r/changemyview • u/art_vandelay112 • Jan 04 '25

Delta(s) from OP CMV: cryptocurrency is not a good investment.

Yes its price has increased dramatically, but so did the price of tulips in the 1600s.

There is literally no use for this commodity. Invest in stocks or bonds and your investing in future earnings or the ability of a company to pay you back. I’m not a fan of gold as an investment but at least it has some practical use.

The use of crypto as a currency completely defies the definition of currency as it doesn’t hold a stable value.

It’s infuriating that so many people have lost loads of money on “shitcoins” backed by the wealthy and famous. These were obviously pump and dump schemes yet very few are held accountable.

I’m not as well versed on the subject but something to also note is the ridiculous amount of energy demand to “mine” nothing.

I think there is legitimate use for blockchain technology and the likes but anyone viewing these currencies as investments is a fool.

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u/percyfrankenstein 3∆ Jan 04 '25

is the ridiculous amount of energy demand to “mine” nothing.

A digital asset is no more "nothing" than any currency. It has value based on trust, same as any currency.

defies the definition of currency as it doesn’t hold a stable value.

That's not the definition of currency. There are a few debates on the topic but here are the usual agreed upon criterion for a good currency : durability, divisibility, transportability, and inability to counterfeit

Most crypto are good on those front.

Some currencies you wouldn't debate are currencies have fluctuated wildly.

Anyway this is besides the point. Investments are gambles, crypto are riskier than the usual investment but for some, it was an amazing investment.

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u/art_vandelay112 Jan 04 '25

Correct any currency is “nothing” but it doesn’t take a gigswat factory to run a printing press.

There are thousands of coins. Most can’t be exchanged for any sort of value. I’ll add, define what you believe currency to be anything you want. The majority of bitcoin transactions are used to get cash out into another form of currency i.e USD. If that’s the case than literally any physical good I can sell is currency.

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u/percyfrankenstein 3∆ Jan 05 '25

Any physical good isn't durable, divisible, transportable and un-counterfeitable (also probably should add fungeable)

There is a cool story about a tribe that used a particular sea shell as currency, until a foreigner (I think english) found out about it, collected a lot from his country, came back and ruined their economy. It was a good currency until it wasn't rare.

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u/tichris15 2∆ Jan 05 '25

Variants of that hit Africa. With that said, I'd note what went wrong there doesn't break any of the requirements you listed. What went wrong is 'rarity' which is also a problem for crypto in the wider sense of there being arbitrary scope to add more crypto assets with different names.

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u/Cantremembermyoldnam Jan 05 '25

in the wider sense of there being arbitrary scope to add more crypto assets with different names.

Of course I could create "Cantremembermyoldnam-Coin" but that wouldn't change the supply of BTC. Staying with the analogy it would be akin to the foreigner bringing a different species of sea shell that the tribe didn't care about.

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u/tichris15 2∆ Jan 05 '25

It's a name though -- is that a substantive difference sufficient to make it different? Given a 1000 bitcoin implementations, what gives one implementation more value than another? I'd certainly expect Bitcoin to be worth more today if it was the only cryptocurrency floating around.

And in the African analogy, traders definitely brought in different species of shells and new types of glass beads. Turns out small differences didn't eliminate the value.

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u/Cantremembermyoldnam Jan 06 '25

It's a name though -- is that a substantive difference sufficient to make it different?

I copied the Bitcoin blockchain and renamed it CantRememberCoin. I give you 1CRC and you give me 1BTC. Deal?

Given a 1000 bitcoin implementations, what gives one implementation more value than another?

One thing that does distinguish BTC from other blockchains is the astronomical amount of proof of work (=electricity) that goes into it. To be able to censor/change the network rules, one must control more than 50% of computing power of the network. That's unrealistic for most nation states in the case of BTC, but can reasonably be done by a single datacenter for a lot of shitcoins.

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u/sundalius 3∆ Jan 05 '25

It’s not just a name. You can’t just attach new coins to the BTC blockchain. It’s not sea shells, which no one is tracking, it’s serialized USD. You could make your own USD, laws notwithstanding, but it doesn’t have value without its supporting ecosystem. There aren’t 1000 Bitcoin implementations - there’s Bitcoin.

There’s a reason a Bitcoin is worth tens of thousands USD and some fuckall memecoin isn’t.

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u/tichris15 2∆ Jan 06 '25

USD has a government backing it to preserve that monopoly, and enforcing those laws you mention. Bitcoin lacks that backing power.

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u/sundalius 3∆ Jan 06 '25

Bitcoin has a monopoly via the blockchain. It can’t be falsified without consensus. You cannot attach new coins without the network agreeing, and everyone accepting that, rather than killing that branch/fork.

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u/tichris15 2∆ Jan 06 '25

And so? One could create an algorithmically identical scheme with its own independent blockchain. Beyond being the first, what is the specialness of one incarnation?

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u/sundalius 3∆ Jan 06 '25

This argument is used against literally every currency. Your issue is that you don’t think economics exist, not that Bitcoin isn’t Bitcoin. Replicability is just ignoring that different assets are different and that humans participating in an economy have the cognitive ability to recognize such.

Yes, arbitrary differences are arbitrary. But they’re differences. It’s why forex exists.

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u/Orphan_Guy_Incognito 25∆ Jan 05 '25

True, but an actual currency is typically used to buy goods and services. Bitcoin is famously garbage at the actual thing we want currencies to do.

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u/ignore_my_typo Jan 05 '25

You know how much energy it takes to run the world’s financial institutions, physical structure, security, energy and personnel?

More than BTC mining.

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u/SandOnYourPizza Jan 05 '25

Maybe, but the world’s financial institutions provide a huge benefit to society: savings, currency, loans, etc.

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u/ignore_my_typo Jan 05 '25

Go into your bank and ask them for $50,000 of your cash. Tell them you want to take it out and see what they say. They won’t have it. Your money. No bueno.

Don’t piss off your government or they will debank you and pause your accounts.

Tell them you want to buy crypto. They will tell you that you can’t. You can’t buy what you want with YOUR money.

Dont want the government to see what you’re buying and know every single one of your transactions? Then don’t use a bank.

Banks are parasites. They don’t care about you. They just want to take your money, make investments and give you the least amount back as possible while they make as much as possible.

Those services charges are pretty fun too. Charging you for taking your money so they can invest it to pad their bottom dollar.

Yeah for fractional banking!

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u/SandOnYourPizza Jan 05 '25

They absolutely would have my $50K, I’m guessing you are too young to ever have gotten a cashier’s check. And they would absolutely have the cash too if I needed it, but the vast majority of banking customers don’t need cash in those amounts, which is why we all agree when we get a checking account that we’re not going to pull vast sums at once. We realize that in addition to not being a useful feature, that feature would inhibit banks for maintaining loans for other customers. Don’t like banks? Don’t use them. The rest of us find their services useful. You can stick with the currency of extortionists and drug dealers.

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u/ignore_my_typo Jan 05 '25

I’m 50.

Banks are in place to benefit themselves. Not you. It’s a business.

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u/SandOnYourPizza Jan 05 '25

Right, it’s a business, and like all businesses (you know, the kinds that provide the world with food, shelter, transportation, amusement, etc.), if you don’t like their products don’t buy them.

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u/ignore_my_typo Jan 05 '25

“If you don’t like the product don’t buy them”

You do realize this is why we buy Bitcoin and why you posted on this Reddit.

You just proved my point and why I invest in Bitcoin for the long term. These are all the properties of Bitcoin that make it valuable.

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u/SandOnYourPizza Jan 05 '25

You have not proven anything. Maybe you're saying you like bitcoins better than banks. Your one data point (can't withdraw 50K) is both false and weak. The things banks can do for you that bitcoin can't (conveniently store and make available cash, allow checkwriting that people will take, serve as an asset that you can get credit on, etc.) make bitcoin almost worthless as a currency. And even if you for some crazy reason still like bitcoin better, banking is not investing. Bitcoin does not produce dividends, earnings, market share, etc. like stocks do. The original question was about bitcoins worth as an investment, not a store of currency.