Thread by @smdiehl

So let's finally talk about Coinbase. Let's not mince words ... they are a venture-funded gambling company. (1/)

But Stephen, Aren't they a bitcoin exchange?
Yes they are. And bitcoin IS a gambling product. It has no fundamentals, no exposure to the economy and trading it is a negative sum activity. It is a greater fools gold. (2/)

When you invest in a non-productive asset that isn't tied to any economic activity, the only thing you can do is try to find someone dumber than you to pay more for it. Nothing of value is created in this transaction. (3/)

These shitcoins aren't currencies, they aren't a hedge against inflation, they aren't a store of value, they just oscillate randomly based on sentiment and manipulation of the market to fleece unsophisticated suckers. (4/)

You know your slightly-off uncle-in-law who spends all day on Facebook ranting about the second amendment and the gold standard ... the one who always has some new get rich quick scheme in the works. Thats the crypto exchange customer base. And there's a lot of them. (5/)

This business model simply gives their customers a new type of financial betting game in the same arena as lotteries or casinos. The're simply a dealer for a class of users to get their next gambling-fueled dopamine hit. (6/)

"Economic bubbles spread by psychological contagion from person to person and in the process amplify stories that might justify the price increases and bringing in a larger and larger class of investors." (7/)

Notionally everyone thinks they're getting rich, and that illusory paper wealth is the mechanism that keeps the whole bubble inflating. Until it all comes crashing down because there's no escaping the base reality that more money goes in than comes out. (8/)

Wrap these get-rich-quick schemes up in a egalitarian story about financial inclusion for the unbanked, add a dollop of resentment about the subprime mortgage crisis, a pinch of libertarianism, and presto you've got a nice cover for your online bubble casino. (9/)

Off the record, their secondary business model is to take a giant pile of garbage assets that the funds who sit on their board invested in and exit them onto the market. (10/)

These are instruments for ICO "companies" that are so dodgy, unprofitable and fraudulent they make Enron look like Disney. There's no possible exit for these companies. Nobody will touch them, much less acquire them, and an IPO is impossible. (11/)

blog.coinbase.com/coinbase-conti…

And so these funds buy up these toxic distressed "assets" at a discount, package them up, and get these exchanges to dump the smoldering carcass on the international retail market for people to speculate on before they go to zero. (12/)

We've all read their CEOs crazy screed, but the /actual mission/ behind their mission-driven nonsense is a new regime of cloaking graft in a perpetually mutating narrative of libertarian ideals whose real purpose is wealth transfer from the gullible to the greedy. End rant. (13/)