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I don't think it will be possible to predict the future value of a cryptocurrency either, but gold seems to be the proxy for the direction, if not magnitude. Go

I don't think it will be possible to predict the future value of a cryptocurrency either, but gold seems to be the proxy for the direction, if not magnitude. Gold isn't significantly controlled by governments, but due to hoarding, the intrinsic value of gold (by actual consumers of gold) has been outpaced by the trade value of it for decades, if not centuries. As long as inflationary currencies inflate, deflationary currencies will be around. And I would assume that a mathematical guarantee of fixed supply would be more valuable to those people than monetary policy by gold miners. Not that I think bitcoin and others are truly deflationary, as the presence of derivatives and fractional reserve deposits means that overall they could still be inflationary, in the same way that M0 could experience deflation while M2 experiences inflation.

beberlei 9y ago
in terms of metal we have gold, silver, platinum. In cryptocurrencies we have 1000. If cryptocurrencies persist over this current hype, then its still open which of the +1000 ones will be the "gold" and which ones will go to 0.
- saosebastiao 9y ago
  The analogy between an ICO and a stock is pretty apt: they're both tradable contracts. One is enforced via math (as well as luck/naivety), while one is enforced via governments and financial institutions. And a huge portion of those 1000+ cryptocurrencies are really just ICO tokens. I think crypto is in a huge bubble, and I think ICOs are dumb and will eventually die off or be killed off, but saying that there are 1000+ cryptocurrencies is pretty misleading. It would be like saying that due to the various stock exchanges we have millions of fiat currencies. It's only true given a particular definition of cryptocurrency. Outside of ICOs, there are probably only a couple dozen cryptocurrencies that are not piggybacking off of some other cryptocurrency's smart contract infrastructure.
  - beberlei 9y ago
    Even if its much lower, because there is the potential for a new entrant that has better "features" so that demand for the previous coins drops, there will always be risk in holding specific coins. Think disagreement between miners, changes to algorithms, forks of blockchains. Gold does not have the same risk. One nitpick: I think the SEC ruled ICOs to be comparable to certificates from what I understood. This is quite different to stocks. I could be wrong.

beberlei 9y ago

in terms of metal we have gold, silver, platinum. In cryptocurrencies we have 1000. If cryptocurrencies persist over this current hype, then its still open which of the +1000 ones will be the "gold" and which ones will go to 0.

saosebastiao 9y ago
The analogy between an ICO and a stock is pretty apt: they're both tradable contracts. One is enforced via math (as well as luck/naivety), while one is enforced via governments and financial institutions. And a huge portion of those 1000+ cryptocurrencies are really just ICO tokens. I think crypto is in a huge bubble, and I think ICOs are dumb and will eventually die off or be killed off, but saying that there are 1000+ cryptocurrencies is pretty misleading. It would be like saying that due to the various stock exchanges we have millions of fiat currencies. It's only true given a particular definition of cryptocurrency. Outside of ICOs, there are probably only a couple dozen cryptocurrencies that are not piggybacking off of some other cryptocurrency's smart contract infrastructure.
- beberlei 9y ago
  Even if its much lower, because there is the potential for a new entrant that has better "features" so that demand for the previous coins drops, there will always be risk in holding specific coins. Think disagreement between miners, changes to algorithms, forks of blockchains. Gold does not have the same risk. One nitpick: I think the SEC ruled ICOs to be comparable to certificates from what I understood. This is quite different to stocks. I could be wrong.