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Comment by Yiin | Hacker News Reader

I'm probably missing some critical part in my comparison, but crypto trading sounds awful lot like trading in stock markets.

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The difference is that stock, at its core, represents a claim on a portion of the future profits of a business. The business is out there building widgets, supplying people with a service, extracting raw materials, whatever. Most coins are just hollow marketing gimmicks designed to move money around.

Basically all the DeFi ecosystem boils down to trading one coin for another coin, there is no productive work at the core generating value.

> The difference is that stock, at its core, represents a claim on a portion of the future profits of a business.

Wow, that's so real, concrete and down-to-earth :-)

> The business is out there building widgets supplying people with a service

Or perhaps not doing these things, but making performative presentations on how its groundbreaking unproven innovation is certain to bring in a lot of money in the future. Or a mix of the former and the latter.

> Most coins are just hollow marketing gimmicks designed to move money around.

One could argue that some, or many, publicly-traded companies - when one considers the listed trade value of their stock - are 10% real business and 90% hollow marketing gimmicks serving as parking space for speculators' money.

This is a textbook distinction, but when I look at my nasdaq and crypto candles, they all have the same 3-year profile, crypto just feels like it’s 1.5x leverage but that’s it. If stock market is all about production and long-term investment, then it shouldn’t bounce up and down with fear waves. The sibling commenter is right, just from the charts it seems at least 66% of “investors” are short-term players and no forward-looking company will (to my limited understanding) build a long-term strategy around these volumes. I mean, they will, but that only confirms the idea?

Of course stocks should jump around a lot too.

The stock price represents likelihood of future earnings. That's going to be influenced by a bunch of things not in financial reporting.

> missing some critical part in my comparison

Companies can sell stock to fund useful activity.

The past decade companies have sold debt to raise funds to repurchase stock to drive up stock price so senior management can meet their KPI and get a larger bonus.

This is useful activity for society because senior management deserves more money and they work really hard to earn it. /s

Stocks give you share of ownership over the cashflow that a company generates from its business. Theoretically, that is where the value of stock comes from. Crypto does not generate any cashflows (due to selling no goods or services). So crypto is not like stocks. If anything, it is more like commodities than stocks.

You are missing the fact that stocks pays dividends, because stocks represent a piece of ownership of companies that generate profits.

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