81–86 of 86 posts
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What is the difference between something explained by the "Greater Fool Theory", and any of the numerous things that simply increase in value over time due to increased demand and/or rising scarcity? It seems to me the only difference is whether the speaker is predisposed to not like the thing in question.
To qualify for greater fool something must a) overvalued vs its utility and b) purchased on the sole assumption that it can later be resold at a higher value. This leaves you with a surprisingly small amount of assets. Collectibles probably. I think the epitome of greater fool is probably NFTs. Unlike a real piece of art you don't actually own anything unless additional value is conferred to you by owning it from the…
What is it that you actually own when you buy a physical art piece? Is it the actual canvas and the paint on top? If so then that is definitely not worth hundreds of thousands of dollars on its own. Or, more likely, is it the fact that you own the original, and that the artists could never make an exact replica, unlike with NFTs? Even though you can make an exact replica with NFTs, everybody agrees on the original, and therefore the exact replica has no value. With art you could make a near perfect replica, but everybody would still agree upon the original, and therefore the original is the one with real value. IMO NFTs and physical art are still very similar.
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So you basically don't invest in anything because that theory can be applied to any asset.
Most assets are, at least in theory, backed by something that can turn a true profit in an efficient market. Anything that's based on capital-intensive resource extraction can pay a dividend on the profit from that capital. Anything that's based on real estate will go up in price as population increases. Anything that's manufactured or based on IP can pay a dividend based on the value delta between inputs and outputs…
One that comes to mind especially for Bitcoin is that it “could” act as a global store of value, independent of any one geopolitical power. Many countries lack stable and non-corrupt currencies, and many people in those countries cannot trust putting large sums of money in their economy, for fear that they will be taken away from them. If BTC stabilizes in value sufficiently, people in those countries could use it as a store of value—like gold, but easier to obtain. Id argue that the idea of having a digital store of value does increase the productivity of the world, because people don’t have to rely on inefficiently hoarding gold, or paying fees for buying gold in the stock market.
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As I learned from a quotation which is attributed to Mark Cuban, so-called “cyptocurrencies” are collectibles like baseball cards, rare postage stamps, and French impressionist paintings. Fundamentally they're all fads. None of them have any significant inherent value. Typically two types of people purchase them: either avid collectors or speculators. Don't gamble. It's not a productive use of your time. It's also a…
I think you're confusing a Crypto with NFTs. One is virtual money, the other is virtual certificates.
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To qualify for greater fool something must a) overvalued vs its utility and b) purchased on the sole assumption that it can later be resold at a higher value. This leaves you with a surprisingly small amount of assets. Collectibles probably. I think the epitome of greater fool is probably NFTs. Unlike a real piece of art you don't actually own anything unless additional value is conferred to you by owning it from the…
> Unlike a real piece of art you don’t actually own anything What is it that you actually own when you buy a physical art piece? Is it the actual canvas and the paint on top? If so then that is definitely not worth hundreds of thousands of dollars on its own. Or, more likely, is it the fact that you own the original, and that the artists could never make an exact replica, unlike with NFTs? Even though you can make an…
i.e your dumb ape picture could now suddenly become furry porn.
Real art (assuming proper steps to preserve and protect it) will remain as it was while it's in your care. You -own- it, you can take it where you please, store it how you please, etc.
NFTs aren't like real-art at all, they are at best analogous to in-game collectibles - entirely subject to ToS but even those are less predatory and ponzi-like than NFTs.
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Most assets are, at least in theory, backed by something that can turn a true profit in an efficient market. Anything that's based on capital-intensive resource extraction can pay a dividend on the profit from that capital. Anything that's based on real estate will go up in price as population increases. Anything that's manufactured or based on IP can pay a dividend based on the value delta between inputs and outputs…
There are many different lenses in which one could look at Bitcoin and say that it’s making humanity more productive. One that comes to mind especially for Bitcoin is that it “could” act as a global store of value, independent of any one geopolitical power. Many countries lack stable and non-corrupt currencies, and many people in those countries cannot trust putting large sums of money in their economy, for fear that…