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Is normal stocks any different?
by Freestyler_3 5y ago
Is normal stocks any different?
- singularity2001 5y agoYes, you invest money and (ideally/mostly) they produce wares worth more money. Positive sum.
- drexlspivey 5y agoThat's not what positive sum means. Both stocks and crypto are positive sum though. Whenever someone buys a stock someone else sells it, one's loss is the other's gain. That would make it zero sum but the company has the option to issue new shares, akin to the fed printing money or a new bitcoin being minted in a block, that makes both games positive sum.
- user-the-name 5y agoThe newly issued shares represent a share in the underlying value of the company, which has increased. For cryptocurrencies, there is no such underlying value.
- Freestyler_3 5y agoA company value is part speculation. If everyone sold their stock would the bottom price be high because of inflated value?
- user-the-name 5y agoCryptocurrency value is entirely speculation.
- lottin 5y agoYes, it's different. Owning a stock is like owning a business. Unlike a coin, a business generates a profit. This means you don't have to sell the business to another investor in order to profit from it.
- Freestyler_3 5y agoWhat if you look at a proof of stake coin, where the business is generating profit. And the business buys back coins to bring profit to owners. Also considering staking. Crypto is not all bitcoin copies, it is an evolving concept.
- lottin 5y agoA proof of stake coin is still a coin. It's not a business. A business is an activity consisting in making products and/or services and selling them in the market for a profit. I mean, you can buy a business with a coin, or you can buy an investment product, but that wouldn't be the coin.
- Freestyler_3 5y agoExample: A company creates a coin with a maximum amount of coins, the service they sell is valued by customers, the money from customers is used to buy their own coins back and destroy them. It is not just coins, there are services tied to coins.
- user-the-name 5y agoProof of stake only gives you new coins, not actual value. You may or may not be able to trade those additional coins for value, but that does not matter here.