But what about all of the real money that low-information retail 'investors' put into the crypto ecosystem as a result of the social media hype? Im not being facetious, isn't there potential future cash flow in the scam?

lol. Now repeat for gold.

Same for USD, EUR, etc.

Correct. People aren't going to lend you money based on a collateral of less money. What is your point?

Just pointing out the flaw in NNT's reasoning. Obviously, USD (and EUR, BTC, CAD, etc.) has value despite lacking a cash flow. Essentially, it's worth something because people believe it's worth something.

> Obviously, USD (and EUR, BTC, CAD, etc.) has value despite lacking a cash flow. Essentially, it's worth something because people believe it's worth something.

Don't know about that but it seems an accepted fact, even here on HN, that it's worth two digits less than 18 months ago (due to inflation).

Kinda hurts.

bitcoin has failed to satisfy the notion of currency either https://www.fooledbyrandomness.com/BTC-QF.pdf

Btc is a more akin to a commodity like gold, which also has no cash flow. It can’t be valued by dcf’ing cash flows, hence methods like stock to flow for valuation or comps.

Pos assets like Eth also have a running yield so you can discount cashflows on those.

Gold and other precious metals are largely maintenance free, do not degrade over an historical horizon, and do not require maintenance to refresh their physical properties over time. Cryptocurrencies require a sustained amount of interest in them.

This is something of a categorical error, and I'm surprised NNT would employ such sophistry.

Plenty of things have value that are not securities or contracts or bonds subject to net present value of discounted future cash flows. Gold, precious art or houses are all valuable but have zero (or negative) value under discounted cash flow analysis.

The proper way to interpret discounted future cash flow analysis of crypto is to say that crypto isn't a security. That isn't even necessarily true, since something like an Ethereum token could in fact have future cash flows and be security-like, but it is true for Bitcoin.

The problem is that the utility of crypto in the real economy is quite low, so its price is driven almost entirely by speculation, with some niche uses like being a relatively stable medium of exchange in failed state-economies like Venezuela. If you wouldn't have a reason in a functioning economy to buy anything beyond drugs with Bitcoin (and the public nature of its ledger makes even that use case suspect), then it won't have stable prices. That's a vicious cycle undermining BTC.

If Ethereum had one or two killer apps, I have a feeling Bitcoin would become both price stable and much more valuable. But that's a big "if." Crypto kitties, NFTs and weird monkey photos aren't it.

Idk about gold, but I'd argue that both houses and art have discounted cash flows if you decide to rent them out (or maybe avoiding paying rent is a sort of cash flow for your budget)

I don't know anything about art, but houses have positive discounted cashflow - at least, they do in the UK. Old houses tend to be worth more than new ones, and rents are currently going up steeply. Sale prices seem to be falling a bit, recently; but rising house-prices keep governments in power, so I expect the increasing prices to resume soon.

I'd argue that automated market makers are one of the killer apps, as they solve the double coincidence of wants.

The value becomes clear when you think about the amount of resources spent on that problem in the traditional financial markets.