4 ms·

Ask yourself what exactly is behind that “~550B”. The answer is nothing but faith. You are comparing the market cap of cryptocurrencies to NASDAQ, a portfolio

Ask yourself what exactly is behind that “~550B”. The answer is nothing but faith. You are comparing the market cap of cryptocurrencies to NASDAQ, a portfolio of the highest profit driving, real asset laden companies on earth. How is this even remotely realistic?

adamnemecek 9y ago
All investment is just faith to a certain degree. I own stock that could also go to zero over night. So do many other people. Bitcoin will enable many more exchanges that weren't possible before.
- aphextron 9y ago
  And here is the inevitable “all money is just faith” argument. Investing has nothing to do with faith, that’s called speculation. Investment is based on sound financial principals of expected future return based on debts and cash flow, where actual value is being created and added to the economy. This is mania.
cableshaft 9y ago
Everything is based on faith to a certain extent. None of us (that I'm aware of) have crystal balls that see the exact future. Even companies that have lots of assets behind them could potentially make catastrophic fuck ups that tank their stock (i.e. BP and their Deepwater Horizon spill) in an instant.
- ohitsdom 9y ago
  I think you see the point the parent comment was making. Even if BP makes a colossal mistake and their stock dives, at the very least they can sell of their real physical assets. Crypto can actually dive to zero, there is no safety net since there are no physical goods.
  - chrisco255 9y ago
    Crypto as a whole going to zero? It would only go to zero if there was zero utility. Whether or not the market is overvalued at the present, there's plenty of value there.
- acdha 9y ago
  Look at the BP chart: yes, it dipped but having a real business meant that it didn’t go anywhere near zero and came back up. Something based on faith can drop all the way to zero and stay there because e.g. everyone bailed to something else and there was no reason to come back.
  - adamnemecek 9y ago
    Do we have to have a discussion about the value of non-physical things? "If everyone stopped using google tomorrow, their stock would go to zero. Investing in google is based entirely on faith." Do you agree with this statement?
    - acdha 9y ago
      That's overly simplified: Google's stock value is based on a history of successfully competing in advertising and receiving billions of dollars, based on their ability to deliver products which billions of people use and many are willing to sign contracts or make ongoing payments for. Yes, there's some faith involved in assuming that the advertising market won't change overnight or that Google won't suddenly stop being able to compete effectively but that's orders of magnitude less than the level of faith needed to justify the current valuations, especially when the argument is not just that despite being unproven cryptocurrencies are certain to become mainstream but going further to say that a specific unproven implementation is going to win.
  - cableshaft 9y ago
    I looked at it before I made the post. They went from $60 a share to ~$27 a share in the aftereffects of the spill. It was an example of how these companies with great assets could still lose you money due to unexpected circumstances. I'm not asserting it went to zero. They've actually recovered quite a bit, probably due to the goldfish-like memories of the general public and the moral apathy of most investors. That's kind of my point, really. If crypto goes low enough, especially if the price is down for no good reason (i.e. it's based on a single country in the entire world cracking down on it, not because the tech stopped being useful or interesting), there will be investors who will think it's underpriced and will jump back in, which will bump the price and draw more people back in, etc etc etc. Bitcoin went through exactly this in 2013-2015. It kept dropping and dropping and dropping, all the news was terrible for it, but it never dropped to zero because there was enough people who thought it was underpriced and bought and held, waiting to see if it would go back up. And boy, if they held through last year, those people won big time.
- overhang 9y ago
  So cryptocurrencies are like Enron? Too big to fail? Too useful? Too what? Can I interest you in a Venezuelan bolivar fuerte. There are 30,000,000+ people vested in it. There are billions of USD worth of them out in the world. What could possibly go wrong?
- rlucas 9y ago
  BP's spill is not a great example of the evanescence of traditional industry. Despite the "catastrophe" you reference, their market cap is still $130 B and they pay out 5% in dividends... (In fairness, there's a lot of faith involved in your broker doing the trade in BP, the ADRs if applicable, the DTCC holding your actual shares, etc., but not a lot of faith required to believe that thousands of people are actually drilling useful shit out of the Earth for BP's owners.)

adamnemecek 9y ago

All investment is just faith to a certain degree. I own stock that could also go to zero over night. So do many other people. Bitcoin will enable many more exchanges that weren't possible before.

aphextron 9y ago
And here is the inevitable “all money is just faith” argument. Investing has nothing to do with faith, that’s called speculation. Investment is based on sound financial principals of expected future return based on debts and cash flow, where actual value is being created and added to the economy. This is mania.

cableshaft 9y ago

Everything is based on faith to a certain extent. None of us (that I'm aware of) have crystal balls that see the exact future. Even companies that have lots of assets behind them could potentially make catastrophic fuck ups that tank their stock (i.e. BP and their Deepwater Horizon spill) in an instant.

ohitsdom 9y ago
I think you see the point the parent comment was making. Even if BP makes a colossal mistake and their stock dives, at the very least they can sell of their real physical assets. Crypto can actually dive to zero, there is no safety net since there are no physical goods.
- chrisco255 9y ago
  Crypto as a whole going to zero? It would only go to zero if there was zero utility. Whether or not the market is overvalued at the present, there's plenty of value there.
acdha 9y ago
Look at the BP chart: yes, it dipped but having a real business meant that it didn’t go anywhere near zero and came back up. Something based on faith can drop all the way to zero and stay there because e.g. everyone bailed to something else and there was no reason to come back.
- adamnemecek 9y ago
  Do we have to have a discussion about the value of non-physical things? "If everyone stopped using google tomorrow, their stock would go to zero. Investing in google is based entirely on faith." Do you agree with this statement?
  - acdha 9y ago
    That's overly simplified: Google's stock value is based on a history of successfully competing in advertising and receiving billions of dollars, based on their ability to deliver products which billions of people use and many are willing to sign contracts or make ongoing payments for. Yes, there's some faith involved in assuming that the advertising market won't change overnight or that Google won't suddenly stop being able to compete effectively but that's orders of magnitude less than the level of faith needed to justify the current valuations, especially when the argument is not just that despite being unproven cryptocurrencies are certain to become mainstream but going further to say that a specific unproven implementation is going to win.
- cableshaft 9y ago
  I looked at it before I made the post. They went from $60 a share to ~$27 a share in the aftereffects of the spill. It was an example of how these companies with great assets could still lose you money due to unexpected circumstances. I'm not asserting it went to zero. They've actually recovered quite a bit, probably due to the goldfish-like memories of the general public and the moral apathy of most investors. That's kind of my point, really. If crypto goes low enough, especially if the price is down for no good reason (i.e. it's based on a single country in the entire world cracking down on it, not because the tech stopped being useful or interesting), there will be investors who will think it's underpriced and will jump back in, which will bump the price and draw more people back in, etc etc etc. Bitcoin went through exactly this in 2013-2015. It kept dropping and dropping and dropping, all the news was terrible for it, but it never dropped to zero because there was enough people who thought it was underpriced and bought and held, waiting to see if it would go back up. And boy, if they held through last year, those people won big time.
overhang 9y ago
So cryptocurrencies are like Enron? Too big to fail? Too useful? Too what? Can I interest you in a Venezuelan bolivar fuerte. There are 30,000,000+ people vested in it. There are billions of USD worth of them out in the world. What could possibly go wrong?
rlucas 9y ago
BP's spill is not a great example of the evanescence of traditional industry. Despite the "catastrophe" you reference, their market cap is still $130 B and they pay out 5% in dividends... (In fairness, there's a lot of faith involved in your broker doing the trade in BP, the ADRs if applicable, the DTCC holding your actual shares, etc., but not a lot of faith required to believe that thousands of people are actually drilling useful shit out of the Earth for BP's owners.)