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>> Can't the same be said for people who bought Apple or Google stocks early on? > Ownership of a stock is a claim on the net value and future profit of the co

by smokeyj 15y ago

>> Can't the same be said for people who bought Apple or Google stocks early on? > Ownership of a stock is a claim on the net value and future profit of the company. Ownership of currency is a claim on the net value and future profit of the currency. How does this address OP?

barrkel 15y ago
In principle, you're right, currency is just traded like anything else; but the fundamentals are different. A company is (presumably) engaged in profitable production (the future profit, i.e. it does something) and is composed of various capital assets (the net value, i.e. it has something). A currency has neither attributes; its claim on future production and assets is only valid in so far as people have confidence in it and will take it in exchange for other things. A share, meanwhile, is a direct claim on things themselves.
- scott_s 15y ago
  I've found your economic explanations a breath of fresh air in this thread. Thanks.
- smokeyj 15y ago
  I understand currency and shares are not the same thing, I don't understand this addresses OP. > A share, meanwhile, is a direct claim on things themselves. What if you buy a share of an ETF?
  - tg3 15y ago
    A share of an ETF is a claim on a financial asset that is backed by claims in other financial assets, usually stocks. So while it is one level higher than directly owning securities, it is still a claim on productive economic assets.
    - smokeyj 15y ago
      For the sake of preventing a tautological melt-down could you define "securities"?
- cookiecaper 15y ago
  Currency can have its own features that make it worthwhile. No matter what happens with btc's popularity, as long as I have one other party to trade with, some features will be available to me through btc that are not available through normally denominated national currencies. Can't I buy btc because I think these are valuable features and their desirability will drive interest and users, just like I would buy Google because the desirability of its features drives interest and users?

by smokeyj 15y ago

barrkel 15y ago

In principle, you're right, currency is just traded like anything else; but the fundamentals are different. A company is (presumably) engaged in profitable production (the future profit, i.e. it does something) and is composed of various capital assets (the net value, i.e. it has something). A currency has neither attributes; its claim on future production and assets is only valid in so far as people have confidence in it and will take it in exchange for other things. A share, meanwhile, is a direct claim on things themselves.

scott_s 15y ago
I've found your economic explanations a breath of fresh air in this thread. Thanks.
smokeyj 15y ago
I understand currency and shares are not the same thing, I don't understand this addresses OP. > A share, meanwhile, is a direct claim on things themselves. What if you buy a share of an ETF?
- tg3 15y ago
  A share of an ETF is a claim on a financial asset that is backed by claims in other financial assets, usually stocks. So while it is one level higher than directly owning securities, it is still a claim on productive economic assets.
  - smokeyj 15y ago
    For the sake of preventing a tautological melt-down could you define "securities"?
cookiecaper 15y ago
Currency can have its own features that make it worthwhile. No matter what happens with btc's popularity, as long as I have one other party to trade with, some features will be available to me through btc that are not available through normally denominated national currencies. Can't I buy btc because I think these are valuable features and their desirability will drive interest and users, just like I would buy Google because the desirability of its features drives interest and users?