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Surely the better takeaway is to just not bet on crypto in general? It's supposed to act like a currency, not a stock. So long as people keep feeding into these

Surely the better takeaway is to just not bet on crypto in general? It's supposed to act like a currency, not a stock. So long as people keep feeding into these pump-and-dump schemes they'll keep happening. Money doesn't come from nowhere. For every dollar you make on crypto, somone loses a dollar. All these BS coins do is shuffle wealth from the unlucky gamblers to the lucky ones. Go spend your money at a casino instead.

fragmede 3y ago
> For every dollar you make on crypto, somone loses a dollar. If that's not true of the stock market, why would that be true of crypto?
- CivBase 3y ago
  This is oversimplifying, but stocks are essentially purchasing a stake in ownership of the company. The company uses that money to advance its mission - ideally generating more profits which are shared with the stockholders (dividends). It's that stake in ownership and expected dividends that give stocks inherent value. There is no company behind crypto currencies that holders get ownership of. There is no product or service to drive profits. There are no dividends, voting power, or anything that gives inherent value to the coins. It's all pure speculation. Just money getting shifted around among the holders - with exchanges taking a cut off the top of each transaction.
  - fragmede 3y ago
    I'm sorry, but what am going to do with my Class C shares of Google which have no voting rights? They also haven't paid dividends. My buying of them didn't give Google any money, either. My infinitesimal ownership in Google doesn't get anything other than it's a number in a database somewhere that hopefully goes up. There's underlying assets there, sure, but as we've seen with GME, TSLA, and now NVDA, it's all just vibes. In this case though, FTX had their own token FTT that gave people that owned it voting rights in FTX and "staking rewards" aka dividends. It's not worth anything today due to the fraud that SBF perpetrated, but that sure smells a awful lot like a stock to me.
    - hgomersall 3y ago
      Right. There seems to be a real aversion to accepting that trading shares is really just middle class gambling.
      - methodical 3y ago
        Stocks are not completely nondeterministic games of chance, which is why most people who hold properly diversified stock portfolios have seen long-term growth instead of loss. That's probably why people don't call it gambling.
        Zpalmtree 3y ago
        Crypto is not a completely nondeterministic game of chance either. There are people in crypto who are consistently profitable.
        methodical 3y ago
        Who in crypto is consistently profitable?
        deleted 3y ago
        [deleted]
        kelnos 3y ago
        > Stocks are not completely nondeterministic games of chance That's a bit of a straw man, as no one claimed they are. "Gambling" is often not a nondeterministic game of chance, either. For example, when I go to a casino and play poker, I'm still gambling, even though there's plenty of determinism and strategy to go along with the elements of chance.
      - ryan_lane 3y ago
        Long-term investors are buying more stocks at a lower price, with the idea that at some point the company may eventually pay dividends that justify the price of the stock, at which point they get more share of the dividend profits. Folks who purchase these stocks after this point would base the value on the value of the dividends. Day traders are gamblers. Cryptocurrencies will _never_ pay dividends, because they are based purely on speculation. These things are absolutely not the same. Cryptocurrencies only provide gambling.
  - hcks 3y ago
    Why would someone sell the share for less than this "inherent" value then? Or conversely why would some buy for more than that?
    - gambiting 3y ago
      They don't though? Share buy/sale price is directly correlated to the value of the company.
      - shinryuu 3y ago
        Which changes depending on how many buy the stocks. Was gamestop really worth billions at the top of the mania?
        acdha 3y ago
        The market cap of its stock might but if you looked at the financial press during that episode it was full of people pointing out that there was no change in the fundamental value of the company. That’s because real businesses have things like sales volume, profit margins, property rights, etc. which aren’t entirely arbitrary and dampen the swings considerably. That’s not perfect or immune to abuse as Boeing shareholders are no doubt aware but it’s very different from something which has no grounding beyond momentary social consensus.
        shinryuu 3y ago
        While I agree that there is a lot of hot air in crypto, what gives value to something like ethereum is the fact that you need it to use the network. Given people think it's useful to use that network it will give value to ether.
        acdha 3y ago
        That does add some value but it’s fairly weak - people can always choose to switch to something cheaper, capping the maximum - and it adds its own risks: price spikes might leave you unable to perform transactions within your budget.
  - kelnos 3y ago
    > This is oversimplifying Yes, and in doing so you've managed to blissfully ignore all the speculation and outright gambling that goes on in the stock market. I'm not a crypto defender; I think it's mostly useless and a waste of people's time and money. But let's not paint a big rosy picture of the rest of our financial system. That's just not where the truth lies.
    - CivBase 3y ago
      I did no such thing. I only answered the question I was asked. For some reason a bunch of people interpreted that as a defense of short-term stock trading.
- skaag 3y ago
  Publicly traded companies make money by creating value and selling products or services. At least, the good companies that actually sell something (you'll find a bunch of them don't do crap or are just outright scams). Take Apple or Coca Cola for example: They have well established lines of products and lines of business. You know people will keep buying iPhones and MacBooks and AirPods and whatever else Apple makes. You know people will keep buying Coca Cola drinks forever and ever. The popular blockchains do not create any intrinsic value (Looking at Bitcoin and Ethereum). They are heavy and cumbersome and can't handle planetary scale. Some blockchain solutions promise secure, fee-less transfers (for example IOTA and NANO). In my opinion, those blockchains at least partially implement the true promise of Crypto that, if successful, would be able to replace the existing financial system which is extremely wasteful. Just think about how much money it costs to implement FIAT: You have to print it, which is very expensive (both notes and coins). You then have to move it around using heavy armored vehicles. You have to secure it in extremely expensive vaults. You then need to keep securing it across the entire vertical: Every business that takes cash has to deal with theft, securing the cash, fake notes, etc. Even credit cards are very expensive to maintain. Cards have to be printed & mailed out all the time. It's all plastic, and it all ends up in landfills. The inks are toxic, as are the metals in the chips. The equipment required to process cards is expensive, breaks and needs to be replaced, is annoying, slow, ridden with fraud and theft and chargebacks and a host of other issues. I implemented EMV and 3D-Secure for card processing, a few years ago. I also implemented cash processing equipment. It ALL sucks. You have no idea how Crypto is a breath of fresh air compared to those crappy standards and mechanisms that take an insane amount of time and money and bureaucracy to implement and maintain. A really good blockchain that does secure, fee-less transactions in less than a second and can handle planetary scale, now that is the holy grail! You don't need equipment, you already have a phone. The merchants get their money instantly, and they are done, that's it. They have their money. Done. They need to pay their vendors? They pay them, done! They could even instantly pay their vendors at the moment of sale. Can you imagine how revolutionary that is? how this completely changes the game for commerce? The entire crypto world has been held back by greedy assholes, tens of thousands of scammers (how many ICOs and rug pulls have screwed countless users?!), governments, government bodies and banks, and unregulated companies that behave irresponsibly with customer funds (for example FTX and BlockFi). Leadership that lacks vision and initiative (Any 1st world country that accepts crypto and leads with it, would make its citizens rich, by definition, on a planetary scale).
skaag 3y ago
Except greed...
Zpalmtree 3y ago
Crypto is one of the only markets where someone with virtually zero investment can become very rich. It's not easy, but smart traders can make a lot of money. You are not doing that at the casino.
- CivBase 3y ago
  Same can be said about the lottery. I don't recommend that as an investment either.
immibis 3y ago
Crypto is supposed to act like a stock. Very few people actually want decentralized digital dollars. Compared to the number of people who want decentralized digital get rich quick schemes.

fragmede 3y ago

> For every dollar you make on crypto, somone loses a dollar. If that's not true of the stock market, why would that be true of crypto?

CivBase 3y ago
This is oversimplifying, but stocks are essentially purchasing a stake in ownership of the company. The company uses that money to advance its mission - ideally generating more profits which are shared with the stockholders (dividends). It's that stake in ownership and expected dividends that give stocks inherent value. There is no company behind crypto currencies that holders get ownership of. There is no product or service to drive profits. There are no dividends, voting power, or anything that gives inherent value to the coins. It's all pure speculation. Just money getting shifted around among the holders - with exchanges taking a cut off the top of each transaction.
- fragmede 3y ago
  I'm sorry, but what am going to do with my Class C shares of Google which have no voting rights? They also haven't paid dividends. My buying of them didn't give Google any money, either. My infinitesimal ownership in Google doesn't get anything other than it's a number in a database somewhere that hopefully goes up. There's underlying assets there, sure, but as we've seen with GME, TSLA, and now NVDA, it's all just vibes. In this case though, FTX had their own token FTT that gave people that owned it voting rights in FTX and "staking rewards" aka dividends. It's not worth anything today due to the fraud that SBF perpetrated, but that sure smells a awful lot like a stock to me.
  - hgomersall 3y ago
    Right. There seems to be a real aversion to accepting that trading shares is really just middle class gambling.
    - methodical 3y ago
      Stocks are not completely nondeterministic games of chance, which is why most people who hold properly diversified stock portfolios have seen long-term growth instead of loss. That's probably why people don't call it gambling.
      - Zpalmtree 3y ago
        Crypto is not a completely nondeterministic game of chance either. There are people in crypto who are consistently profitable.
        methodical 3y ago
        Who in crypto is consistently profitable?
      - deleted 3y ago
        [deleted]
      - kelnos 3y ago
        > Stocks are not completely nondeterministic games of chance That's a bit of a straw man, as no one claimed they are. "Gambling" is often not a nondeterministic game of chance, either. For example, when I go to a casino and play poker, I'm still gambling, even though there's plenty of determinism and strategy to go along with the elements of chance.
    - ryan_lane 3y ago
      Long-term investors are buying more stocks at a lower price, with the idea that at some point the company may eventually pay dividends that justify the price of the stock, at which point they get more share of the dividend profits. Folks who purchase these stocks after this point would base the value on the value of the dividends. Day traders are gamblers. Cryptocurrencies will _never_ pay dividends, because they are based purely on speculation. These things are absolutely not the same. Cryptocurrencies only provide gambling.
- hcks 3y ago
  Why would someone sell the share for less than this "inherent" value then? Or conversely why would some buy for more than that?
  - gambiting 3y ago
    They don't though? Share buy/sale price is directly correlated to the value of the company.
    - shinryuu 3y ago
      Which changes depending on how many buy the stocks. Was gamestop really worth billions at the top of the mania?
      - acdha 3y ago
        The market cap of its stock might but if you looked at the financial press during that episode it was full of people pointing out that there was no change in the fundamental value of the company. That’s because real businesses have things like sales volume, profit margins, property rights, etc. which aren’t entirely arbitrary and dampen the swings considerably. That’s not perfect or immune to abuse as Boeing shareholders are no doubt aware but it’s very different from something which has no grounding beyond momentary social consensus.
        shinryuu 3y ago
        While I agree that there is a lot of hot air in crypto, what gives value to something like ethereum is the fact that you need it to use the network. Given people think it's useful to use that network it will give value to ether.
        acdha 3y ago
        That does add some value but it’s fairly weak - people can always choose to switch to something cheaper, capping the maximum - and it adds its own risks: price spikes might leave you unable to perform transactions within your budget.
- kelnos 3y ago
  > This is oversimplifying Yes, and in doing so you've managed to blissfully ignore all the speculation and outright gambling that goes on in the stock market. I'm not a crypto defender; I think it's mostly useless and a waste of people's time and money. But let's not paint a big rosy picture of the rest of our financial system. That's just not where the truth lies.
  - CivBase 3y ago
    I did no such thing. I only answered the question I was asked. For some reason a bunch of people interpreted that as a defense of short-term stock trading.
skaag 3y ago
Publicly traded companies make money by creating value and selling products or services. At least, the good companies that actually sell something (you'll find a bunch of them don't do crap or are just outright scams). Take Apple or Coca Cola for example: They have well established lines of products and lines of business. You know people will keep buying iPhones and MacBooks and AirPods and whatever else Apple makes. You know people will keep buying Coca Cola drinks forever and ever. The popular blockchains do not create any intrinsic value (Looking at Bitcoin and Ethereum). They are heavy and cumbersome and can't handle planetary scale. Some blockchain solutions promise secure, fee-less transfers (for example IOTA and NANO). In my opinion, those blockchains at least partially implement the true promise of Crypto that, if successful, would be able to replace the existing financial system which is extremely wasteful. Just think about how much money it costs to implement FIAT: You have to print it, which is very expensive (both notes and coins). You then have to move it around using heavy armored vehicles. You have to secure it in extremely expensive vaults. You then need to keep securing it across the entire vertical: Every business that takes cash has to deal with theft, securing the cash, fake notes, etc. Even credit cards are very expensive to maintain. Cards have to be printed & mailed out all the time. It's all plastic, and it all ends up in landfills. The inks are toxic, as are the metals in the chips. The equipment required to process cards is expensive, breaks and needs to be replaced, is annoying, slow, ridden with fraud and theft and chargebacks and a host of other issues. I implemented EMV and 3D-Secure for card processing, a few years ago. I also implemented cash processing equipment. It ALL sucks. You have no idea how Crypto is a breath of fresh air compared to those crappy standards and mechanisms that take an insane amount of time and money and bureaucracy to implement and maintain. A really good blockchain that does secure, fee-less transactions in less than a second and can handle planetary scale, now that is the holy grail! You don't need equipment, you already have a phone. The merchants get their money instantly, and they are done, that's it. They have their money. Done. They need to pay their vendors? They pay them, done! They could even instantly pay their vendors at the moment of sale. Can you imagine how revolutionary that is? how this completely changes the game for commerce? The entire crypto world has been held back by greedy assholes, tens of thousands of scammers (how many ICOs and rug pulls have screwed countless users?!), governments, government bodies and banks, and unregulated companies that behave irresponsibly with customer funds (for example FTX and BlockFi). Leadership that lacks vision and initiative (Any 1st world country that accepts crypto and leads with it, would make its citizens rich, by definition, on a planetary scale).

skaag 3y ago

Except greed...

Zpalmtree 3y ago

Crypto is one of the only markets where someone with virtually zero investment can become very rich. It's not easy, but smart traders can make a lot of money. You are not doing that at the casino.

CivBase 3y ago
Same can be said about the lottery. I don't recommend that as an investment either.

immibis 3y ago

Crypto is supposed to act like a stock. Very few people actually want decentralized digital dollars. Compared to the number of people who want decentralized digital get rich quick schemes.