You're completely wrong about crypto being a zero sum game. Wealth is created in crypto the same way it's created in the stock market, with changing perceptions and opinions on value driving the underlying asset's value.
A) The bulk of value in capitalism is not created via the exchange of shares - it's created when people 'do stuff, make stuff and invent stuff' - yes - there is some value creation by financial activity, but it's not the bulk.
Crypto currencies - if they were actually used as currencies - would provide some value. But i) they are not being used as currencies - and ii) they are certainly not being used to the point wherein they should be having a $50B valuation/cap.
It's wrong to suggest that BTC has created $50B in value for civilization.
B) Your point about valuation is wrong.
Stocks can be valued in a number of ways, but ultimately they are worth the present value of all the assets the company has - and will have. Why? Because stocks are ownership. The companies bank account is de-facto owned by shareholders.
Crypto currencies cannot be valued - they don't have anything underlying them - they do not imply ownership of anything - and especially since they are not used as currencies - their valuation is a total fantasy.
BTC is worth whatever the next guy thinks it is worth - and what he thinks it is worth is pure speculative fiction. Just a function of emotional dynamics and fad.
A stock in 'Bank of America' - well you can calculate how much assets they have, and estimate how much you might think they will earn in the future. There will be disagreement over that hence fluctuating value of prices ... (and BTW it's good that we have a lot of people trying to figure out how much BofA is worth - that provides value).
At least as of today - all crypto currencies are a fiction. They are invented numbers that others are duped into paying money for. They are generally not used as currencies, and so ... 'there is no 'there' there'. Even thought it's really interesting from an academic perspective, and something may yet come out of it.
However, there are a whole class of stocks where the stock price is based on nothing more than perception of value. There is almost zero actual, intrinsic value. You see this often with penny stocks (and even larger companies, back in the dot-com days.)
>Crypto currencies cannot be valued - they don't have anything underlying them - they do not imply ownership of anything - and especially since they are not used as currencies - their valuation is a total fantasy.
>BTC is worth whatever the next guy thinks it is worth - and what he thinks it is worth is pure speculative fiction. Just a function of emotional dynamics and fad.
Isn't that equally true of any currency? It doesn't pay dividends and doesn't guarantee ownership of anything, and rises and falls based on the whims of the market. At most you can say that legit currencies are "ownership" of "the cancellation of X units of tax debt", but that's somewhat circular: there's no guarantee that "X units of tax debt" will be a large burden in the first place, and will itself fluctuate in value with the market.
[1] It's true that bitcoin has many failings at achieving anonymity but it certainly competes with international bank transfers for many use cases.
Necessary disclaimer: I'm long bitcoin and and author of understandingbitcoin.us.
And many stocks are similarly overvalued by orders of magnitude compared to the actual assets the company holds, to the point that saying that it's "how much they will earn in the future" is meaningless. People buy those stocks because they hope to sell them at a greater price to other people and cash in on the difference, just as they do with BTC.
When companies grow faster than the 'cost of capital' for the person buying the stock - then the value goes to infinity - so this is a problem.
But it's still based on something.
Telsa stock will not go to $20K each.
If you want untraceability you should pick up Monero.
Empirically, BTC is used a lot for this kind of stuff - ransomware payouts, Silk Road type marketplaces etc.
I'm aware it's used for this kind of stuff but that doesn't really change facts.