@The Guru: He has also missed the fact that commodities are ‘real assets’ as opposed to financial assets. They differ as real assets have an inherent value.

Not that it makes a huge difference though as Diarmuid appears to believe that non-believers lack the mental capacity to understand such complex matters.

This is a common trait exhibited by most crypto investors.

@The Guru: you realise that not all shares entitle you to a part of the company and it’s profits right? You have shown your own ignorance there.

https://www.companyformations.ie/company-secretarial/types-of-share-classes-irish-companies/

@EꙆoᥒ Mᥙ⳽ƙ: the shares that are actively traded on the stock market and what the vast majority of investors purchase are ordinary shares. Sorry that I did not give a comprehensive analysis of every type of share out there as part of my comment…

@The Guru: Tell that to people who had shares in Irish banks, rock-steady brick-and-mortar businesses with 50 year track records regulated by the State. €20 a share to 2 Cent. Sounds like a bad day at the bookies to me.

@Lee King Buckett: I’m not a crypto investor. Also investing in real companies or commodities that although may look like good investments can still end in losing money. You are betting on their value going up, on a result you can’t predetermine this is gambling. Investing with a lot of research in commodities may be the safeat form of gambling but it is still gambling.

@Diarmuid Hunt: This is true – there is no such thing as a free lunch and you will always have to take on some element of risk in turn for a level of reward.

That said, we digress from the area of crypto currency as an asset class. When it come to equities, for example, there are well known metrics (p/e metrics etc) that, whilst they won’t eliminate risk, at least give a way to estimate value. Added to that, many firms pay dividends to shareholders so its possible to earn back the investment without the need for appreciation.

With commodities, they have an inherent value which fluctuates quickly and brings more risk with it but you do hold a physical asset which you can sell on for something in the future.

Crypto on the other hand doesn’t have any inherent value, it doesn’t generate any income and the currency itself (distinct from the underlying block chain) has no utility (its not readily accepted as a means of exchange) its value is purely speculative and its ownership is extremely concentrated.

@Tordel Back: if you invest in one company in one tiny country then yes you’re getting close to gambling territory. That said very few people invested at the very top and lost it all. Most people bought in at much lower prices and had the benefit of many years of dividends.

@Diarmuid Hunt: Well, at least nobody died

@Lee King Buckett: Eh no but then you’d have to know how both ponzi schemes and cryptocurrencies work which might be a big ask for some… not you of course, you have your finger on the pulse and know exactly what’s happening.

@K C: I didn’t say it was like a rug pull. I said that crypto as a whole (including bitcoin) shares a lot of similarities with a ponzi scheme.

@Diarmuid Hunt: all alt coins are produced to take away your bitcoin.

Don’t confuse them.

@Philip King ⚡️: That would mean that the very basis of bitcoin is flawed if others can’t use the same concept to create alternative cryptocurrencies. Obviously depends on whether they have their own blockchain or are basing their worth on others.

@Diarmuid Hunt: Indeed, as a prominent bitcoiner Anthony Pompliano stated ‘every bull market has to indoctrinate the new class of crypto enthusiast’

In fairness, its not exactly like a ponzi scheme – in some ways its even better as you don’t need to generate income or pay anybody out, you just need to keep people believing that ‘number go up’

Of course, not everyone can get rich off it but that’s never acknowledged. People talk on and on about democratising finance, increasing economic freedom, stopping central banks from inflating away value etc yet nobody mentions the fact that 89%of bitcoin is now mined already and are sitting in wallets waiting to be flipped at a profit or that 2% of ‘network entities’ control nearly 75% of bitcoin.

In fact, inequality in bitcoin is worse than any fiat currency and, as its independent of taxation, there is no way of redistributing it.

Funnily enough, I’ve never met a crypto expert who wasn’t also heavily invested in it and therefore motivated to keep talking it up.

@Lee King Buckett: Wow so learned. Unfortunately for you fiat currencies work off the exact same concept. If there is a majority consensus that they are worth something then their value goes up. Cryptocurrencies are closer to fiat currencies than ponzi schemes although I will agree that all three are on a scale. Dollars/Euros/Pounds etc are worth exactly the value which the global marker deems them to be worth, the same as cryptocurrencies. With ponzi schemes it’s more to do with recruiting people so that you make a profit. The same could be said of fiat currencies and cryptocurrency but then you’d habe to be able to see the bigger picture…

@Diarmuid Hunt: Except fiat currencies can be readily and easily exchanged for goods and services so they have a value as a medium of exchange.

Bitcoin is very restricted in that sense and so the only value it has is the value that other investors ascribe to it – it has no inherent value, it isn’t widely exchangeable and mining aside, you can only buy it with fiat currency… Go figure.

PS you didn’t address any of my other points but that’s not surprising as nobody does.

@Lee King Buckett: Your later points hold water but again you’ve pointed to how easily exchanged etc fiat currencies are, I’m sure those who used the zimbanwean dollar before it inflated to nothing thought the same.

@Lee King Buckett: look into bitcoin a bit more. There is plenty of good knowledge to be found.

Fix the money.

@Philip King ⚡️: This is exactly the kind of response that leaves me with the impression that crypto is based on Ponzi-like foundations.

There are plenty of loud voices bigging it up as the future of finance and whipping up an investor frenzy but there never seem to be any actual concrete responses to specific flaws such as the ones I raised a few posts above.

The whole “do your own research” retort is one that is scarily reminiscent of the conspiracy theorist who has been confronted with a logical fallacy that they can’t answer without upsetting their (perhaps genuinely held) belief – it’s evasive and lacking in substance.

Even if you read this thread, you will have to concede that there is nothing concrete raised to address any of the concerns about the utility and value of crypto as we currently stand.

Experience should tell us that when you have a lot of people excitedly piling into something they don’t actually understand and hailing it as the next big thing, something tends to go spectacularly wrong.

@Lee King Buckett: tell me this. If crypto is based on ponzi like schemes (like you’ve said above) then how come it has been around for a few years? Surely if it was based on a ponzi scheme then all the scammers would have pulled out and got their money by now?

@K C: Bernie Madoff ran his Ponzi fund for 17 years before it collapsed.

Also, I didn’t say it was a Ponzi scheme per se – it does have some noticeable differences (no single titular face at the helm, it doesn’t have to make consistent money to pay out) I said that it seems to share a lot of qualities with ponzi schemes – reliant on those already with skin in the game hyping it up to new investors etc.

@Lee King Buckett:

I don’t gamble in the crypto $hitcoin markets.

Bitcoin only. Know the difference.

@Philip King ⚡️: Once again, a response not addressing any of the points raised.

@Lee King Buckett: take a €20 note out of your pocket, what value does that pice of paper have except an exception to be able to buy things with it and others are happy to accept it. The €20 of value given to that piece of paper has been created by the European central Bank out of thin air, backed by nothing at all.

@newlock.ie: We’ve been over all that. The fact that I can exchange it readily and easily for a wide range of goods and services gives it a value as a medium of exchange.

Now, maybe you can address the points I raise with crypto a few posts up?

@To Mt: yeah like Sushi that famously rugged after Binance listing. You be the type to get rugged on.

@ChadChaderson: did you not read what I just said no?