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> anyone who thinks cryptocurrency is an "investment" is a fool. [...] this is nothing short of pure mania and speculation. Strictly speaking, speculation is a
by eganist 9y ago
> anyone who thinks cryptocurrency is an "investment" is a fool. [...] this is nothing short of pure mania and speculation.
Strictly speaking, speculation is a genuine investment strategy, but it's only appropriate for those with a high risk tolerance.
- blueprint 9y agoThen what is the definition of investment and when you speculate on the price rise of an asset what specifically are you investing in?
- vuln 9y agoPure hype. Hoping you convince more people to buy in and make loads of fake internet money.
- philipov 9y agoA reasonable definition of 'investment' involves the allocation of capital for the purpose of long-term creation of wealth in the instrument being invested in. This should be contrasted with 'speculation', which best applies to short-term strategy that merely seeks to skim alpha off the top of fluctuations in value, without regard to long-term health of the instrument.
- danhak 9y agoThe allocation of capital in anticiption of future cash flows.
- vuln 9y agoYeah that's exactly the type of people the Facebook ads and ICOs targeted. /s
- frgtpsswrdlame 9y agoStrictly speaking I can speculate that the next card in the deck is an ace. Time to invest - Hit! But the point is defining investment so widely as to include this sort of behavior just devalues the term.
- ThomPete 9y agoInvesting in financial schemes is investing by the very definition of the word.
- frgtpsswrdlame 9y agoI think a definition of investing which sees, for example, picking penny stocks as gambling and not investing is more useful. Really it's a gradient and I can't tell you where exactly to draw the line but there's a difference.
- ThomPete 9y agoThat really depends on whether the proponents are right or not.
- frgtpsswrdlame 9y agoI don't think you can define 'investing' in such a post hoc way. A winning poker hand isn't an investment, neither is a good penny stock pick.
- ThomPete 9y agoI don't have to. A financial scheme is an investment and bitcoin is more than that even if it doesn't succeed.
- frgtpsswrdlame 9y agoBut here you're just pushing a bad definition of investment off onto a bad definition of 'financial scheme.' Now we have to figure out what entails a 'financial scheme.' It seems to me that taking my money and putting it on black could be called a financial scheme so we still haven't gotten anywhere in what is and isn't an investment, unless you don't believe in a distinction between gambling and investment.
- jeffdavis 9y agoSpeculating on a commodity is making an estimate of future demand, and buying now, which has multiple perfectly reasonable benefits: 1. Takes some of the commodity off the market, saving it for the later spike in demand. 2. Promotes more aggressive investment now to hopefully provide more supply later. Those benefits offer grounding for the speculation. You can do some calculations to see how well those things might pay off, and make a bid based on that imperfect information. I don't see how that applies very well to any pure "store of value" like a cryptocurrency. How big the spike in demand will be has no bound on the error. Maybe when cryptocurrencies become a medium of exchange it would make more sense.