[seibelj]

Putting a significant amount of money into something that the vast majority of "intelligent" people say is a scam (as you do), is reward for taking risk. No different than an investor looking at small cap stocks to pick winners and throwing a lot of money in. It seems you are criticizing the concept of investing.

[astoor]

Something is only a sound investment if you know all sides are bound by rule of law. If you were to put money into a shell game at the local unlicenced market, then that would not be classed as a sound investment (even if you did know how to "beat the system" there's a good chance an accomplice would mug you for your winnings after you walked away). Or if you received a cold call from someone claiming to be a stockbroker with "insider knowledge" encouraging you to buy shares that they "know" are about become very valuable, that would not be classed as a sound investment.

With cryptocurrency it is the same. The combination of zero consumer protection and anonymity is the perfect breeding ground for fraud. If you were being charitable, you could call converting fiat money into cryptocurrency a gamble, but certainly not a sound investment. The only people who will try to convince you otherwise are those set to gain from the fraud.

[smeej]

I don't think it's "rule of law" here, but information parity.

How you become sure you have as much information about the subject as the person you're dealing with (i.e., whether that's because it is required by law and you expect to have some recourse if it's violated, or because you are confident that you've had access to the relevant information for some other reason) isn't really important.

[headmelted]

I don’t know that this is a good analogy.

They’re both inherently high risk, but the value derives from different things. With small caps, it’s the idea that one or more may grow to produce outsize returns in the future, whereas the other is hoping someone will come along later with more money to take you out of your position.

(The small caps for the most part aren’t attracting money based on popularity or memes, so are closer to high-risk investing than gambling on speculative assets).

[giraffe_lady]

I don't think that's what they're claiming at all. The "no different than" is doing the work here but I don't think it's warranted.

An investor in that situation has to (presumably, and I'm ignorant so maybe not) do work in doing research, having enough domain and industry knowledge to evaluate what a "winner" looks like in a given industry, understand how valuations are formed and what can make them wrong, etc etc.

Some of that is done by crypto people sure, but the difference between a big success and losing your money there seems a lot more luck-based than in normal investing.

People have been making the argument that investing is gambling for decades at this point, and I don't think that's completely wrong but it is very hard to draw the line. I am comfortable putting crypto trading on the gambling side of that line, and most forms of professional investing probably on the non-gambling side.

They are possibly a lot closer than I think they are, but I don't think that speaks well for either activity!

[SketchySeaBeast]

So it's cool if you take part in a pyramid scheme because you're taking on risk?

[seibelj]

I don't think crypto is a pyramid scheme and your statement is an opinion not a fact.

[ALittleLight]

Literally the only way you can profit with crypto is if people keep buying in at higher prices. It's the perfect instantiation of a pyramid scheme.

[bluepnume]

Literally the only way you can profit with real estate is if people keep buying in at higher prices. It's the perfect instantiation of a pyramid scheme.

Literally the only way you can profit with stocks is if people keep buying in at higher prices. It's the perfect instantiation of a pyramid scheme.

[Sebb767]

> Literally the only way you can profit with real estate is if people keep buying in at higher prices. It's the perfect instantiation of a pyramid scheme.

Except, of course, if you live in it, rent it out or use it as businesses asset. Good luck doing that with crypto.

> Literally the only way you can profit with stocks is if people keep buying in at higher prices. It's the perfect instantiation of a pyramid scheme.

Except, of course, that you as a shareholder can influence the direction of the company and earn dividends. Good luck doing that with crypto.

[bluepnume]

What does that have to do with the original point?

- Real estate has real-world use cases

- Stocks have real-world use cases

- Bitcoin has real-world use cases

It's meaningless to describe any of these as pyramid schemes because "to profit you must be able to sell at a higher price to someone else". That's true of buying or selling anything.

[bitxbitxbitcoin]

Actually you can rent out crypto (to short sellers).

[kragen]

You can live in real estate and get dividends from stocks. Cryptocurrencies are more similar to commodities: gold, wheat, coal. (You can consume wheat and coal, yes, but that consumes them and then you don't have them anymore; that's not profit.)

[not_kurt_godel]

Yes, except gold, wheat, and coal have inherent value as physical items whereas crypto does not.

[vageli]

> Literally the only way you can profit with crypto is if people keep buying in at higher prices. It's the perfect instantiation of a pyramid scheme.

How does that differ from other commodities trading? The only way to profit in the futures market is to buy low and sell high, too, for instance.

[ALittleLight]

Commodities are eventually consumed or used. Traders don't buy wheat futures for the joy of collecting wheat futures, they buy them because eventually some business wants to buy and use the actual wheat.

The "and use" phrase is what differentiates commodities from cryptocurrency.

[vageli]

Sure corporations use futures to ensure stable prices but there are also traders that specifically just trade futures without any hope for receiving the underlying commodity.

[JumpCrisscross]

> differ from other commodities trading

It doesn’t. Trading is zero sum. It supports the extraction, processing and delivery of useful things, however, which is positive sum.

[someguydave]

Trading is only zero sum at an instant in time and space. Moving or holding commodities can change the sum of the trade.

[SketchySeaBeast]

> Putting a significant amount of money into something that the vast majority of "intelligent" people say is a scam (as you do), is reward for taking risk.

I don't think this is any more a fact than my statement. I'm merely trying to point out that you seem to be saying it's ok to invest in what people perceive as a scam (my example was pyramid schemes) because it's an investment.

[ip26]

No, they are just describing the well known mentality of "easy come, easy go".