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A stable crypto-currency will not attract any investment. Crypto is useless for anything but money laundering and speculation.
by dandare 5y ago
A stable crypto-currency will not attract any investment. Crypto is useless for anything but money laundering and speculation.
- ashtonkem 5y agoThe idea of a "currency"[0] attracting investment is kinda crazy in its own right. Normally currencies don't attract investment; you can bet on the difference between them, but you usually "invest" (buy) large amounts of it specifically to do business with the country or economic entity that issued it. You buy Euros to do business in the EU, not to "invest" in the currency itself. 0 - Which crypto currencies actually function as currencies is a matter of debate.
- kasey_junk 5y agoModern treasury operations for large cash holders absolutely “invest” in currencies. They do so in the form of what cash they hold outside of their immediate needs and in what cash “equivalents” they keep on their books.
- melenaboija 5y agoWhat’s the difference between “investing” and investing? Maybe that will help me to better understand cryptocurrencies “investors”.
- kasey_junk 5y agoThe only difference in investing in currency than other asset classes is that the value of currencies is entirely relative to other currencies in ways other asset classes aren’t. In practice that doesn’t make a difference because all the mechanics are the same as any other form of investment decision.
- melenaboija 5y agoFirst of all I should be convinced that cryptocurrencies are currencies and secondly I don’t see how this asset can be used by treasury to hold any cash for operational purposes. Besides I am not sure that is investing per se.
- kasey_junk 5y agoI personally wouldn’t hold crypto as part of an forex portfolio mix for a corporate treasury largely because they are currently not really currency equivalents but there might be treasury groups that do & the mechanics of holding them isn’t much different than any other fx holding. As far as whether treasury asset allocations are investing or not is largely in the eye of the beholder but companies very frequently prefer to hold “cash equivalents” beyond their immediate operational requirements. If a treasury buys us tbills that is both a traditional investment & a fx position (in that it’s a usd we are viewing preferentially over other currencies in our portfolio).
- mdavis6890 5y agoInvesting is when you buy something that creates enduring, repeated value over an indefinite period of time, which you can capture without selling the asset itself. Real estate, for example, creates value (a place to live) over a long time, which you can capture either by living there yourself or renting it to someone else - without selling the house. Stock is ownership in a business which creates value over time (shoes, tweets, cars, etc) which is captured in a variety of ways, like selling through retail or ads or whatever - without selling the stock. This is why currencies, gold and the like are not investments. They do not, in and of themselves, create value. They may be good to buy/hold anyway though!
- melenaboija 5y agoAgree. I personally don’t consider cryptocurrencies as currencies and the comment has few points where I disagree: - Consider them currencies - Describing the fact of holding positions on currencies for operational purposes as an investment - Thinking that cryptocurrencies accomplish the second point
- msy 5y agoBetting on the difference between is done by buying and selling them. I'm no defender of cryptocurrencies but speculation and trading have been a major feature modern forex markets since their inception.
- oldsecondhand 5y agoSpeculating on Forex is gambling, just like speculating on crypto.
- ashtonkem 5y agoWhich is speculating on the relative difference in inflation rates, not actually investing in either currency per se.
- matheusmoreira 5y agoI've gotten paid for code in XMR. It's great and absolutely useful. I wish everyone used it.
- schnebbau 5y agoWhat did you do with the XMR?
- matheusmoreira 5y agoI deposited most of it in a binance savings account. Left some in my mobile wallet. Unfortunately I had to cash it out in order to spend it. Wish I didn't have to but nothing else accepted it. These things will not ever be real if we don't start using them as currencies. I came this close to proposing Monero transactions to a business partner after some banking problems but the market isn't looking good right now, too volatile.
- darkwater 5y agoYour "unfortunately" part is the whole point of what GGP was saying.
- matheusmoreira 5y agoIt's not useless though. It works just fine as a currency. It's just that nobody is using it. Like how Signal is more trustworthy than WhatsApp but nobody I know uses it so it doesn't matter.
- darkwater 5y agoSadly currencies rely on network effects even more than instant messengers to be really useful. The fact that most people look at cryptocurrencies just like they were stocks and comparing against a buying/selling price in USD should be pretty clear. I know that people also invest in currencies and gain money on exchange fluctuations but it's more a "side effect" than the main purpose. With cryptocurrencies is the other way round instead.
- soared 5y agoI’m no crypto fan but this is just incorrect. Stablecoins exist solely to be stable, look at tether.
- dandare 5y agoYou are right. How are they useful?
- immibis 5y agoYou can send them to people and/or exchange them for stuff. Which is exactly what you'd want to do with a currency.
- dandare 5y agoBut why would you do that? When you can do exactly that with a traditional currency but much safer, much cheaper, much faster and much more conveniently.
- immibis 5y agoSending traditional currencies has more roadblocks, in any form, whether you're talking physical or digital traditional currency. The CBDC idea might bring the best of both worlds.
- koonsolo 5y agoWhen you put money in the bank, it's backed by 1% real assets (go fractional reserve money!) So let's say I don't want to put my money into something that is only 1% backed (See the Greek dept crisis). I could store cash under my mattress, but that also has some major risks. With a stablecoin like UST, you 100% own it. Governments can't confiscate it. It's 100% backed by the asset behind it (not talking about Tether here ;)). I do agree that it comes with its own set of risks, but some people might prefer that risk over the ones above. Or maybe I'm a foreigner and want to keep some of my personal value in dollars, but don't want to do that in cash or at some local bank. It's basically another option at your disposal. And as the market cap of those stable coins prove, lots of people prefer that.
- iso1631 5y agoHow else will you get paid for your ransomware?
- shane_b 5y agoStables just need a fixed income vehicle similar to bonds. Luna and UST is this and is taking off.
- koonsolo 5y agoTether has a $69 billion dollar market cap USD Coin has $42 billion, Binance USD has $12 billion, Terra USD $9 billion, Dai $8 billion, ... you were saying?
- acdha 5y agoThere's more to it than multiplying the current price by the number of coins in existence: you need to consider the questions of liquidity and what an attempt to sell a non-trivial amount would do to those exchange rates as people start questioning whether they want to put more hard currency in. Cryptocurrencies are the weakest form of fiat currency and that means that there's a very real chance you simply cannot find enough buyers at the price you want to pay. This can technically happen with other currencies, of course, but they're so much larger and more stable that it's orders of magnitude less likely. You need a world-shaking catastrophe not to find someone willing to take USD because so many contracts are written in USD, and there's plenty of need to pay taxes or interact with government contracts and employees.