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> If you confuse cryptocoins with stocks and shares in Companies with real world assets and obligations like Apple you're in for a dear surprise. > Cryptocoins

> If you confuse cryptocoins with stocks and shares in Companies with real world assets and obligations like Apple you're in for a dear surprise. > Cryptocoins are reproducible software databases. Production and minting of the supply is trivial. Educate me then; because when it comes to tech stocks, and especially pure software based tech stocks like TWTR which pay no dividend that I'm aware of, I'm unsure what investors really think they're getting which is meaningfully different from cryptocurrency. When you invest in Bitcoin, you're investing in Greg Maxwell and the usual suspects of Bitcoin-land. When you invest in Ethereum, you're investing in Vitalik Buterin and the usual suspects of Ethereum-land. Maybe it's a bit more dynamic than this given the lack of official titles and the ability for new actors to come and muscle out old actors, but ultimately there's always a mutually shared profit motive and organizational structure behind any given cryptocurrency. The coins you buy are effectively bearer shares on steroids, because they're exactly like traditional bearer shares in spirit and in form. IMO it isn't very useful to pidgeonhole cryptocurrency as a mere software database, when investors are in practice investing in the teams backing the software (see: above). The leadership/management team behind the coin develops the coin's ecosystem, and spearheads user adoption. It's basically like a startup. To this end, one standout example is the cryptocurrency Decred, which features a passive income stream component for investors along with a shareholder voting component. Decred's coins can be thought of as publicly traded shares in a company like Stripe, only in bearer form and built on the blockchain. The more applications built on top of Decred, the higher the transaction volume on Decred, the more valuable Decred becomes. Is this really so different from how tech stocks work?

0wing 9y ago
There's no "investing" in crypto-assets. Investing means you would make money from the activity of an underlying enterprise, but with cryptocoin software you're simply buying a number in a database that someone else already created. With each new block the supply inflates more. Sometimes the supply is premined. Often blockchain "startups" tokenize their service, which would be like if Gmail started asking for payments in gift cards but worse because the service or product doesn't even exist yet. Most of these database tokens were created for little to no effort (see the 10,000BTC pizza). Risks like Bitfinex/Tether [1] collapsing, or the unregulated exchanges manipulating prices along with those large stake holders cashing out could easily evaporate the price far below what the last few weeks have seen. Market confidence could be lost and it would be incredibly hard to regain because database coins have no inherent value beyond the hope that you'll find another buyer. [1] https://medium.com/@bitfinexed/latest https://medium.com/@bitfinexed/latest https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/ https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/ https://www.youtube.com/watch?v=6r04gfWfRkE https://www.youtube.com/watch?v=6r04gfWfRkE
ric2b 9y ago
> and especially pure software based tech stocks like TWTR which pay no dividend that I'm aware of, I'm unsure what investors really think they're getting which is meaningfully different from cryptocurrency. They're getting a claim to part of the companies assets, which will be liquidated and distributed if it goes bankrupt (after paying the debtors). They can overpay for that right, of course, but they're not getting 0 out of the deal.

0wing 9y ago

There's no "investing" in crypto-assets. Investing means you would make money from the activity of an underlying enterprise, but with cryptocoin software you're simply buying a number in a database that someone else already created. With each new block the supply inflates more. Sometimes the supply is premined. Often blockchain "startups" tokenize their service, which would be like if Gmail started asking for payments in gift cards but worse because the service or product doesn't even exist yet. Most of these database tokens were created for little to no effort (see the 10,000BTC pizza). Risks like Bitfinex/Tether [1] collapsing, or the unregulated exchanges manipulating prices along with those large stake holders cashing out could easily evaporate the price far below what the last few weeks have seen. Market confidence could be lost and it would be incredibly hard to regain because database coins have no inherent value beyond the hope that you'll find another buyer. [1] https://medium.com/@bitfinexed/latest https://medium.com/@bitfinexed/latest https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/ https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/ https://www.youtube.com/watch?v=6r04gfWfRkE https://www.youtube.com/watch?v=6r04gfWfRkE

ric2b 9y ago

> and especially pure software based tech stocks like TWTR which pay no dividend that I'm aware of, I'm unsure what investors really think they're getting which is meaningfully different from cryptocurrency. They're getting a claim to part of the companies assets, which will be liquidated and distributed if it goes bankrupt (after paying the debtors). They can overpay for that right, of course, but they're not getting 0 out of the deal.