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His same argument hold true for stock, everyone cannot cash out at once. So if it is a siren call for bitcoin, then why not for stocks? If everyone wants to con
by kls 9y ago
His same argument hold true for stock, everyone cannot cash out at once. So if it is a siren call for bitcoin, then why not for stocks? If everyone wants to convert from stock X to USD and no one wants to exchange USD to stock X is it not the same issue? How does the fundamentals of stock make it different? The bearish on crypto-currencies will argue that the stock has a fundamental value backed by a company but many market crashes have shown us that in reality that is just faith and that when there is a run to the exists the fundamentals of a stock do not matter. The same could be said for futures but even more so.
- hartator 9y agoYou get dividends from stock.
- grigjd3 9y agoIt's also a thing you own. Stock in Apple is a stake in a company that sells computers. What is the thing bitcoin produces?
- chrisorm 9y agoThe point is that in theory when you buy a stock, it doesn't matter if everybody else in the world thinks the stock is worthless. You can hold the stock, collect the dividend and get your value back if you were correct. Even if the stock goes down, if you were right that the time adjusted returns from the stock exceed the price you paid, you made money. In bitcoin, litterally the only way to get a return is for more people to come in and push the price up more. If bitcoin goes to 1c you cannot get that value back even if you were correct that the "fair value" was above your buy in price.
- hndamien 9y agoThe fair value is based on the usefulness as a currency, which means other people accepting it. If it is withdrawn so much that the price is so low and there are so few believers left, then this is in fact the fair price, and equal to its utility as money.
- conanbatt 9y agoEveryone can absolutely cash out at once from a stock. In fact, in many ways, companies would love that to happen. If a totally believable story hit the market tomorrow that the government will prosecute anyone owning apple stock, the stock might tend to be worth 0 because of it, but apple as a company can re-buy all of them for a very cheap price, and then it would increase its revenue enormously. If bitcoin dropped too much, the network effect could fade to a point it will never be worth mining it again, or used again and some other coin can overtake its role. Much like myspace died after it lost its network effect. Its completely different. The stock will not go to 0 because 1 cent apple stock would be a bargain.