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> That is fine if you consider cryptocurrency as an investment. Investment is a misnomer because it doesn't produce or fix anything in the real world, nor pay
by CynicusRex 5y ago
> That is fine if you consider cryptocurrency as an investment.
Investment is a misnomer because it doesn't produce or fix anything in the real world, nor pay dividends. If you invest in a company that 3D prints modular homes you'll get a piece of the profits through dividends. Crypto“currencies” do nothing of the sort. You have to sell to a greater fool to profit. Meanwhile, the originators have trivially created digital tokens from thin air, backed by a mere white paper or faulty proof of concept, and consequently profit wildly by mere shilling. Yes, similar pyramid schemes occur in the stock market as well, which I criticize just as much.
If it's an actual currency then it's not an investment but a conversion.
- chillchurch 5y agoA good number of cryptocurrencies do provide real world value, just because it is not a physical good doesn't mean the value doesn't exist. And many of the cryptocoins are Proof of Stake, or planning to switch to PoS (such as Ethereum). This, besides requiring far less energy than the Proof of Work mining for block validation, allows someone who purchased the coin to gain more coin. By staking coin to assist in the validation of blocks, stakers are rewarded a percentage of the transaction fees as payment. They do not need to buy equipment to mine and effectively earn interest on staked coin. Even if you bought in at the point a coin stabilizes and no longer appreciates, you could still increase your wealth without needing the price of the coin to increase.