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> So, is this the new revolution in fund raising or another pyramid that is soon to explode? Everything is a pyramid. The question is just for how long it last
by erikb 9y ago
> So, is this the new revolution in fund raising or another pyramid that is soon to explode?
Everything is a pyramid. The question is just for how long it lasts. I mean there was a pyramid called monarchy that ruled the planet for a few centuries. There's capitalism which will be replaced by something else, maybe 20 years, maybe 500 years from now. Instead of worrying about the pyramid-ness of something it's much smarter to decide whether or not it is currently under- or overvalued and what the trend will be.
And here starts my opinion: I think crypto coins are currently way overvalued. They exist for longer now than most people spend in university. And yet a real market value hasn't been established yet. The one possible true market value, micro transactions, seems to have been overcome by simple small step technological evolution. It was a huge thing around 2010 that nobody could do, but now it's common to pay sub-dollar prices on all kinds of things online.
Also opinion: The reason why people are willing to spend so much money on ICOs is that they hope the bitcoin dream will repeat itself. And as is often the case: if the dream is strong enough, it seems to get fulfilled, because so many people pour their money and energy into this hope. But I don't see what there is besides the hope.
Many people will be disappointed when they find out there wasn't much besides their own self-illusions.
- dave_sullivan 9y ago> a real market value hasn't been established yet. The one possible true market value, micro transactions, seems to have been overcome by simple small step technological evolution. A real market value, in the sense that "something is worth what someone will pay for it", has been established. There's just a lot of people scratching their heads about it. What's the real market value of diamonds? Or gold? In the apocalypse, you can't do anything with either, but I think you'd have a hard time making the case that there's no "true market value" to these goods, even if you find their utility dubious.
- erikb 9y agoYes, diamonds are such a pyramid that is kept alive by pure market controlling efforts like monopoly and advertisment, just like crypto coins. Gold however has some market value by being impossible to artificially create, by being limited, by being hard to come by and by being hard to transport, all combined in one item. Yes, you concluded correctly that I see a strong relationship between market value and utility. I'm not sure if market value is the correct word for it, though. English is not my native tongue. There are two values a product has. One is trade value, the other is what you call utility. I believe the trade value of crypto coins exceeds their utility a lot. And I believe they have nearly no utility at all, because otherwise it would have shown by now what the utility is. I also believe it's totally possible that trade value can be kept high without utility for a long time, thus "people are willing to pay a big price for it for a few years" is not a proof of utility to me.