 40 to 50 years while making 6 figures and then retire with the rest of their lives pretty much planned out for them.

&gt; Let’s state the uncomfortable truth. The future for many Americans is bleak and their lives are going to be nasty, brutish and short. Everyday I see a world where many in my generation have simply given up all hope for opportunity of a family, a house, a stable career and forced to confront an uncertain future in a world that is slowly boiling itself to death.<p>But why? Why can&#x27;t more kids get into STEM fields? Why aren&#x27;t there more decent jobs, say manufacturing jobs? Why are American kids so bad at basic reading, critical thinking, and basic arithmetics? Why is there an apparent bifurcation in the K5 system, where a large number of perfectly capable kids get misled and tortured by craps like Common Core, while a small number of kids are ready for algebra or more advanced maths? Why do we have kids who get straight A in high school yet can&#x27;t pass placement test in a community college? Why do we have so many kids who ace through high school think entry-level courses like introductory calculus or organic chemistry are too hard? The questions can go on.<p>And I certainly don&#x27;t hope that the answers are what Seattle and California public schools have started to teach: <a href="https:&#x2F;&#x2F;equitablemath.org&#x2F;" rel="nofollow">https:&#x2F;&#x2F;equitablemath.org&#x2F;</a>

&gt; And so we see Gamestop story fall out of that. In a nutshell a bunch of retail investors (possibly with help from institutional insiders) decided to pump a small cap stock far beyond what the valuation of the company should be.<p>This completely ignores the fact that the stock was shorted over 100% of float, and people knew it was going to squeeze so they bought in hoping to ride the wave. And that did in fact happen, although timing is everything.<p>I could go on, but this philosophical piece is incredibly lazy with its historical accuracy.

&gt;The last ten years have seen a massive redistribution of wealth from this age bracket into older demographics.<p>This has very strongly increased during that year of pandemic. In my country a vast amount of money is spent on protecting old people that future generations will be liable for.

&gt; This isn’t some David vs Goliath moment. This is Goliath drinking champagne while David dances for his amusement.<p>This is great.<p>Sums it up.

Really enjoyed this piece. He could have also dove into SPACs and Tesla. Being a fake populist on Twitter is incredibly lucrative.

&gt; Bitcoin doesn’t work, it’s a naked speculative bubble based on a technology that doesn’t scale can’t and can’t replace any existing financial service<p>Feel free to short Bitcoin in a futures market, and keep all your wealth allocated in assets associated with the US dollar.<p>We&#x27;ll talk again in 5 years time.

I agree with how you&#x27;ve painted GameStop and Bitcoin as the nihilistic struggle against the establishment. However, I disagree with your conclusion. You make a pretty bold argument that underpins the whole conclusion so that&#x27;s what I&#x27;ll focus on:<p>&gt; Bitcoin doesn’t work, it’s a naked speculative bubble based on a technology that doesn’t scale can’t and can’t replace any existing financial service<p>When you say Bitcoin doesn&#x27;t work, what are you referring to? As a medium of exchange, you&#x27;re correct: it doesn&#x27;t work. But the narrative in crypto communities is that Bitcoin is becoming a store-of-value. Under that narrative, Bitcoin is &quot;working&quot;: it&#x27;s replacing gold as a store of value. We&#x27;re seeing institutions expand their portfolios to include BTC. There are additional arguments for why Bitcoin may be a better hedge against inflation than gold or oil. Here is an interesting analysis by Winklevoss twins [1]<p>There&#x27;s more to cryptocurrency than Bitcoin. Today, there are over 4,000 crypto tokens out there and they&#x27;re each solving various use cases with varying success. One particular thriving area is Decentralized Finance (DeFi) which creates decentralized exchanges, market makers, lenders&#x2F;borrowers that aim to disrupt traditional (centralized) financial structures. As proof that there&#x27;s something here, decentralized exchanges are taking market share from centralized ones - which are valued at $100B.<p>Or consider the more visionary take on cryptocurrencies: decentralized computation networks that create economies <i>for</i> network participants. Centralized businesses must act in the interest of shareholders and are built to extract as much value from their product as possible. Decentralized computation networks, on the other hand, do not. They can (and are) constructed to be minimally extractive, taking only what is needed to reward network participants &amp; secure the network. Thus, the value capture is distributed across all network participants, enabling new forms of humans organizing together to achieve a common goal. Check out [3] if you&#x27;re interested in learning more.<p>I hope this spurs your curiosity to dig into cryptocurrencies beyond just the surface. Thanks for writing the article!<p>[1] <a href="https:&#x2F;&#x2F;winklevosscapital.com&#x2F;the-case-for-500k-bitcoin&#x2F;" rel="nofollow">https:&#x2F;&#x2F;winklevosscapital.com&#x2F;the-case-for-500k-bitcoin&#x2F;</a> [2] <a href="https:&#x2F;&#x2F;defipulse.com&#x2F;" rel="nofollow">https:&#x2F;&#x2F;defipulse.com&#x2F;</a> [3] <a href="https:&#x2F;&#x2F;smartcontentpublication.medium.com&#x2F;the-purpose-and-value-of-cryptocurrency-and-tokens-4ad9db9fac7b" rel="nofollow">https:&#x2F;&#x2F;smartcontentpublication.medium.com&#x2F;the-purpose-and-v...</a>

&gt;&gt;&quot;Bitcoin serves as an emotional dual to the lottery. While in the lottery people pour their hope and money into the chance of life-changing winnings based on impossible odds.&quot;<p>I&#x27;m reminded of an advert campaign slogan that New York State ran for it&#x27;s lottery: &quot;All you need is a dollar and a dream&quot;. Spot on.<p>An astute friend&#x27;s comment was: &quot;We&#x27;ll keep the dollar and you keep the dream&quot;.<p>I&#x27;ve long agreed with the author that lotteries are an innumeracy tax. His insight that BTC is also largely the same is spot on.

Is it possible to make a cryptocurrency that does &quot;real&quot; work as its proof-of-work: work which is computationally intensive, but it solves some real life problems instead of &quot;wasting&quot; the energy?

I’ll be curious to read what the author thinks in the next few years regarding DeFi and NFTs on Ethereum and other smart contract blockchains. Things are just getting started and it’s going to get interesting.

Socialism or barbarism!<p>Socialism provides a &quot;yes&quot; to every &quot;no&quot; in this article. Authors critiques are good, but author too lapses into nihilism.<p>Even cryptocurrency is not beyond rescue, it is only beyond rescue under a capitalist mode of production. Technology is the cause and effect, but we _do_ have agency.

&gt; It’s not surprising that when it comes to their investment strategies, that the “you only live once” philosophy and a preference for high-risk high-return investments is preferred. What has this generation got to lose?<p>That is pure irrationality. IMO The real issue is a crap education system which gives neither opportunity, nor good advice-- instead of training rational actors w&#x2F; valueable skills it focuses on building activists before they have any life experience and smacks of marxism.<p>What&#x27;s the path out? Free education for socially profitable degrees might be a fix (ie STEM). Not wasting the first 18 years of a person&#x27;s life might be an alternative (eg: why are we memorizing dates permanently recorded online, why arent we teaching (personal) financial and programming expertise?).<p>Edit: by financial I meant personal financial skills, not wall street skills. My apologies for the imprecision.

This could have an interesting point but it&#x27;s lost in its anti-Bitcoin rhetoric.<p>Bitcoin is like the lottery? It&#x27;s up thousands of percent over the years. Many, many people have made real money and&#x2F;or are sitting on massive gains. Regardless of if you think Bitcoin has actual utility (I think it does in spades), labeling it a &quot;failure&quot; means your argument is instantly ignored by every person who&#x27;s up on their investment (aka every person who&#x27;s held Bitcoin over the past 10 years).

I find bitcoin to be the greatest innovation in finance in the 21st century, a watershed moment in economic development. For the first time any person can own a financial asset completely decoupled from any government. That’s the value proposition for me. It’s not nihilism - it’s optimism in the individual to succeed over the corrupt state.

&gt; And so we see Gamestop story fall out of that. In a nutshell a bunch of retail investors (possibly with help from institutional insiders) decided to pump a small cap stock far beyond what the valuation of the company should be. The whole setup requires a significant number of people to buy and hold the asset at a price that makes no sense economically. And in doing so they have locked each other in a game of musical chairs in which they collectively have to pour more and more money into this unsustainable scheme in order to maintain the bubble.<p>I think this completely misses the point. This isn&#x27;t just a plain pump-and-dump scheme. Before &#x2F;r&#x2F;wallstreetbets got involved, the price of GameStop was being artificially held low by over-zealous shorts. So some investors figured out the shorts were in an untenable position and called their bluff. The extreme high prices are as far as I can tell just part of the process of the stock price returning to a regular equilibrium, whatever that is. Blaming WSB for a valuation that wasn&#x27;t based in reality is a bit silly when it wasn&#x27;t based in reality to begin with. Without the shorts, the stock couldn&#x27;t have spiked as high as it did.<p>And in the end, GameStop will survive a bit longer (or even thrive, if it can figure out a successful model), and the people it employs will continue to have jobs.<p>I stopped reading the article when it turned into a rant against Bitcoin. I mean fine, you can criticize Bitcoin if you want but there&#x27;s more to it than just people investing in currency speculation. If you don&#x27;t think Bitcoin has any legitimate uses you&#x27;re just not paying attention.