[lmm]

> The whole regulatory infrastructure from the SEC expects a security to be backed by or representative of a physical asset of some sort - be it shares of a corporation with tangible assets, gold, or in the case of futures, a commodity. Even bonds are, they're securitized debts.

No it doesn't. Corporations are very obviously unphysical, as are debts. Securitizing e.g. music royalties is completely normal.

[dataflow]

> Corporations are very obviously unphysical

I think that misses the parent's point. Corporations own physical assets (like buildings) and things with accepted intrinsic value (fiat currency). but they also indirectly own rights to other things that are indirectly backed by physical stuff in a similar manner (like shares of other corporations, etc.). That's in contrast to something like Bitcoin which doesn't come with a direct or indirect right to anything with intrinsic value.

[lmm]

> I think that misses the parent's point. Corporations own physical assets (like buildings) and things with accepted intrinsic value (fiat currency). but they also indirectly own rights to other things that are indirectly backed by physical stuff in a similar manner (like shares of other corporations, etc.).

Not necessarily. Sometimes a corporation's value is based on something purely speculative, like a drug patent that may or may not work out, or even something that's widely thought to be worthless, like hot tips on the search for Bigfoot. That's completely normal.

[dataflow]

Do you have any examples of this? A corporation that owns literally nothing, whose entire value is based on something speculative (like a drug patent), and who has a traded security?

[lmm]

Getting to exactly $0.00 in the company bank account probably requires an improbable level of fine-tuning (if only because you need enough to file your annual registration statement or whatever), but ISTR Retrophin was down to something like $3.15 + some valuable drug patents at one point in its penny-stock days.

[dataflow]

Again, the bank account balance is not the point of what I'm saying. See the sibling comment I replied to: https://news.ycombinator.com/item?id=35270550

[lmm]

Where do you think invested cash goes if not the company bank account? When you invest in a company, they get some cash and you get a claim on the company. If they then spend all that cash on buying drug patents, marketing, filing registration statements etc., then your shares are no longer backed by cash. The cash has been spent!

[Aloha]

IP is a tangible asset, one that can even be given a value before proven.

[dataflow]

That has nothing to do with what I'm saying. If you invest in a company that "only" has IP, your invested cash itself is still part of the company's assets, so it's not like you're buying shares of vacuum. If the company liquidates itself - you get back your proportion of the company's assets. The situation is not the same with Bitcoin.

[Aloha]

That was my point more or less, is that Bitcoin is a publicly traded fiat currency.

[peyton]

SPACs are just pieces of paper sitting in Delaware somewhere.

[dataflow]

Don't they raise money? Meaning that money is part of (or all of) their assets?

[codehalo]

You are really struggling with this eh?

[danaris]

...Which is more or less what many of us have been citing all along as a reason why cryptocurrencies are bullshit that shouldn't even be allowed to exist.