[mthoms]

> That's not even remotely true. Stocks are directly tied to the performance of a company providing goods or services. There's something you can directly gauge.

I'm no stock expert but isn't the majority of a stock's value due to speculation on what it will be worth one day in the future?

I think the parent made a valid point. Sure, stocks are generally easier to "gauge" (and therefore lower risk) but you're still just speculating that it's future price will be greater than it's current price after all.

Low-risk gambling is still gambling isn't it?

[AlexandrB]

> I'm no stock expert but isn't the majority of a stock's value due to speculation on what it will be worth one day in the future?

That's true, but stock can represent a portion of an asset with production potential. A factory or a mine or a dot-com. Bitcoin is pure fiat money.

If I owned all stock in AAPL, I would own one of the most valuable companies in the world which would yield me several billion USD in profits every year. If I owned all bitcoins my asset would be completely worthless because there would be no market for it.

I defer to Warren Buffett's quote [1] on Gold - an asset similar in it's uselessness:

> Today the world's gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce -- gold's price as I write this -- its value would be $9.6 trillion. Call this cube pile A.

> Let's now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world's most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-aroundmoney (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?

[1] http://www.nasdaq.com/article/why-warren-buffett-hates-gold-...

[mthoms]

>If I owned all bitcoins my asset would be completely worthless because there would be no market for it.

Of course, but you could say the same about having the entire internet to yourself. Or being the only person on Facebook. That's just a function of how networks work.

[comex]

But he could own all of Facebook without making it worthless.

[krrrh]

> isn’t the majority of a stock's value due to speculation on what it will be worth one day in the future?

It’s more accurate to say that it’s a reflection of the value to still be generated by the productive capacity that your share represents minus the discount-rate of future money. That’s mostly a multiple of expected earnings (plus the value of capital) which is why earnings calls are so important and heavily regulated. If you buy a stock you’re saying that you think the market has undervalued it, or that it’s fairly valued and you expect it to grow with the economy as a whole.

In a pure gambling scenario like a lottery or roulette wheel all the information you have to go on is contained within the game itself. Increasingly crypto-trading is less about the fundamentals and more about the trading game itself. We’ve watched Ethereum go from one screw up to the next: TheDAO hack and rollback, the first Parity wallet hack, the “I killed it” bug, all ethereum contracts being hobbled for a weekend by a cartoon cat breeding game. Every time there is a big discussion here about the fundamentals of the tech, and how flawed the design is, how there are better approaches or projects. Yet the price is totally disconnected and responds more to being listed on a new exchange than any consideration of the viability or usefulness of the thing itself.

It’s why technical trading, which is close to reading tea leaves when it comes to usefulness on equity markets, actually seems to work in crypto-asset markets. So many people fall back on in the absence or neglect of external information that it that it becomes a self-fulfilling prophecy.

[stordoff]

With stocks, you can more easily separate out the actual performance of the company from speculation (profits vs. stock price), and in the worst case they have assets that provide some intrinsic value. They also operate in a more stable legal environment - it's unlikely that new regulations would instantaneously devalue companies (which could happen with crypocurrencies as they still aren't a settled part of the legal world), and statements made by the company (projected revenues etc.) are regulated.

You can certainly draw parallels between stocks and crypocurrency speculation, but I'd say the differences between the two are fairly fundamental.