My friend who works in cybersecurity and knows a lot about crypto says that it doesn't provide any protection against government seizure. It's more difficult for the government, so they don't bother when say low level drug dealers use it, but if they really want to take your crypto from you they can.
Not exactly; it's complicated. Depends on which type, how you're holding it, and how good your OPSEC is. If you are using a service like Coinbase that is more or less bank-equivalent, then yeah, easy pickings. If you are 'rolling your own', so to speak, of the right kinds and using them in very careful ways, then, while nothing is impossible if a state is willing to throw go-to-war levels of resources at it, unless one is among a handful of absolutely top tier folks in worth and/or importance, it's not going to happen.
My guess is that the Canadians - who weren't holding anything back - were only able to pick the lowest hanging fruit. It just so happens that 99% of the people who are nickel-and-dime crypto dabblers are really, really low fruit, especially if they were only 5 minutes into the bare minimum learning curve before donating a gallon of diesel to some stranger.
If you are trying to use crypto to keep wealth protected from the state but at the same time use it to purchase from entities which don't yet accept it, there are various solutions out there to this problem of exchange, but there is no getting around the problem that they are all inescapably somewhere away from 0 on the shady spectrum, and usually on the sophistication spectrum too.
It seems to me that the simplest way to regulate crypto is to regulate those who use it, which is probably why crypto will most likely remain relegated to the shadowlands. The day it is useful on any meaningful scale to buy groceries are cars or whatever is the moment it surrenders its main value prop.
Re: Zvi Mowshowitz on Trudeau's policy of enlisting banks to freeze assets of convoy truckers/protesters.
Arnold Kling's focus in this blogpost is crypto. If I may make a tangential comment:
Zvi Mowshowitz and Tyler Cowen emphatically opposed the convoy/protests and lamented the lack of state capacity in Canada's government. Tyler also lamented the movement's lack of "strong analytical abilities." Now they recoil when state capacity shows its face in the Emergencies Act and in the policy of enlisting banks to suppress the movement and punish protesters.
I wasn't surprised at Trudeau's strategy. Why were state-capacity libertarians, who have strong analytical abilities, caught off guard?
There's a 4 part documentary on LuLaRue, a women's clothing MLM scheme that's on Prime (I think). Many MLMs have the same structure. I found it interesting that the most "successful" MLMs give the rank and file something besides the product to believe in. That was (is) certainly true of LuLaRue.
Unrelatedly, who knew there were so many experts on Canadian law commenting on the internet? I guess all those experts on epidemiology retooled to meet the new demand.
My dad always said "keep enough gold on hand to cross the border if you need to." I think its good advice. Oddly enough, I feel safer having some of my money in real estate in Canada. To each his own, I guess. Though I did get hit with that foreign tax last year when I sold my interest in a commercial building. That kinda sucked. I had somehow thought it was aimed at the Chinese! I imagine there are unknown unknowns investing in Switzerland as well.
Can't things have pyramid scheme qualities and non-pyramid scheme qualities? Especially with things that have social/networking aspects, where more people using something actually does truly increase its value. I always think of nation-level things as having a pyramid like trait: your retirement value (and its expected increase in value in the future!) is heavily based on the GDP growth of the country, which is based on things like tech growth, but also immigration/birth rate. If Country X stops getting new MLM sellers, I mean, citizens, wouldn't a similar thing happen?
The obvious flaw of MLM's from my perspective is I don't know how the heck you'd ever generate any repeat business. Let's say I bought some vitamins or whatever from a guy down the block and they turned out to be really gangbusters and I want to buy more, it's still a pain trying to arrange a mutually acceptable time to meet with my neighbor. In my neighborhood, we have these places called supermarkets and pharmacies that are open all the time and stock thousands of different products I like and which I already visit regularly. My neighbor's strategy of living in a house down the street and selling about six products out of his basement is going to have a tough time competing, given the disadvantages he faces.
A lot of the most successful MLMs sell things via social engagement. Think Mary Kay cosmetics or the old classic Tupperware parties. If you're fine with grabbing a product off a shelf it doesn't make a lot of sense but some products, and some purchasers, are going to want a more personal experience than a big box store provides.
While I get where Arnold is coming from, I think he is a bit unfair to MLM in terms of the equation to a real pyramid scam where the last folks in are well and truly fleeced. It's not like there aren't a few mailroom clerks who got Microsoft or Apple stock as compensation early on and became millionaires without having made a significant technical contribution to the project, and I think you could make the same "don't pay to sell" claim about franchise agreements but nobody slags on those as much. I have some tangential exposure to MLM (ex-wife sold Tupperware for a few years) and the mid-level folks are performing a lot of the tasks that a standard sales/distribution manager would be performing in terms of motivation, training, new product intros, and recruitment. It's just that their compensation is not a salary from corporate but a percentage of the income of the sales organization they build and maintain. It's also not uncommon that, unlike a typical franchiser, the bottom level sales folks in a MLM are given quite a bit of product and support up front with little to no cash outlay which is then paid back via the percentage collected. Yes, it can be a bit of a scam but it's not without risk to the company if the new hire doesn't work out.
Yeah, that makes sense re: social engagements. I still think you have the same problem, though. Say you have tupperware parties at your house and invite all your neighborhood friends, and then you host another one six months later. What's the fall off in attendance and sales between dates 1 and 2 going to be? Pretty dramatic, I anticipate.
In a typical business, people at the lowest level of the sales force are paid by the company. In the academy, people at the lowest level of the sales force pay the distributor above them for the privilege of teaching.
I joke, kind of. Obviously universities aren't MLM schemes, they always have seemed somewhat analogous. Each successive generation of recruits pays more and their expected ROI falls.
In other industries, this would automatically balance through the market as people would flee the low return segments, but education is heavily subsidized, emotionalized high-pressure recruiting is applied in manners that no used car salesman or MLM marketer would dare try, and governments at all levels impose severe employment restrictions on those who refuse to be recruited.
Apple pays a dividend so arguably it is not a pyramid scheme. Google (or technically Alphabet and its many, many holdings) exists merely to pleasure the hubris of its managers and will never pay a dividend at any time ever. It has a price to book ratio of about 7. This in a market in which there are more than a few stocks at under 1. Investers must think that there are still suckers out there that will pay them to take shares off their hands even as the price is down about 10 percent. Google will definitely be a portfolio killer and all the sheep buying S&P 500 index funds are going to get slaughtered. Does that technically make it a "pyramid scheme"? I think anytime that you don't have the fundamentals on your side and are investing solely on the hysteria of crowds, then you are in the general proximity of pyramid schemes. At any rate by including GOOGL in the S&P 500, Standard and Poors reduced their brand value to be roughly commensurate with that of Amway.
My friend who works in cybersecurity and knows a lot about crypto says that it doesn't provide any protection against government seizure. It's more difficult for the government, so they don't bother when say low level drug dealers use it, but if they really want to take your crypto from you they can.
Canada is giving us a live example.
Not exactly; it's complicated. Depends on which type, how you're holding it, and how good your OPSEC is. If you are using a service like Coinbase that is more or less bank-equivalent, then yeah, easy pickings. If you are 'rolling your own', so to speak, of the right kinds and using them in very careful ways, then, while nothing is impossible if a state is willing to throw go-to-war levels of resources at it, unless one is among a handful of absolutely top tier folks in worth and/or importance, it's not going to happen.
My guess is that the Canadians - who weren't holding anything back - were only able to pick the lowest hanging fruit. It just so happens that 99% of the people who are nickel-and-dime crypto dabblers are really, really low fruit, especially if they were only 5 minutes into the bare minimum learning curve before donating a gallon of diesel to some stranger.
If you are trying to use crypto to keep wealth protected from the state but at the same time use it to purchase from entities which don't yet accept it, there are various solutions out there to this problem of exchange, but there is no getting around the problem that they are all inescapably somewhere away from 0 on the shady spectrum, and usually on the sophistication spectrum too.
It seems to me that the simplest way to regulate crypto is to regulate those who use it, which is probably why crypto will most likely remain relegated to the shadowlands. The day it is useful on any meaningful scale to buy groceries are cars or whatever is the moment it surrenders its main value prop.
Re: Zvi Mowshowitz on Trudeau's policy of enlisting banks to freeze assets of convoy truckers/protesters.
Arnold Kling's focus in this blogpost is crypto. If I may make a tangential comment:
Zvi Mowshowitz and Tyler Cowen emphatically opposed the convoy/protests and lamented the lack of state capacity in Canada's government. Tyler also lamented the movement's lack of "strong analytical abilities." Now they recoil when state capacity shows its face in the Emergencies Act and in the policy of enlisting banks to suppress the movement and punish protesters.
I wasn't surprised at Trudeau's strategy. Why were state-capacity libertarians, who have strong analytical abilities, caught off guard?
Tyler Cowen:
https://marginalrevolution.com/marginalrevolution/2022/02/you-want-to-have-educational-polarization-on-your-side.html
https://marginalrevolution.com/marginalrevolution/2022/02/you-want-to-have-educational-polarization-on-your-side.html
https://marginalrevolution.com/marginalrevolution/2022/02/a-blow-to-canadian-rule-of-law.html
Zvi Mowshowitz:
https://thezvi.substack.com/p/convoy-continued?utm_source=url
https://thezvi.substack.com/p/convoy-crackdown?utm_source=url
Arnold, If my post is too off-topic, please don't hesitate to remove it.
Thanks for another reson nt to invest in crypto...
There's a 4 part documentary on LuLaRue, a women's clothing MLM scheme that's on Prime (I think). Many MLMs have the same structure. I found it interesting that the most "successful" MLMs give the rank and file something besides the product to believe in. That was (is) certainly true of LuLaRue.
Unrelatedly, who knew there were so many experts on Canadian law commenting on the internet? I guess all those experts on epidemiology retooled to meet the new demand.
My dad always said "keep enough gold on hand to cross the border if you need to." I think its good advice. Oddly enough, I feel safer having some of my money in real estate in Canada. To each his own, I guess. Though I did get hit with that foreign tax last year when I sold my interest in a commercial building. That kinda sucked. I had somehow thought it was aimed at the Chinese! I imagine there are unknown unknowns investing in Switzerland as well.
Can't things have pyramid scheme qualities and non-pyramid scheme qualities? Especially with things that have social/networking aspects, where more people using something actually does truly increase its value. I always think of nation-level things as having a pyramid like trait: your retirement value (and its expected increase in value in the future!) is heavily based on the GDP growth of the country, which is based on things like tech growth, but also immigration/birth rate. If Country X stops getting new MLM sellers, I mean, citizens, wouldn't a similar thing happen?
The obvious flaw of MLM's from my perspective is I don't know how the heck you'd ever generate any repeat business. Let's say I bought some vitamins or whatever from a guy down the block and they turned out to be really gangbusters and I want to buy more, it's still a pain trying to arrange a mutually acceptable time to meet with my neighbor. In my neighborhood, we have these places called supermarkets and pharmacies that are open all the time and stock thousands of different products I like and which I already visit regularly. My neighbor's strategy of living in a house down the street and selling about six products out of his basement is going to have a tough time competing, given the disadvantages he faces.
A lot of the most successful MLMs sell things via social engagement. Think Mary Kay cosmetics or the old classic Tupperware parties. If you're fine with grabbing a product off a shelf it doesn't make a lot of sense but some products, and some purchasers, are going to want a more personal experience than a big box store provides.
While I get where Arnold is coming from, I think he is a bit unfair to MLM in terms of the equation to a real pyramid scam where the last folks in are well and truly fleeced. It's not like there aren't a few mailroom clerks who got Microsoft or Apple stock as compensation early on and became millionaires without having made a significant technical contribution to the project, and I think you could make the same "don't pay to sell" claim about franchise agreements but nobody slags on those as much. I have some tangential exposure to MLM (ex-wife sold Tupperware for a few years) and the mid-level folks are performing a lot of the tasks that a standard sales/distribution manager would be performing in terms of motivation, training, new product intros, and recruitment. It's just that their compensation is not a salary from corporate but a percentage of the income of the sales organization they build and maintain. It's also not uncommon that, unlike a typical franchiser, the bottom level sales folks in a MLM are given quite a bit of product and support up front with little to no cash outlay which is then paid back via the percentage collected. Yes, it can be a bit of a scam but it's not without risk to the company if the new hire doesn't work out.
Yeah, that makes sense re: social engagements. I still think you have the same problem, though. Say you have tupperware parties at your house and invite all your neighborhood friends, and then you host another one six months later. What's the fall off in attendance and sales between dates 1 and 2 going to be? Pretty dramatic, I anticipate.
In a typical business, people at the lowest level of the sales force are paid by the company. In the academy, people at the lowest level of the sales force pay the distributor above them for the privilege of teaching.
I joke, kind of. Obviously universities aren't MLM schemes, they always have seemed somewhat analogous. Each successive generation of recruits pays more and their expected ROI falls.
In other industries, this would automatically balance through the market as people would flee the low return segments, but education is heavily subsidized, emotionalized high-pressure recruiting is applied in manners that no used car salesman or MLM marketer would dare try, and governments at all levels impose severe employment restrictions on those who refuse to be recruited.
Apple pays a dividend so arguably it is not a pyramid scheme. Google (or technically Alphabet and its many, many holdings) exists merely to pleasure the hubris of its managers and will never pay a dividend at any time ever. It has a price to book ratio of about 7. This in a market in which there are more than a few stocks at under 1. Investers must think that there are still suckers out there that will pay them to take shares off their hands even as the price is down about 10 percent. Google will definitely be a portfolio killer and all the sheep buying S&P 500 index funds are going to get slaughtered. Does that technically make it a "pyramid scheme"? I think anytime that you don't have the fundamentals on your side and are investing solely on the hysteria of crowds, then you are in the general proximity of pyramid schemes. At any rate by including GOOGL in the S&P 500, Standard and Poors reduced their brand value to be roughly commensurate with that of Amway.