[stuxnet]

You could say the exact same thing about the broader stock market volatility (read: downturn) we’re experiencing. How one can be considered gambling and the other not?

At least the crypto investors aren’t expecting a wholesale bailout at any point, unlike “sophisticated” institutional investors as we saw in 08…

[thrwyoilarticle]

>How one can be considered gambling and the other not?

Because stocks have inherent value in the form of dividends or the potential of future dividends (or the current/potential stock buybacks, which are mathematically similar).

I think this misconception must be the root of the whole issue.

[TheOtherHobbes]

Stocks appear to have inherent value if you don't look at the entire planetary economy as a system.

In reality dividends don't distinguish between productive innovation and wealth extraction.

Innovative dividends are derived from the use value of new goods and services which increase freedom of action for the majority of the population. Wealth extraction is derived from zero-sum movements of capital, typically benefiting rentiers at the expense of productive employees, decreasing majority freedom of action.

But even the first can create externalities - which are real physical cost which are not accounted for.

A house that burns down because of climate catastrophe is a real physical loss. A increase in the value of a house created by aggressive speculation is an imaginary gain that only exists because the people in the game believe in it.

Trad economics exists to hide these differences, and make a hallucinatory financial reality which seems more real than the physical world.

Crypto is an obvious symptom of this hallucinatory mindset. Not only are the tokens imaginary, but the environmental costs are catastrophic.

But the rest of the economy really isn't built on firmer ground.

[thrwyoilarticle]

The fact that there is wealth to extract implies that the ticket that allows you to control the extraction has value. The company has assets and the ticket gives you proportionate ownership of them and proportionate control of where they go.

>A house that burns down because of climate catastrophe is a real physical loss. A increase in the value of a house created by aggressive speculation is an imaginary gain that only exists because the people in the game believe in it.

And a house that is built creates real value by taking land, adding materials and labour, and creating something worth more than the sum of its parts.

I don't need to forgive all of the economic system's sins to explain why stocks have value.

[JumpCrisscross]

> Stocks appear to have inherent value if you don't look at the entire planetary economy as a system

Stocks have value because companies have value. You can buy the whole company and have something with positive value. Buying every outstanding derivative nets out to zero. Buying every cryptocurrency leaves you with something worthless.

[JumpCrisscross]

> How one can be considered gambling and the other not?

Positive- versus zero- or even negative-sum games.

[stuxnet]

That doesn’t explain anything. The broader stock market valuation bears no resemblance to reality and hasn’t for a while.

Crypto does have value. Not all of it, but again we could make the same comparison with ridiculously overinflated stocks like PTON or CVNA.

[JumpCrisscross]

> doesn’t explain anything. The broader stock market valuation bears no resemblance to reality and hasn’t for a while.

This is irrelevant to the game dynamic. (Trading stock in the short term is usually gambling, by the way, because trading per se is a zero-sum game.)

> we could make the same comparison with ridiculously overinflated stocks like PTON or CVNA

One, I can buy a Peloton. People pay for Pelotons. Positive sum. Two, if you go all in on Peloton stock, yes, you're gambling.

[stuxnet]

You’re arguing semantics. No one is arguing that dumping all your money into Bitcoin or PTON specifically is a good idea.

> One, I can buy a Peloton. People pay for Pelotons. Positive sum.

Yes and once Peloton runs out of people to sell overpriced bikes and treadmills to, the valuation will (hopefully) return to reality. Uber continues to lose money on every ride.

If you’re going down the “people pay for it” route, we could say that people also pay for NFTs of monkey pictures.

[JumpCrisscross]

> If you’re going down the “people pay for it” route, we could say that people also pay for NFTs of monkey pictures

I think NFTs are silly, but they are positive value systems. Like art.