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That's also how the stock market works. For someone to win someone else has to lose.

ChuckNorris89 4y ago
That's not really the same. Investing in some companies adds value to society while "investing" (more like gambling) in crypto does not. For example, some tech and semiconductor companies, because the whole world benefits from better compute (research for vaccines can be done faster; imaging for medical equipment results in better diagnostics; cars, engines and batteries can be simulated better and made safer and more efficient etc.) The whole world benefits. "Investing" in crypto on the other hand, added zero value to society, or actually added negative value through the environmental damage being done.
- izzydata 4y ago
  I'm not really an advocate of proof of work crypto like bitcoin. Proof of stake crypto like Algorand have no environmental damage. There are however way more companies that have caused and will continue to cause environmental damage than bitcoin can ever do in a thousand years. That's not really what is at question here though. It's the concept of a pyramid scheme. The reason the stock market over long periods of time generally trends upwards is because new money keeps being added to it. It's as much of a pyramid as crypto is. That's just how the whole economy is though. Every generation so far has had more people than the last. It will be rather devastating to the stock market and economy whenever that stops being true.
nradov 4y ago
False. Over the long run, successful companies return capital to investors through dividends or stock buy-backs. No one else loses in those transactions. For example, if you purchase shares in an S&P 500 index fund then you'll receive approximately 1.5% dividend yield.
- izzydata 4y ago
  Over the long run dividends would be a very small percentage of the added value by new investment money coming in and increasing the share price.
  - nradov 4y ago
    No that's completely wrong. You seem to have misunderstood the basics of DCF valuation. That is literally Finance 101. Irrational investors can create temporary bubbles in the short to medium term, but ultimately over the long term stock values always revert to cash flow.
fdgsdfogijq 4y ago
Completely false

That's not really the same. Investing in some companies adds value to society while "investing" (more like gambling) in crypto does not. For example, some tech and semiconductor companies, because the whole world benefits from better compute (research for vaccines can be done faster; imaging for medical equipment results in better diagnostics; cars, engines and batteries can be simulated better and made safer and more efficient etc.) The whole world benefits. "Investing" in crypto on the other hand, added zero value to society, or actually added negative value through the environmental damage being done.

izzydata 4y ago
I'm not really an advocate of proof of work crypto like bitcoin. Proof of stake crypto like Algorand have no environmental damage. There are however way more companies that have caused and will continue to cause environmental damage than bitcoin can ever do in a thousand years. That's not really what is at question here though. It's the concept of a pyramid scheme. The reason the stock market over long periods of time generally trends upwards is because new money keeps being added to it. It's as much of a pyramid as crypto is. That's just how the whole economy is though. Every generation so far has had more people than the last. It will be rather devastating to the stock market and economy whenever that stops being true.

nradov 4y ago

False. Over the long run, successful companies return capital to investors through dividends or stock buy-backs. No one else loses in those transactions. For example, if you purchase shares in an S&P 500 index fund then you'll receive approximately 1.5% dividend yield.

izzydata 4y ago
Over the long run dividends would be a very small percentage of the added value by new investment money coming in and increasing the share price.
- nradov 4y ago
  No that's completely wrong. You seem to have misunderstood the basics of DCF valuation. That is literally Finance 101. Irrational investors can create temporary bubbles in the short to medium term, but ultimately over the long term stock values always revert to cash flow.

fdgsdfogijq 4y ago

Completely false