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> all work this way Do they though? Unlike cryptos, gold and stocks have real material value behind them, not just community buy-in. You can make the art/bas
by smeeding 4y ago
> all work this way
Do they though?
Unlike cryptos, gold and stocks have real material value behind them, not just community buy-in.
You can make the art/baseball cards/stamps argument, but then you’d be conceding that the value of cryptos — something pitched as a revolutionary technology with limitless profit potential — is, in reality, determined by the same irrational valuation process as niche collectible markets.
There’s a reason we don’t pay for groceries and mortgages with baseball cards and stamps.
- darkteflon 4y agoI’d love to hear more about the distinction between “real material value” and “community buy-in” value. It’s not a distinction I’m familiar with from my more than 20-year career in finance.
- smeeding 4y agoCryptos have value because their investors all agree that they do. That’s where it ends. If those investors stopped believing that, their value would drop to zero because there’s no underlying material value supporting it’s market value. They’re shared delusions, and arguably self-perpetuating high-control groups. What I’m calling “real material value” are things like physical assets and profit generation capacity. Companies own things, and they use those things to generate profit, which in turn filters down to investors. This dynamic doesn’t exist in crypto. Gold has real material value as a useful product, not simply a store of value. I’ve only worked in finance for 6 years, and only on the technical side, so forgive me if my vocabulary doesn’t meet your standards. If you’re actually disagreeing with the point that I’m making, and not just being pedantic, please let me know who you work for so I can be sure to avoid their services in the future.
- darkteflon 4y agoWhat I’m actually trying - and apparently failing - to do is get you to reassess your misplaced confidence. You have a toy-like, airbrushed conception of value that is doing you an analytical disservice. If you’re in finance and interested in value, find a great textbook and get to reading. It’s a fascinating topic. I’ll leave you with Goethe: “Doubt grows with knowledge.”
- aahortwwy 4y agoThis comment implies a great sense of knowledge, authority, and superiority on your part. But it doesn't demonstrate any of that. You couldn't even recommend specific reading. Just "a great textbook". A pretty frustrating comment, honestly.
- darkteflon 4y agoI’m not gatekeeping. Parent’s misconception wouldn’t survive contact with any decent first-year undergraduate finance text book. There’s plenty of great curricula freely available on OCW, EdX, etc. Take your pick. Just read something. Edit: You know what, forget the textbook: spend 5 minutes on [wikipedia](https://en.m.wikipedia.org/wiki/Theory_of_value_(economics) https://en.m.wikipedia.org/wiki/Theory_of_value_(economics)). I usually just ignore this stuff. But people repeat this garbage over, and over, and over on HN to disdain others (have a look at examples in this thread) and it’s just plain wrong.
- shanusmagnus 4y agoAnytime someone talks about how xx "isn't backed by anything, like gold" I know they haven't actually put in a modicum of intellectual work on the topic. Granted, figuring out that money of every stripe is nothing more than a belief coordination mechanism is kind of a mindfuck. Even so, you'd think smart people would at least begin down the road. But nope.
- gitfan86 4y agoEveryone is well aware that the USD is just a worthless piece of paper. No one is suggesting that owning gold is the path to riches. We are just pointing out that investing is crypto is no different than investing in Enron or Bernie Madoffs funds.
- shanusmagnus 4y agoThe point I'm making, and that parent is making, isn't about gold as a path to riches. It's about where value comes from. Gold is a convenient illustration.