Shares give you a stake in a productive(hopefully) enterprise, cryptocurrency does not give you anything but a token.

This is the problem that Buffett has with cryptocurrencies.

When you buy shares in a company you are buying claims to its future earnings at least in theory. Theory being that should the company not serve shareholder needs you can force the company to distribute the earnings/dissolve/merge etc etc. (Not going into the whole modern abomination to strip lesser shareholders of their rights to vote as Google, Facebook, Snap have done with their tiered stocks).

When you are buying Bitcoin or any other cryptocurrency and yes that means ICOs too you are buying digital tokens with no claims to anything besides being a proof of having that token. It is solely 'castles in the air' which Keynes so long ago stated regarding stock market but in the stock market it is not the sole factor.

In some ways cryptocurrency is closer to regular currency but not backed by the government's mandate to receive taxes in said currency.

In other ways cryptocurrency is closer to tulips,gold,MagicTheGathering cards in that the value is based on something that some number of people agree on(ie the market).

Except cryptocurrency has no utility besides being a token, wherein tulips, gold and MagicTheGathering cards possess some utility outside being a token of exchange.

One: Thank you for helping rationalize that my Magic The Gathering habit isn't a problem.

Two: I know you said >Not going into the whole modern abomination to strip lesser shareholders of their rights to vote as Google, Facebook, Snap have done with their tiered stocks

However if you want to argue you're problems with crypto (there are many) we need to make arguments using the way things are in the real world.

Given I'm a retail investor. In one universe I place a bet on Snap for 50k. In another I took that same 50k and put it into bitcoin. In both universes my bet goes bad, both asset's price per unit goes to 0. Snap goes through the process of being liquidated. Remember I'm a retail investor, I own common stock.

Now am I better off in one universe over another? I'd argue that I'm not. However if I were Warren Buffet, I'd have been much better off bought Snap as I would have preferred shares.

You might not be better off in either universe but my reply was regarding difference between buying cryptocurrencies and buying shares.

Buying shares is like investing 50k in your Uncle Eddies seashell harvesting venture. In return you receive 50% share in his venture that is you get half of all future seashells harvested by Eddie.

Buying cryptocurrencies is like giving 50k USD to your Uncle Eddie and getting some seashells back but that is it! There is an active market for these seashells and price goes up and down.

However you do not get to claim any more seashells produced by Uncle Eddie.

Buying common shares implies certain rights to some enterprise while buying cryptocurrencies implies nothing.

Facebook and Snap became part of most people’s lives within a few years. Bitcoin has been around for 10, and aside from trading bitcoin, has found very limited use. That’s what makes it different. Every prediction for what Bitcoin would be good for, and what would justify its price has failed to come to fruition.

I believe Venezuela proves you completely wrong. You should read up on what is going on there with Bitcoin. What Satoshi envisioned is actually happening there.

The fact that bitcoin has gone 10 years, with limited use, to me signals just how amazing the technology is. Ten years is nothing for a tech that can last 1000 (or more..).

What's going on in Venezuela with Bitcoin? From googling, it sounds like a small fraction of the population is setting up mining operations because electricity is subsidized enough to make it profitable. But I'm not finding anything describing significant adoption of Bitcoin as a currency.

Last I heard about Venezuela and bitcoins, people there were using the "free" electricity to mine bitcoins, contributing to the rolling blackouts. And then using the bitcoins to import overpriced stuff. Yeah, you shouldn't give people electricity flatrates, because of stuff like this. This is why we can't have nice things, this is why socialism doesn't work etc. But the bitcoin miners are really destructive in this case and not something you should praise.

You need to read up about bitcoin.

Bitcoin’s success in Venezuela is because it is a inflation hedge. It has allowed Venezuelaeans to hold on to their savings and out of reach from the government’s ability to confisticate wealth via inflation.

It is working exactly as Satoshi intended it to.

Facebook actually makes money. That's the difference.

What is money really? Is it just people's attention? Isn't that what Facebook is capturing then selling off to advertisers?

Isn't that what Bitcoin is doing as well? Capturing people's attention as well as development resources (minds/energy) from some of the smartest people right now?

The stock market is relatively stable. Bitcoin and cryptocurrencies can fluctuate hundreds or even thousands per day.

Crypto is meaningless, stock is actually owning part of a company.

>people invest on the basis that there'll be huge growth in the area of blockchain technology and tokenised digital assets in the years to come.

That's been the 'investment thesis' for the past 5-8 years.

And people have been bidding these things up ever higher, because any day now someone's going to figure out something actually useful to do with them...

(And in the mean time if some coiners get to skim a little cream from the irrational exuberance, I'm sure they don't mind to do so.)

But where is any coherent trend line supporting claims of huge growth in the area of blockchain technology and tokenised digital assets in the years to come.?

Seems to be wishful thinking that is completely at odds with the reality of these systems.

Am I missing something?

>What makes an investment in 'this Bitcoin crap' any different from an investment in say Facebook shares or Snap shares? Aren't they just unnecessary digital crap too that nobody actually needs?

There's a fundamental difference between buying shares of a publicly traded company on a regulated exchange and investing in bitcoin. This is quite literally comparing apples and oranges - your examples are not only different in kind, but in purpose. Also, there is a large, rather well funded government institution who aggressively works to make sure the stock market isn't subject to the sorts of abject manipulation, ponzi schemes, and other such unsavoriness that Bitcoin has been subject to. (Side note - watching the Bitcoin market is like watching the last 150 years of finance happen in 2-3 years. It's an interesting object lesson in market manipulation and why the SEC maybe isn't a bad thing).

As to Facebook/Snap being digital crap no one needs - yes. However, just because there's no physical good being created doesn't mean their value is entirely ephemeral/a financial illusion. Facebook/Snap create value by solving a problem people are willing to spend money to solve. Bitcoin creates value by...well it doesn't yet. People invest because they hope that "there'll be huge growth in the area of blockchain technology and tokenised digital assets in the years to come." That's a nice thought, but it's an assumption.

>If Bitcoin remains the gold standard for crypto then it's value will rise accordingly.

It's funny that you mention the gold standard, a standard that was dropped because of its votility, the fact that it was subject to manipulation, and the fact that it benefited some segments of the market FAR more than other.

>...many people invest on the basis that there'll be huge growth in the area of blockchain technology and tokenised digital assets in the years to come.

I think this is undeniably true. However, I think the assumption that bitcoin will be the vehicle for this growth is incorrect, or more charitably, overly optimistic. Bitcoin has accrued a lot of non-technical overhead that I think will prevent it from being used to drive these solutions - things like its association with speculation, the fact that the majority of miners are on the Chinese mainland, etc. I think the growth in blockchain technology will come from companies and individuals taking the concepts of the blockchain and using them to build products with real value (as in, they solve a problem that someone is willing to pay money to have solved). Bitcoin's value (sadly) doesn't come from the technology, which is fascinating and interesting - it comes from the fact that it's created an unregulated market with no barriers to access, which has allowed rampant speculation, incessant hype about 'the technology of the future', and a continual influx of new money to create 'value' that ultimately, has no real value.