[bazizbaziz]

"There is nothing to support bitcoin except the hope that you will sell it to someone for more than you paid for it.”

Genuinely asking, isn't this the plan for many people? How is bitcoin different than other commodities or property in this regard? Would Bogle say the same thing about those investments?

[CPLX]

There is a big difference. If you buy wheat futures and nobody wants to buy them, you can take delivery of a bunch of wheat. If you buy investment real estate and nobody wants it, you can live in it, or build things on it. If you buy stock in a random Fortune 500 company and nobody wants it, you can take possession of a bunch of desks or factories or inventory or whatever their deal is. And if you take possession of a bunch of US currency you can be assured that you'll be able to use it to settle debts or pay your taxes as long as the US government is around and has better guns than everyone else.

Bitcoin is different from all those things.

[jozzas]

> If you buy stock in a random Fortune 500 company and nobody wants it, you can take possession of a bunch of desks or factories or inventory or whatever their deal is

Not really, the value of the stock approaches zero, and when the company closes up shop I doubt you get anything at all as an investor. Assets would typically be sold to pay off outstanding debts.

[tptacek]

More fundamentally, the value of a share of stock is tied to earnings. When companies accumulate capital beyond their horizon of their operational needs, they issue dividends.

Yes, companies can go out of business, but that's not the point Bogle is making. He's not saying stocks are riskless. He's saying that their valuations are tied to notional future earnings and the dividends they will generate.

[wallace_f]

All those things typically have a potential DCF PV associated with them. Bitcoin is 100% speculative.

[econner]

Yes, there's really nothing that gives Bitcoin value beyond new investors being willing to pay more for it than previous investors. Most people don't transact using it and the network is far too slow to support that use case anyway. It is a "store of value" that loses or gains half its value every few months. The community is torn with 3 separate forks & some of the earliest Bitcoiners have gone all in on Bitcoin Cash. The majority of the hashing power is controlled by a few entities and is a far cry from the decentralization originally envisioned. The communities online no longer talk about Bitcoin as a useful tool. They just talk about getting rich off of it. coinmarketcap.com, a site only for checking the price of cryptocurrencies, is a top 500 site globally according to Alexa, meaning there are a lot of people checking the price of bitcoin, few people using it for anything.

[ohhhlol]

> most of the early Bitcoiners have gone all in on Bitcoin Cash.

this is an absurdly untrue statement

[econner]

Ok, "most" was the wrong word, but Roger Ver and Gavin Andresen were instrumental in the success of Bitcoin and they now support BCH.

[lostsock]

Gavin Andresen maybe, but what has Roger Ver done?

[econner]

In April 2011 Roger Ver bought enough bitcoin to drive the price up from $1.89 to $3.30. His company was the first to accept Bitcoin for payment. He paid for the first radio and billboard advertisements for Bitcoin. He funded BitInstant, Blockchain.info, BitPay, Ripple, and Kraken. He helped found the Bitcoin foundation. He started an online store that accepted only bitcoin. He essentially became a spokesman for Bitcoin.

[makomk]

Bitcoin is processing roughly an order of magnitude more transactions than Bitcoin Cash right now. Though the fact that Bitcoin Cash is only running at about 1/100th of its nominal capacity hasn't stopped the community cheering for another hard fork to increase that capacity limit further, presumably because its price is driven by speculation about how much it could do if anyone actually cared about it.

[kafkaesq]

How is bitcoin different than other commodities or property in this regard?

The key distinction is that, mercurial though their price fluctuations may be - traditional commodities such as oil or real estate at least have some intrinsic value, and hence, an intrinsic floor to their valuations. Meanwhile, to the extent that any of these "coins" have such an intrinsic value - if they can even be thought of as "currencies" at all - it is extremely hard to pin down.

Which is Bogle's central point: to the extent that any of these instruments have "value", it's in the belief that ... that value will keep going up, and up, and ever up.

[saryant]

Property can be used to generate returns (rents). Bitcoin cannot.

[MrFantastic]

Mature stocks will usually start paying a dividend.

Equity in a company means you own part of that company.

Owning Bitcoin means you own a BTC.

[AnimalMuppet]

If I buy stock in a company, and the company pays dividends, I get the dividend income until I sell the stock. That is, I bought a future income flow. Same thing if I bought an income-producing property.

Raw land? Non-income-producing property? Gold? Not so much.

[phnofive]

"This is a great question, in part because it has no easy answer."

https://www.investopedia.com/ask/answers/09/difference-betwe...