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I think invest is the wrong term. Investments have some kind of builtin return like interest or dividends. You're buying bitcoin in the same way you buy gold or

I think invest is the wrong term. Investments have some kind of builtin return like interest or dividends. You're buying bitcoin in the same way you buy gold or a lottery ticket. Maybe you have some solid reasoning on why price will go up but you aren't getting any returns like in an investment.

nwah1 9y ago
Very true. The correct term is speculation.
fenwick67 9y ago
Boiled down to the base principles it's the same... money goes in, more money might come out, or you might get less money out. The only difference is predictability and odds.
- RyanCavanaugh 9y ago
  The entire profit motive from Bitcoin "investing" comes from selling it to another human for more than you bought it for. They're digital Beanie Babies. Real investments have a return derived from capital. A house, for example, can be rented out for money. Or a business can earn profit and distribute it to its shareholders. You can try to buy and sell houses like people did during the RE bubble for profit, or try to buy and sell stocks like a day trader, but these are still fundamentally different from an "asset" which has no means by which to generate a return on its own.
  - mcjiggerlog 9y ago
    > Real investments have a return derived from capital. A house, for example, can be rented out for money. You can buy goods and services with Bitcoin. It's just another currency. Do people claim that forex is not investing?
    - root_axis 9y ago
      > You can buy goods and services with Bitcoin. It's just another currency. Not really though. You can buy a few novelties online and there are a handful of places that accept bitcoin, but realistically it is not "just another currency", it's an IOU for usable money.
    - notahacker 9y ago
      Forex trading is certainly more speculation (or hedging) than investment
    - RyanCavanaugh 9y ago
      > Do people claim that forex is not investing? Yes, all the time. It's clearly speculation (in the technical sense)
root_axis 9y ago
> investments have some kind of builtin return like interest or dividends I'd say, more so, the distinguishing factor between an investment and speculation is that an investment is used to facilitate a business process that could potentially create wealth whereas speculation is a bet that something of value will be worth more at a later date.
leggomylibro 9y ago
Although, you can buy ETFs that aim to track cryptocurrencies by buying a basket of them, looking at payment processors, etc. It's like, I think that lithium is gonna be short in the near future. It's really useful stuff. But I'm not buying kilograms of raw lithium to hoard in my garage, I'm investing in the companies that oversee the element's mining, processing, surveying, etc. And maybe looking at commodity options in the short term, but given what happened there with aluminum...
DennisP 9y ago
Suppose I buy gold to diversify my portfolio, because it has a low correlation with the other asset classes I own? Is that an investment? Crypto can play a similar role.

nwah1 9y ago

Very true. The correct term is speculation.

fenwick67 9y ago

Boiled down to the base principles it's the same... money goes in, more money might come out, or you might get less money out. The only difference is predictability and odds.

RyanCavanaugh 9y ago
The entire profit motive from Bitcoin "investing" comes from selling it to another human for more than you bought it for. They're digital Beanie Babies. Real investments have a return derived from capital. A house, for example, can be rented out for money. Or a business can earn profit and distribute it to its shareholders. You can try to buy and sell houses like people did during the RE bubble for profit, or try to buy and sell stocks like a day trader, but these are still fundamentally different from an "asset" which has no means by which to generate a return on its own.
- mcjiggerlog 9y ago
  > Real investments have a return derived from capital. A house, for example, can be rented out for money. You can buy goods and services with Bitcoin. It's just another currency. Do people claim that forex is not investing?
  - root_axis 9y ago
    > You can buy goods and services with Bitcoin. It's just another currency. Not really though. You can buy a few novelties online and there are a handful of places that accept bitcoin, but realistically it is not "just another currency", it's an IOU for usable money.
  - notahacker 9y ago
    Forex trading is certainly more speculation (or hedging) than investment
  - RyanCavanaugh 9y ago
    > Do people claim that forex is not investing? Yes, all the time. It's clearly speculation (in the technical sense)

root_axis 9y ago

> investments have some kind of builtin return like interest or dividends I'd say, more so, the distinguishing factor between an investment and speculation is that an investment is used to facilitate a business process that could potentially create wealth whereas speculation is a bet that something of value will be worth more at a later date.

leggomylibro 9y ago

Although, you can buy ETFs that aim to track cryptocurrencies by buying a basket of them, looking at payment processors, etc. It's like, I think that lithium is gonna be short in the near future. It's really useful stuff. But I'm not buying kilograms of raw lithium to hoard in my garage, I'm investing in the companies that oversee the element's mining, processing, surveying, etc. And maybe looking at commodity options in the short term, but given what happened there with aluminum...

DennisP 9y ago

Suppose I buy gold to diversify my portfolio, because it has a low correlation with the other asset classes I own? Is that an investment? Crypto can play a similar role.