> There's a large difference, one of those is based on a pyramid scheme with no inherent value, and one is based on a company delivering value to customers.
Crypto is mostly a store of wealth, similar to a currency. It's inherit value is that it is fungible, transferrable and scarce. Unlike other currencies, the supply is not at the whims of fed officials and politicians. The difference is that you can't pay taxes directly in crypto. I like it as a hedge.
Do you believe all currencies are pyramid schemes with no inherent value as they're based on nothing?
Currencies are not based on nothing. They're based on taxation. As long as a huge group of people need a currency to stay out of jail, that currency has value. (And pretty much all currencies in history have had their value imbued in them by threat of violence.)
>Crypto is mostly a store of wealth, similar to a currency.
Currencies are not meant to store wealth. They are the exact opposite, a medium of exchange. From a macroeconomic perspective wealth can only exist in the real world. E.g. you own a house, a car or a factory. When you deposit money into a bank account, you are effectively delegating wealth and letting other people use your money to obtain wealth in your place. These people net a return because of their wealth and let you have a share of their returns.
When you hoard currencies like Scrooge McDuck then you are neither spending your money, nor delegating wealth management to other people. The money has been taken out of circulation.
Then there is the other side of money/currency, money is a claim to another person's labor, meaning if you fail to act on that claim the portion of labor that this claim represents has perished because of unemployment. The solution to this problem is inflation. If labor perishes, make the claim to that labor perish as well. If you do not want to lose purchasing power you will have to invest your money. Banks let you deposit and make your money available to those who are interested in investing on your behalf. You can also put your money into financial assets that directly represent physical wealth such as ownership of a company. If banks and financial assets fail, you can still invest your money yourself.
>Unlike other currencies, the supply is not at the whims of fed officials and politicians.
Considering the vast majority of cryptocurrencies meet their demise at the hands of their creators I'm not exactly sure where the difference is. A lot of cryptocurrency people talk about how the background of the team behind the cryptocurrency is very important.
Currency is transactional, not a store of wealth. I'd say it's a bad idea to store your wealth in currency, absolutely, and I'd cite it's lack of inherent value as the reason why.
It's surprising to me how ignorant people commenting here know about cryptocurrencies. I would have thought this group would be immune to being so confidently incorrect but once in a while a topic comes up that I know a bit more about than average and I suddenly realize the Hacker News commenters are no different than any average bunch on a Facebook group but perhaps because they are experts in their narrow field they feel it makes them an expert in any field perhaps. All the better for those of us in the know though I guess: Keep calm and HODL on!
Crypto is mostly a store of wealth, similar to a currency. It's inherit value is that it is fungible, transferrable and scarce. Unlike other currencies, the supply is not at the whims of fed officials and politicians. The difference is that you can't pay taxes directly in crypto. I like it as a hedge.
Do you believe all currencies are pyramid schemes with no inherent value as they're based on nothing?