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@thumbsup.eth
If stocks didn’t exist, Elon, Bezos, and Thiel wouldn’t be megabillionaires. They’d have to pay themselves and their investors with real income not with this funny money that they can’t actually sell without it rapidly depreciating. All of the insane things rich people do with borrowing money to acquire things essentially for free is because stocks exist, and thus merely eliminating one thing (shares of companies) would radically reshape the world we live in, what wealth means, and the nature of power. Discuss.
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a1z2
@a1z2
I like where this thought experiment begins: stock markets make billionaire CEOs, and the power that comes from that is questionable. To me, though, I wouldn’t author restrictive legislation to make that impossible. Freedom is great. Instead, I’d ask what outcome would I like to see? And that would be easier access for laypeople to get into venture investing. Make it easy for people to get in early to have more transformative wealth opportunities. That’s one aspect I like about crypto.
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I think the direction you propose is in line with what a lot of crypto folks are aiming for, so it is a likely outcome. My worry is that it’s still predicated on a return that comes from a market of external buyers. I don’t see this dynamic as honest, nor sustainable. If we define venture investors in the so-called “venture communist” sense wherein they are lenders who become part of an interlinked cooperative venture, then I think that works. Otherwise I’d prefer crowdfunding without any expectation of return. As for legislating it, I’m not sure it’s necessary. We currently legislate these things into existence so maybe just removing all the systems that reinforce them and see if they survive in a “free market” environment. As someone towards the libertarian side of the spectrum, I’d rather see the mind-share shift away from the old guard to new models and this form of investment become a relic that no one misses.
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a1z2
@a1z2
Can you expand more on what you find dishonest and unsustainable about a system predicated on a return that comes from a market of external buyers? (Which let’s just call them public markets)
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Sure 🙂 Public markets themselves are not dishonest but paying back investment with tokens (stocks or crypto) is predicated on assumption about how the market will value that token. I see two problems with this: 1. It’s a shirking of responsibility for debt paid. You are saying, loan me money, and someone else will pay you back. And the risk becomes whether or not you get a reasonable return from that third source. I find this dishonest to the lender and to the market who often don’t realize they are opting into being dumped on. You see anger a lot when people discover the vesting amounts given to founders and see how it affects the chart. In almost every case, stocks and crypto are overvalued at launch, and rapid lose value, most never to recover. 2. It’s unsustainable because educated buyers and those who’ve been through enough ponzis won’t buy the tokens. It already requires massive market manipulation to trigger pumps that inspire confidence. Additionally AI may introduce sophistication.
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