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That's partly true of the stock market too. We literally educate our kids about the stock market in economics class. We are constantly getting new people to dum

That's partly true of the stock market too. We literally educate our kids about the stock market in economics class. We are constantly getting new people to dump money into the stock market. Sure, if a company increases revenue the stock price tends to go up. However, there is no requirement that it does so. It tends to do so because people feel the stock has become more valuable. Same thing with Bitcoin, except things other than revenue cause people to feel like it has more value.

root_axis 5y ago
It's not the same thing at all. Stocks confer legal ownership of a productive enterprise so it makes sense that stock price increases when revenue increases; if the enterprise produces more revenue than a stake of ownership is worth more.
- serverholic 5y ago
  There is no requirement that stock price behaves in this way. There is a large speculative component and also a ponzi element (my first point) in the stock market system. "It's not the same thing at all" makes no sense. I'm describing how there are shared elements to both systems. > if the enterprise produces more revenue than a stake of ownership is worth more. And there are many things that a crypto can do to increase its value, for example: 1. Switch to a more efficient algorithm (PoW -> PoS). 2. Increased network effects. 3. Running for a longer time without hacks or the network going down. 4. More projects being built on top.
  - root_axis 5y ago
    > There is no requirement that stock price behaves in this way. Obviously... but the reason you use the language "not a requirement" is because everyone knows that's typically how it works. Obviously there are various factors that impact a stock price, but pretty much all of them are a function of expected future revenue. If Apple were to announce a VR product line tomorrow, the stock price would instantly climb because investors would make a judgement that this new product will generate future revenue. With cryptocurrencies this dimension does not exist. > And there are many things that a crypto can do to increase its value, for example Even if we grant that these things might amplify the utility of a cryptocurrency, it still doesn't change the fact that buying cryptocurrency does not facilitate productive work, it's merely an exchange of value between two people, no wealth is created. When you invest in a company, you're giving it fuel to grow and create wealth by adding desirable goods and services to the economy. I understand that you believe cryptocurrencies provide a useful service, and even if we grant that, buying cryptocurrency does not make it more useful, it's simply shuffling bits around.

root_axis 5y ago

It's not the same thing at all. Stocks confer legal ownership of a productive enterprise so it makes sense that stock price increases when revenue increases; if the enterprise produces more revenue than a stake of ownership is worth more.

serverholic 5y ago
There is no requirement that stock price behaves in this way. There is a large speculative component and also a ponzi element (my first point) in the stock market system. "It's not the same thing at all" makes no sense. I'm describing how there are shared elements to both systems. > if the enterprise produces more revenue than a stake of ownership is worth more. And there are many things that a crypto can do to increase its value, for example: 1. Switch to a more efficient algorithm (PoW -> PoS). 2. Increased network effects. 3. Running for a longer time without hacks or the network going down. 4. More projects being built on top.
- root_axis 5y ago
  > There is no requirement that stock price behaves in this way. Obviously... but the reason you use the language "not a requirement" is because everyone knows that's typically how it works. Obviously there are various factors that impact a stock price, but pretty much all of them are a function of expected future revenue. If Apple were to announce a VR product line tomorrow, the stock price would instantly climb because investors would make a judgement that this new product will generate future revenue. With cryptocurrencies this dimension does not exist. > And there are many things that a crypto can do to increase its value, for example Even if we grant that these things might amplify the utility of a cryptocurrency, it still doesn't change the fact that buying cryptocurrency does not facilitate productive work, it's merely an exchange of value between two people, no wealth is created. When you invest in a company, you're giving it fuel to grow and create wealth by adding desirable goods and services to the economy. I understand that you believe cryptocurrencies provide a useful service, and even if we grant that, buying cryptocurrency does not make it more useful, it's simply shuffling bits around.