Thread by @0xngmi

In a paper that analyses US spending habits, they found that for every 1$ spent on gambling, 0.99$ less was spent on long term investments, with outsized effects among poor households

imo this is happening with memecoins, it's not that entertainment money is being redirected to gambling, but rather the money that would go towards long term investments such as a university fund for kids, retirement fuds, buying a house... is being redirected to gambling and lost

Since most of that money ends up lost, this reduction in net investments ends up becoming a serious net negative for society

Furthermore, households with recent bank overdrafts spend 2x as much on gambling relative to their income, that is, families that are in the hole gamble twice as much, pulling them further into the hole

This worries me because I believe crypto is path dependent, and if a large part of society ends up seeing crypto as net bad because of memecoin's effects or if negative policy against all of crypto is created because of that, we could end up in a situation where the negative effects of memecoins spill over and prevent other ideas such as self-sovereign money or trust minimization from flourishing

Source: papers.ssrn.com/sol3/papers.cf…