Bitcoin has endowed many people with financial means in a way completely orthogonal to their day-to-day work. Say what you will about bubbles, but this "fund manager's" perspective is healthy check on reality.
Even if you fail to do that as long as you have started investing sufficiently early enough - let's say 30 years before retirement (around 35 years old) - you probably have experienced at least one recession and recovery until retirement. If suddenly markets crash during retirement by 50% on an asset that is up by 150% does it matter? You still got away with a profit.
And nobody forces you to liquidate everything at once. So sure if you plan to draw out 4% of your stocks you will have decreased your portfolio by 8% every year.
It's narrow index funds that are gambling. Not all index funds.
B) There are (a lot of) stocks that do not pay dividends and never will. There are a lot of stocks that were issued by companies that never made a profit. Both of those categories are traded with a value above zero, how do you explain that?
People then switch to arguing that it's a great store of value. Given its volatility this makes no sense.
Cryptocurrencies in general have a lot of utility and solve real problems.
There's no reason that a crypto-exchange cannot be as secure as a bank (or more), and that governments cannot insure crypto deposits up to some value. Those are purely problems for regulators/governments, which have been relatively slow to adapt legislation.
The problems you highlight are real, and can be good reasons to favour traditional currencies, but they're also easy problems to solve - the thinking has already been done once for traditional currencies and the solutions for crypto are mostly identical.
I suppose it could be even worse though, it could be the upcoming UB fork.
Someone buys it at a certain price (because it has intrinsic value), which realizes the value of the currency.
a) this is valid point, but bitcoin is failing currency. if there was a central authority then its value would have been stabilized. never gonna happen with bitcoin.
b) expected income. for bitcoin, it's nil for ever. don't confuse investment with speculation.
I said that early adopters take risks that pay off when conservative investors are looking for safe plays.
Seriously, shame on you.
hahahahahahahahahahahahahaha
Bitcoin's current transaction fee is like $20, and the value of Bitcoin itself has gone up 25% in the past week alone. If I bought a pizza last week using $20 worth of Dunning-Krugerrands, that same pizza would be $25 this week for no reason. That alone makes it useless as a currency.
The difference is that if amazon is worth let's say 50 billion and they have 10 billion revenue and 9 billion operating costs then not paying out the excess 1 billion as dividends doesn't mean they magically disappear. A 50 billion company with 1 billion in the bank account is in reality a 51 billion company.
When a dividend is paid out the value of the stock is reduced by exactly the amount that is paid out. If the money is used to buy more delivery infrastructure (trucks, buildings) the value of the stock remains the same. From the perspective of a share holder who can sell his shares to someone else nothing has changed. You either have 50€ worth of stock plus 1€ or 51€ worth of stock.
With bitcoin there is no revenue that can be paid out or be invested. If bitcoin goes "bankrupt" what assets can you liquidate to obtain at least a fraction of it's value? How does it work?
Satoshi designed the supply to rapidly mint the majority of coins to the smallest group of users for the least amount of effort/capital/work input.
It's designed to manipulate any user who joins the system after you.
Satoshi could easily have chosen a linear curve to align with time, user growth, and increase in work input yet instead the manipulative log curve was chosen.
Old users are now incentived to attempt to psychologically exploit new people by selling the asset for far more than the cost of production or acquisition.
The Bitcoin network/ecosystem has nothing to offer in this sense— there's no plausible reason for it to be "raising" money by direct sales, and no one owes it taxes. So the initial tokens were distributed based on the fact that they were mined by early adopters before the difficulty got to be too great. There is indeed a basic unfairness in this, but it's not obvious to me how to resolve it for future projects of this kind.
Anti-sybil attacks would be immensely beneficial. Encouragement of honest economic activity. Scaling of bandwidth and fees.
The ideal solution is a PoW that is computationally useful and desirable, BOINC, folding@home. Ethereum almost does this, but PoW algos as they exist now are anti-scale by design, where increasing computational power does not improve the network at all.
The foreseeable longevity of PoW is ungodly waste, when a world wide distributed computing network has potential far far beyond brute force hash puzzles.
The crypto currency hype only (or at least mainly) redistributes wealth, in my eyes to (tech savvy) people-with-means-already.
Yes there might be empowering stories of "smart single moms" making serious money by betting on Bitcoin, but as a whole it only enlarges income equality between people, arguably one of the issues of our time.
I am young, have a high income and a tiny net worth. I got lucky by buying a tiny amount of bitcoin a few years ago purely because I was interested in the tech. There's lots of things about my situation, and the situation of other people in my society which are unfair. But baby-boomers with nest eggs cashing me out because they feel entitled to make an easy buck and are buying something they don't understand doesn't seem like the most important injustice.
At least in Europe, it is not uncommon that bank/pension/state funds (in effect: everybody's money) buy in latest to these stocks.
Allocating resources in society is a hard problem, and capital markets overall provide a valuable service in deciding where resources should go. But when some of these markets function more or less like a lottery (or ponzi scheme), I don't see why a society should support (or even worse: idolize) its participants.
That's condescending, hypocritical bullshit. Why do you feel entitled to "cashing out" on their savings because you're tech savvy?
> Not necessarily rich people (not just rich people), but well-off people who have money they don't need sitting around.
This is straight up delusional. I'm appalled that you would spend so much time describing who you think invests in cryptocurrencies, just to justify yourself profiting off them. Actually, most people who invest in the stock market know better than to get involved with bitcoin. Most people who hyped its value lately are the kind of people who have no idea what's about, invest poorly and have fewer funds. [1]
So yes, most likely your profit came from "broke people, people working several jobs on minimum wage, people who have to use food pantries, people trapped in debt". At least don't try to pretend it's otherwise.
[1] https://www.engadget.com/amp/2017/12/12/bitcoin-mania-mortag...
I am actually quite sad to see the current state of the cryptocurrency community, and how people in it these days widely misrepresent the risk and intricacies of bitcoin/crypto.
When I first got into bitcoin, most people were there because they were fascinated in building a decentralized currency. Profit seeking was always a part, but not the predominant part.
I'm a little bit sad to see where crypto is today. But I think the original faction is still alive.
There's only two ways this bubble will burst:
1. Inflation: the value of fiat currencies drops to match the supposed value of bitcoin, which negatively affects everyone
2. Only the first people to cash out actually turn a profit. Every other person who invested will lose everything.
Either way, the money you now made from bitcoin, came from people who will probably lose their savings contributing to the bubble.