This is one of those distraction comments that really adds nothing to the discussion. The article has real points about how crypto is deeply seeded with ponzi schemes all over and the entire currency in fact looks like a ponzi scheme, and the response is just "yeah but sometimes other things are kinda ponzi schemes".
Yes, the stock/bond markets resemble ponzi schemes particularly for certain securities (cough Uber cough), but the existence of other things being sorta ponzi schemes doesn't remove or forgive all the evidence of deep-seeded ponzi schemes throughout the crypto ecosystem.
I don’t think that is true at all. There is economic value in a piece of equity in google. The price someone is willing to pay for it changes frequently.
Crypto is closer to art than anything else. I get less value from a rothko than someone else may
You are right about the general case (not everything is a ponzi) but you’re wrong about the example.
If you make money out of a piece of equity in Google, then somebody made that money but didn’t get it, either by buying the same amount of equity for more money then you, or by creating value through working at google but not getting that value paid in salary. This sounds like a ponzi with investors at the top of the pyramid and workers at the bottom.
A better example of something that isn’t a ponzi are taxes (or any common funds), you pay into a common fund that then is used to provide services and infrastructure that anyone can use for fun and profit. Another example is a traditional savings account. The bank (actually a credit union is an even more pristine example) holds on to your money while you are not using it, and lends it to people that need it, they will give you a small interest as compensation (part of the profit of that money) but also spend some of it to buy insurance so that you will never be at risk of actually loosing that money.
> There is economic value in a piece of equity in google.
It doesn't entitle you to profits, it doesn't entitle you to assets (except in bankruptcy), you can't eat it, and it's only worth what other people will pay you for it. Unlike a rothko, I can't hang it in my living room. Where's the value?
If Google stock were really worthless, someone could buy all of it for pennies and do whatever they want with the company. Owning and controlling a company with $80B yearly profits isn’t worth anything to you?
A single Google share isn’t really worth anything on its own. But its value is tied to the collective value of _all_ Google shares, which _are_ worth something.
> If Google stock were really worthless, someone could buy all of it for pennies
Nobody is disputing that it has market value. My argument is that it has much less intrinsic value than some people would like to believe.
> A single Google share isn’t really worth anything on its own. But its value is tied to the collective value of _all_ Google shares, which _are_ worth something.
Not really, unless there's some non-zero chance that Alphabet will be bought out. By my understanding, that chance is pretty close to zero. Am I wrong?
The classic finance answer--which is indeed perhaps zero in the case of Alphabet--is that the value of a stock is the net present value of its dividend payouts. Buybacks complicate that simple formula as do a lot of other things but, in theory, a share of stock does entitle you to a share of the profits of a company.
The value is partly in Google, the corporation. Google is effectively a bundle of legal contracts, shared knowledge and habits that together tend to spit out money.
The rest of the value is in society. Laws, practices and habits mean that sliver of ownership tends to rise if Google works well, fall if not.
If you prefer to store your savings in whatevercoins, I hope you enjoy whatever you end up with on the other side. But please don't get back to me about it, I am utterly fucking sick of hearing crypto pitches.
Just because I can't walk into Google headquarters and demand a dividend doesn't mean that I don't still own some portion of those profits. Yes, finance is complicated, but there's no corporate board on this planet that would accept indefinite stockpiling of cash, which is why buybacks happen, including for Google!
> Just because I can't walk into Google headquarters and demand a dividend doesn't mean that I don't still own some portion of those profits.
"Own" in what sense? You can't request them, you can't even vote for them to be spent in a certain way, and there's no guarantee that they'll be paid to you.
Someone once said this about NFTs but it also applies to the idea of Google stock as "ownership of profits" - it's like having a wife that you never seem to have time with, but you don't have to worry because you have the paperwork which says you are married to her.
> there's no corporate board on this planet that would accept indefinite stockpiling of cash, which is why buybacks happen, including for Google!
The board is appointed by voters. Those voters are Sergey and Larry. Sergey and Larry determine whether buybacks happen.
Board members have a fiduciary responsibility -- there is legal recourse here by minority shareholders even if that's not "realistic" for your average shareholder.
dude, everything crashed, stocks and even bonds. UK just bailed out pension funds. This proves that Bitcoin has became an asset class and it is very early.
There is economic value in inflation resistance, censorship resistance, and privacy. The fact most get-rich-traders do not care about these things and -also- speculate is irrelevant to the fundamental value.
Tell me how many BTC a new TV is going to be in two years, I'll tell you how many USD it'll be. As a stable, inflation-resistant currency, the BTC value should be easy to predict
The simple moving average for 1BTC should be around $50,000, so a $500 TV will be about 0.01BTC.
Hype or fear may drive the price higher or lower than that, but if you regularly buy and spend bitcoin then the swings average out back to the simple moving average over time, which reliably increases against USD.
I get paid a fixed USD amount of Bitcoin every month regardless of price so my exposure to it similarly averages out.
> fixed total amount of Bitcoin that will ever exist
It has a fixed supply. (Currently. An unknown number of miners could always increase it.)
> Bitcoin is not inflationary
Of course it is. One Bitcoin buys 75% fewer goods and services than it did a year ago. Taking advantage of people who mistake money supply for inflation is one of crypto’s scams.
When one says bitcoin is not inflationary, they mean that the supply does not inflate. You are accurate that bitcoin's purchasing power can wane aka deflate. In my opinion and many others it is moot because everything deflates. As far as we know, there is not a single thing in existence that is void of inflation by your usage of the term. Therefore, we move beyond that version of the definition to the practical and useful definition which is that it cannot be added to numerically.
English is my first language and those sentences are crap, but I think you get what I mean.
> When one says bitcoin is not inflationary, they mean that the supply does not inflate
This is wrong. Not matter of opinion wrong, factually wrong.
> bitcoin's purchasing power can wane aka deflate
This is also wrong. Waning purchasing power is the definition of inflation. Bitcoin was marketed as an inflation hedge. It hyperinflated. Solving that by redefining inflation is dishonest.
> the practical and useful definition which is that it cannot be added to numerically
This is the opposite. It’s taking the practical definition, which relates to purchasing power, and replacing it with a technical curiosity. Which is also, again, wrong: a small group of miners can amend the protocol to keep the gravy train running.
You mean a large group of miners, right? And please don't negate what someone says with just "that's wrong". How is that helpful? I clearly said the literal definition of inflation is not useful because every single thing in existence is inflationary meaning bitcoin is as inflationary as every other thing. We use the term in regards to money as meaning the supply doesn't increase and I believe you are fully aware of that.
This. Today's stock market bears little relation to "a thing where you can buy shares of a company, and if it does well you can get paid by selling it."
That's what it says in the textbook, but you are woefully misinformed if you believe that this strongly matches reality, especially for individuals and smaller players in this thing.
and yet every time it is actually prosecuted in court (not settled or plea dealed) the distinction blurs because the difference between something legal and illegal can’t be found
> This. Today's stock market bears little relation to "a thing where you can buy shares of a company, and if it does well you can get paid by selling it."
So speculation? Seems like that is the primary way it works today. Also, dividends represent a major source of market returns. Some searching suggests as much as 30%.
