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.
> 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.
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.
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.)
You see no value in having a currency that can't be inflated on a whim by your government? As in, the printing of money that reduces the purchasing power of the money sitting in your bank account. Really?
There is some value in having assets immune to inflationary money printing; indeed there are countless examples of such assets available for purchase such as stocks and real estate. My question remains: why is risk of permanently losing your money worth the alleged benefits of crypto? I am willing to accept 2% fees from Amex built into my purchases because such purchases are insured against fraud and deceptive business practice. Crypto provides none of that but it does provide a substantial non-zero risk of permanently losing access to your money because you forgot your password or lost your coke storage.
Stocks and real estate also pose a risk of permanently losing your money; for example, the company might go bankrupt, the real estate might be expropriated via adverse possession, or the government might freeze trade in the market until after you die, as has happened in a large number of cases since the Russian invasion of Ukraine. Even without government freezes, Ukrainian refugees whose savings were invested in Ukrainian real estate cannot spend them now (they are illiquid) and may lose them.
I recommend not storing your password with your coke.
Commodity traders couldn't care less, and the vast majority of the use of gold is purely commerce, unrelated to its inherent value for plating electrical contacts or coating mirrors.
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.
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.
> Trading is only zero sum at an instant in time and space. Moving or holding commodities can change the sum of the trade.
Trading between financial participants is, cetiris paribus, always zero sum. Irrespective of the timeline.
Buyer's gains are the seller's opportunity cost; buyer's losses were avoided by the seller. (Paribus violation is when parties have different funding costs.)
Moving commodities around isn't trading per se; it's logistics. Again, value adding.
> Only if you consider the trade in the quantity of the goods traded, and not in a prevailing unit of accounting
Nope, this is microeconomics. If you and I have the same funding costs and we trade a commodity derivative, any gain you have is a gain I gave up. Any loss you have is one I avoided.
This is true irrespective of the unit of account of point in time at which one measures it; it's an identity. The only
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.