When did stocks become boring?
December 27, 2017•1,266 words
A friend of mine is experimenting with a podcast, and at the end of one such experiment (and coming from a finance background), he gave out some tips on stocks you should look into. And while I was listening to that segment, I felt something strange that hadn't materialized so directly in me before: A strong disdain for stocks and stock markets in general.
Psht, stocks. I thought it was normal, but after reflecting on it later in the day, I thought, when did that happen? When did stocks become boring?
I’ll speak for myself and say: very, very recently. And cryptocurrencies have all to thank for it. Compared to cryptos, the stock market feels so incredibly outdated. It’s like trying to use Netscape today to gain access to information.
What gives that feeling? It’s a combination of things. Stocks seem to carry with it the feeling of “old money”, and as strict as the SEC may be on insider trading, there’s no way a board room full of old rich men are behaving morally when all incentives require them not to. So there’s a sense of general distrust that permeates the whole thing. “Sell the news,” they say, as if it’s wisdom, when really it means that insiders always take their cut long before anything ever makes its way to you.
Then there are the exchanges themselves. I’ve dabbled with stocks since I was thirteen, but never got anything to show for it. I purchased a few shares of Tesla some years back on Robinhood—but what do I really own? I haven't received any stock certificates. My ownership in Tesla is just a number in Robinhood’s system, which you are eventually beggingly at the mercy of. Just recently, Robinhood informed me that I needed to upload a photo of my social security card in order to do anything with my shares of Tesla. This is the second time they’ve locked my account without notice. And given how exciting and attractive cryptocurrencies have become to younger people, my best bet is Robinhood will struggle to acquire the users they’re after and very soon shutter its doors.
With crypto, I don’t need anyone’s permission. I receive full ownership of the private keys, and I own them forever. No one can take that away from me, even if the government sends armed agents to my door. Obviously, I’d be wise to cooperate, but the point is, I don’t have to. So there is a large political cause of freedom and the right to personal property found in crypto that is not found in stocks and traditional banking.
Stock markets also represent a brutal philosophy of growth that I simply cannot support. Companies which are publicly traded become slaves to their next quarter earnings report, instead of focusing on long term health and sustainability. It’s a culture of unquenchable thirst and ravenous, destructive hunger. The “growth at all costs” mentally is just not something I want to be a part of or contribute to.
All of this contempt for the public markets has grown silently within me for the past couple years, and it may be latent within you too. Cryptocurrencies are as much a counter-cultural revolution as they are a bank-replacing technology. Almost everything is democratized, and the people behind it almost never wear suits. Compare that to the fundamental pillar of our crony capitalist system that is the public markets, dominated by 1%ers who continue to wreak havoc on our shared ecosystem and politics, and it’s easy to see why stocks feel so unglamorous as of late.
Aside from the volatility and potential gains to be had from either stocks or cryptocurrencies, I generally feel safer having my money in crypto rather than held and managed by suits at a bank or brokerage. I have no reason to hide from my government, but I have had my PayPal account frozen enough times for no apparent reason to grow distrustful of centralized systems.
The question to be asking is, if you had $200,000 of hard earned money that you wanted to protect, where’s the best place to put it?
Well, under your mattress sounds pretty great, since you could always keep an eye on it and sleep right on top of it. But, you become an easy target just waiting to be robbed. Not to mention it loses value every year it sits collecting dust.
You could put it in a bank. But then you have to trust Bank of America to not be a douche about your money. They can freeze your assets any time they please, and prevent you from withdrawing so much as a dime, especially if done at the behest of the U.S Government. You might say, “I earned that money legally and have no reason for concern.” Try telling that to PayPal. I have little doubt, given your innocence, that you will eventually regain access to your funds. But just the fact that other self-interested parties have that much control over my hard earned money is great cause for concern, especially when there are alternatives available without these downsides. Oh, and you’re only insured up to $100,000.
You can place your money in the stock market, but, that’s susceptible to exactly the same concerns as banking: You don’t really own anything, and it can be seized by your government at any time.
(You can also buy $200k worth of gold, but that falls into the same category as the perils of storing physical cash.)
What remains is the wonderful world of crypto. As long as you own your private keys, no one in the world can take your money away from you. You can’t be robbed. The funds can’t be frozen with the strike of a gavel. And, while this is mostly irrelevant, you might even quadruple your money in a few years time. The risk is of course the volatility of daily prices, but I’m not particularly worried about that.
There’s a lot of talk about the impending crypto bubble, but, given the viral peer-to-peer nature of it all, I’m hard-pressed to come up with any one scenario where the crypto system as a whole is destroyed. Sure, short term pops are inevitable, but on the long term, try to think of any one event that can permanently shatter a system like this.
There are only two crypto-shattering events that I can think of:
A dystopian society where access to the internet is prohibited.
The collapse of cryptography as a whole, ushered possibly in part by the advent of molecular and quantum computing. I’m not particularly troubled by this, as its arrival will be seen from at least a mile away, giving us ample time to redesign our systems to take advantage of quantum cryptography. I realize that disruption is usually revolutionary and not evolutionary, and doesn’t always give us time to react, but cryptography is too fundamental of a utility in our ecosystem for us to not be paying wildly close attention to it.
Of course, the government can try to ban cryptocurrencies, at which point, it would be prudent to start buying more of it.
Barring these circumstances, I think crypto goes on and infiltrates every aspect of our lives. This isn’t some new insight, as the optimism is already reflected in the price, but more of an invitation: consider putting away your doubt and fear, and instead find ways to contribute to this new system of independence.
The money is now flowing from the old to the new. The future is as exciting as it’s ever been.