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Cryptocurrency Is Gambling
- Finnucane 6y agoAll investing is gambling. You’re betting that the price of some asset if going to up in some future span of time. You tell yourself stories to rationalize the relative risk and reward. You hope that this story has some relationship to actual reality. You have probably glossed over some potential downsides because of greed or ideology. Maybe it will work out, maybe not.
- valuearb 6y agoA true investment has an intrinsic value based on the stream of cash it generates for its owner. That’s “investing”. No crypto currency has any intrinsic value because none gave predictable future cash flows. Buying them is gambooling or “speculation” trying to predict short term price changes. Note that u belief cryptocurrencies have utility as a medium of exchange, just not intrinsic value.
- willio58 6y agoWebster definition of investing: “to commit (money) in order to earn a financial return” I think your definition of a true investment is more of an opinion than actual fact.
- deleted 6y ago[deleted]
- valuearb 6y agoWho knows more about investing, the editors at Webster’s or Warren Buffett?
- phyalow 6y agoWrong on your point RE FCF, you would be surprised - go and check out Aave it is a decentralized money market - running on USDC (amongst other assets), it generates cash by lending over collateralised loans which gives the depositors a large cut of the fees it takes. The point of an overcollateralised loan is synthetic leverage, or shorting.
- valuearb 6y agoIt appears to be the most technologically advanced Ponzi scheme ever.
- mgh2 6y agoGambling vs. investing https://www.investopedia.com/articles/basics/09/compare-investing-gambling.asp#:~:text=True%2C%20investing%20and%20gambling%20both,and%20over%20the%20long%20run https://www.investopedia.com/articles/basics/09/compare-inve....
- Finnucane 6y agoYes, that is one of the stories people tell themselves. Brokers can trade assets on the timescales of small fractions of seconds. It is even more fleeting than the casino. At least in Vegas you might get some free drinks.
- lxgr 6y agoYes, there are various levels of risk both in the market and in a casino, and there are quick ways to lose everything in either if you set your mind to it. But the main difference is that in an economy with a general upwards trend, everyone has a decent chance of leaving with more than they entered with. In a casino, every single game has the odds stacked against you. It's a zero-sum game.
- Finnucane 6y agoYou think Wall Street isn’t stacked against you?
- lxgr 6y agoFor long-term investing? No. Yes, maybe I lose a few basis points to HFT at each buy and sale, and maybe somebody is getting rich off those pennies in aggregate. But that's largely irrelevant to me as a buy-and-hold investor. And yes, it probably means that individuals "trading" on Robinhood lose on average. By definition, not everyone in the market can beat the market, and my empathy here is limited: Not everybody has to be a daytrader.
- ffggvv 6y agoimo that’s oversimplified and drastically minimizes the difference between someone buying gamestop and someone buying a high dividend, high revenue stable company that’s been around 100 years. or he’ll even buying a bond
- Finnucane 6y agoMany of those stable companies became quite a bit less so c.2008 and only survived because of bailouts.
- ffggvv 6y agoyour comment makes it sound like it was a high proportion of companies when it was really just some high profile names in a few industries
- Finnucane 6y agoReally? How many 100-tear-old companies are still stable and paying dividends? What's the survival rate for businesses over that time span?
- donsupreme 6y agoNot sure whether it's gambling or not. But when you look at the half the crypto from the top 50, most of them I don't think they will ever have any realistic level of real world adoption. They all sell some pipe dreams of future DeFi this or future IOT smart contract, etc. Sounds pretty much like just cherrypicking some niche area of use case just for the sake of differentiation, yet somehow it's worth billions of dollars in market cap. How about just focusing on delivering a p2p crypto payment that is actually cheap, fast and preferably eco-friendly like what Satoshi envisioned in the first place?
- IntFee588 6y ago> just cherrypicking some niche area of use case just for the sake of differentiation, yet somehow it's worth billions of dollars in market cap. If only there was a company that financed such ventures.
- lxgr 6y agoI can't imagine that all these countless coins would have been able to get VC funding. Retail investors are usually not the best at due diligence, and the current situation (economical and psychological) certainly isn't helping.
- Priem19 6y ago>How about just focusing on delivering a p2p crypto payment that is actually cheap, fast and preferably eco-friendly like what Satoshi envisioned in the first place? https://www.chia.net https://www.chia.net seems to be a promising candidate to deliver that vision. I read their “green paper” and watched some interviews, and they seem to have jumped through the regulatory hoops already, in the hope to become a legitimate use case for institutions and governments. Also, it's founded by Bram Cohen, the inventor of the BitTorrent network.
- tetsuto 6y agoYou should check out Nano - it’s one of the few cryptocurrency systems that works for this. Instant payment, scales well, doesn’t use a standard block system (uses a block lattice instead), doesn’t rely on mining so is extremely green.
- robotcookies 6y agoI think comments like this dismiss all the people who are using bitcoin for actual, good reasons. They are mostly in developing nations which is why they seem to be getting ignored. There are people who otherwise have to pay very high cross-border transaction costs or can't get a bank account and have real utility for using bitcoin. It would be like going to a drag race and claiming "cars are gambling". It ignores all the people using cars for commuting to work, getting groceries, etc. How about re-phrasing this to "cryptocurrency speculation is gambling"?
- deleted 6y ago[deleted]
- mgh2 6y agoSome demographics data https://www.forbes.com/sites/ronshevlin/2020/07/27/the-coronavirus-cryptocurrency-craze-whos-behind-the-bitcoin-buying-binge/?sh=3d8491f82abf https://www.forbes.com/sites/ronshevlin/2020/07/27/the-coron...