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Financially, cryptocurrency is pretty much exactly like having stock in a long bankrupt company. You can trade it with other people, you can create contracts a
by tveita 5y ago
Financially, cryptocurrency is pretty much exactly like having stock in a long bankrupt company.
You can trade it with other people, you can create contracts and derivatives involving it. What you can't do is ever get anything of value from holding the stock itself.
This is easy to value, but some people are uncomfortable with the answer. With so much hype and magical thinking, it feels like there most be something meaningful behind it. Repeat it enough and the dogma gradually becomes a truth you can build anything on top of.
And since the company is already bankrupt and all the assets are stripped, it is immune to news that will force the traders to reevaluate and dispel the illusion. The company can't go any more bankrupt, so the traders are looking around at each other and seeing everyone else continuing to trade thousands of dollars for shares of nothing, so they shrug and think "if someone paid a thousand dollars for this today, they will probably be willing to do so tomorrow as well".
- helloworld11 5y agoWhat a completely nonsensical comparison. There are plenty of valid criticisms of crypto speculation and the underlying assets, but this is just hateful posturing painted up as sophisticated opinion.
- evandwight 5y agoWhat are your feelings on gold?
- BongoMcCat 5y agonot op, but if bitcoin existed 1000 years ago, it would probably have replaced gold as a generic currency. And while one might argue that the reason that gold is valued today is because of historic reasons, that it has been accepted as something of value almost everywhere for a very long time.. Now, if this wasn't the case, and someone would have proposed today that we should make this metal a currency just because it is limited in supply and very easy to recognize, I would probably feel the same way about gold as I do about bitcoin.
- robcohen 5y agoI think this analogy is almost correct, but it's better to think of crypto as owning a deed to land. You can in fact hold on to it and trade it, but at the end of the day all you are doing is changing the name on the deed. The land stays the land. You can put a house on it (store tokens), or you can build a factory (smart contracts), but the only reason why it has any value is because some other person may want to put a house or build a factory on it. Land has no intrinsic value because it can never truly be owned. It will outlast us all.
- gizmo686 5y agoA land deed gives you the right to have people with guns enforce your will on others who would use that land; and limits the amount that those same people with guns would interfere with your abilith to use that land. Further, in practice, most owned land is near immidietly turned into something that provides direct value. Be it shelter, or widgets.
- BongoMcCat 5y agoso, almost correct, but at the same time the exact opposite? If land has no intrinsic value, what does?
- SQueeeeeL 5y agoI feel like this time of analogy is the exact type of magical thinking the parent post identified.
- lostmsu 5y agoComplete bullshit. First, even "financially" (thought what does it even mean???) holding crypto is not the same as holding a stock of a bankrupt company. Bankruptcy is a process with many mandated "financial" steps with set dates none of which are required from crypto. Second, there are things beyond "financiality", such as easiness and reliability of "creating a derivative", and finding a buyer for it. So the premise of the whole comment is 100% useless in reality.
- walkhour 5y agoThe fundamental problem of any such criticism of crypto is explaining then how crypto is different from gold besides "some people value gold also because of intrinsic value". Why is gold not exactly like having stock in a long bankrupt company? If gold is indeed like crypto, then when is this gradually built dogma finally going to be exposed? Holding gold would've been good investment advice almost in any civilization.
- Youden 5y ago> is explaining then how crypto is different from gold besides "some people value gold also because of intrinsic value". You say this as if having intrinsic value isn't enough?
- Lazare 5y agoVery similar arguments can be made about gold. And have been! And the fact they have been wrong until now is not necessarily a good predictor of the future. In any case, there is one key thing which differentiates gold from crypto - there's only one kind of gold, and there's only a very small number of metals with similar properties to gold - perhaps 8 in total, all of which have been valuable since mankind figured out how to extract and work them, and none of which are exact substitutes for gold. Gold and gold-like metals are scarce! Crypto is not scarce. Any one coin can be, but even if we, as a society, decided that, say, shiba inu themed crypto coins are our core store of value, there are multiple shiba inu themed coins already extant, and it is trivial to make infinite more. Even if we pick a single coin like Bitcoin (and why would we?), there are currently something like 45 currently active forks, all claiming to be the one true best Bitcoin. Gold is valuable because it is unique and differentiable. (That is, if you want something like gold, you need to buy some gold, because nothing else is quite like it.) Litecoin is valuable because...?
- redwood 5y agoGold has also stood the test of time in a way unique to our human culture
- mraudiobook_com 5y ago
- authed 5y ago> Repeat it enough and the dogma gradually becomes a truth you can build anything on top of. That's what people that don't understand it hope.