The Gamestop saga & its brothers & sisters in the centralized world
Centralization sucks. That’s why centralized everything is ending.
This article is a walk-through of the failing points of centralization that currently govern our daily lives, issues that have long been boiling in our minds and hearts for a long time and finally reached a breaking point — revealed with the help from the $GME drama and the WSBers behind it.
That’s right, the problems revealed by the GME-WSB saga — if you’re new to the party — are long-standing issues that have favored the assholes and screwed over regular folks over and over. If you didn’t know, you now need to know.
So what’s the story. Well, it all starts with something called market volatility, and this is what it looks like:
The price chart is from Bitcoin, but it can be anything as long as you see those big rises and dips. They are market volatility. With price fluctuations of several 100% being normal, cryptos are famous for their extreme market volatilities.
Now, with volatility comes uncertainty and risk, and that’s bad for making money. But here’s the twist, although as an individual retail investor, you may not have much risk-hedging capacity, institutional investors have a good way to avoid their exposure to market volatility —and it’s really genius once you know how it works.
And here’s where the media comes in.
In the secondary market, a lot of stock activities center around information. It could be a news piece, a company’s quarterly report, or a live interview with an industry leader. Market responds to this information. Whoever has access to the information first gets a first-mover advantage on making a profit. But who gets to decide what information to release to the market?
Simple answer: whoever controls the media channel which releases the information.
It makes sense, right? Positive information causes a positive price movement on the stock market and negative information causes the reverse. A lot of times government policies are the information, and that’s why many policymakers make a lot of money in the stock market — because they are the ones who determine the information prior to its release in the media.
And ever wonder who the media represents? For one, they’re not elected. So they don’t represent the public. That’s why they’re called corporate media. Because they are companies owned by shareholders who want to maximize profits. And if the people who own the media channel and the investment institutions are the same guys? You got the idea.
These people, with both the information channel and the capital, can influence the direction of market volatility and market momentum takes care of the rest.
When market momentum finishes, institutions have pulled out with profits from the retail investor. One chapter of market volatility ends. Genius…
But what if somehow the retail investors bet on the right direction of the market and are winning a lot of money. This happens a lot, especially in a highly volatile market like… crypto. You have this:
And this…
So the system always needs maintenance during highly volatile market conditions… Rings a bell?
Yep. Robinhood just did it with GME. They literally shut down the trading service:
Again, when institutions are taking huge losses already, they probably would want to limit further losses right?
And here’s another twist: because the stock market is less volatile compared to the crypto market relatively speaking, this kind of service shutdowns happen less often, but boy once it happens, the buzz is way louder and people see the problem much more clearly than if it happens in the crypto market.
Oh, one last thing. You can’t complain about it on the app store where problematic apps like Robinhood is listed either. The app store is also centrally controlled:
So what’s the problem:
Centralized media where only corporate voices are broadcasted.
Centralized finance where only institutions are allowed to make money.
Centralized software platforms where users are not respected.
Remedy?
Decentralize everything.
Soft pitch here: that’s why you should join defi & crypto— decentralized finance to start the change.
