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Comment by swarnie_ | Hacker News Reader

I have a long standing issue with crypto that's starting to bug me...

When i buy stock i'm hoping for two things. first that it increases in value but also that i get to collect some dividends because i own a tangible piece of a company.

When i buy ETH or XLM my only goal is to sell it on to someone else for more, i get nothing while i hold it and can't actually use it for anything. All i'm doing is searching for a bigger idiot to buy it off me.

What am i missing?

Edit: I get crypto is emotive and a lot of you guys are balls deep in the cult but it'd be nice to get some answers rather then my post just getting hidden.

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Warren Buffet said the same thing, you are not missing anything:

"Cryptocurrencies basically have no value and they don't produce anything. They don't reproduce, they can't mail you a check, they can't do anything, and what you hope is that somebody else comes along and pays you more money for them later on, but then that person's got the problem. In terms of value: zero.""

One obvious thing that nobody seems to mention is a store of value that the government can't devalue (that requires a more stable crypto system, I will grant you that), can't tax[0] and can't control. You may have all sorts of objects to that, they point is that there are good solid people out there, with long memories, deep understanding of the financial system and no trust in the governments ability to handle it.

As for stocks, I buy and hold them, but yes I am explicitly looking for a the next sucker who is willing to pay more when I need to liquidate them.

[0]: they will have to tax something else, like a sales tax. I am fine with that, I just don't want them to be able to take what I own.

I concluded a while ago that there's an uncrossable chasm between the people who understand/agree with your first paragraph and those who don't. Any argument beyond that is just people talking past each other.

Coins you can stake.

ETH should be possible to stake soon-ish, other examples are ADA, ALGO and many more..

Stake?

You earn interest (varying) while you delegate the coins to a stake pool.

This is basically the same (details matter, ADA for example keeps the coins in the wallet all the time - AMP coins are transferred elsewhere) for all PoS (Proof of Stake) coins.

Bitcoin, on the other hand, is a PoW (Proof of Work) coin.

Edit since i can't reply downthread:

You're of course free to cash out your staking rewards however you want, but mind 2 things:

- taxes

- transfer fees

- the interest compounds..

Ok, that's fair enough but it still doesn't solve my original problem.

I still end up with more of the same asset with no intrinsic value.

I assume they aren't paying me out in GBP or freedom bucks?

My understanding is that you can largely think about crypto in a similar way you think about regular currencies and economics: staking rewards are similar to governments printing money via bonds or whatever, there's an internal inflation rate etc, and the value of a currency relative to the rest of the world is to at least some degree related to its governance (but in the case of crypto, governance is restricted to the health of its own ecosystem only, rather than expanding to all industries like a regular country)

The main difference, to my understanding, is that rewards are kinda like getting paid directly by voting (in many cases, in a "republican" fashion via delegation), whereas with regular currencies, the mechanisms that correlate bond yield to economic activity are too complex and abstract for the average joe to grasp.

You easily get like 500% py returns using DeFi.

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