Precisely.
I think your hypothesis is biased by hindsight knowledge of how Bitcoin exploded in popularity among criminals. The creators, whoever they were, would have never known that in 2008. Certainly, the coding and cryptographic knowledge existed in 2008 to create more effectively untraceable versions of digital currencies.
From the view of a government agency back during the genesis days of Bitcoin, it was an entirely valid concern that the fish wouldn’t bite. It would have seemed far more likely for Bitcoin to instead chug along virtually unnoticed, like some penny stock companies of today. So IMO, Bitcoin was most likely the vanity project of a few extremist libertarian / anarcho-capitalist types, which blew up far beyond their wildest expectations.
It’s not really an “investment” in the sense that you are providing capital for Bitcoin to grow the same way you do with a corporation. It’s really more “speculation”.
True, but stocks in corporations that are sold on the stock exchange aren’t raising capital anymore, they’re just traded among investors who are speculating on the future price.
This isn’t strictly true – sometimes companies sell their own stock on the exchange, which would raise capital.
Some stocks pay dividends (and the ones that don’t could pay them if the company management wanted).
Also, stock represents ownership in a corporation that has assets, both tangible and intangible. Stock prices are usually tied to the values of those assets. When the market cap of a stock gets too far out of line with its assets, the stock price is likely to change to bring it back into line. I don’t see any equivalent with Bitcoin.
People often have their own personal definitions of various finance words (and the proliferation of pop-finance works has not helped) but under any reasonable definition of “investment”, buying something that you expect to be worth more in the future qualifies.
I’ll respond to this point that you restated in several different forms here… but blockchain is not enforcement. It’s just a tamper-proof ledger that nobody controls. It is authoritative in the sense that it can be a source of truth for anyone who wants it to be.
It’s correct that any government that can be trusted with a monopoly of force should be trusted to keep authoritative records. But governments have been known to fail and/or lose or destroy archives. In those cases, the blockchain can serve as an enduring, tamper-proof record of the status quo ante. The new government is under no obligation to respect it, but AFAIK new governments seldom want to start from scratch with property distributions. So in cases where a new government wants to maintain at least partial continuity with old title claims, blockchain can provide that.
Yes, that is the main value of blockchain IMHO. It reduces the need for clearinghouses or other parties needed to reconcile contracts and financial transactions. IOW, it doesn’t replace the role of government in establishing laws and enforcing contracts. It just ensures that all parties simultaneously work with the same version of the contract.
Which to me, sounds more like a boring back-office operation than something you throw money into expecting a %1000 return.
I remember a few years ago, a lot of talk about how the blockchain technology might be useful for tracking all sorts of things independent of being used with cryptocurrencies and then hearing, no, it’s not that useful.
A distributed system only works if people have some incentive to host pieces of the system. What’s the incentive for individuals to host part of the government land-ledger system?
I’ve seen it suggested (but don’t have an immediate cite) that a small number of NFT owners sell the pictures among themselves, creating an illusion of a robust marketplace. Then a guy like me thinks I’m going to get rich as well, pay someone $250k for a jpg, and find myself unable to sell it for any profit. While that level of collusion would be hard to prove, it is known that a small group of NFT owners are driving most of the profits and people who aren’t “whitelisted” find it much harder to make money.
Namely, OpenSea data showed that whitelisted investors who sold newly-minted NFTs profited 75.7% of the time, versus 20.8% for those who didn’t make the whitelist. Additionally, the data suggested that it is almost impossible for non-whitelisted collectors to achieve outsized returns on newly minted NFTs.
Overall, 78% of non-whitelisted buyers lost more than half of their initial investment after selling their newly-minted NFTs. On the other hand, 78% of insiders who made the whitelist profited upon resale, doubling their initial investment more than half of the time.
I’ve seen the same pump & dump claims made about Bitcoin where much of the existing Bitcoin is owned by a very small number of people and the remaining Bitcoin being mined is by an even smaller group.
What they discovered is that at the end of last year, the top 10,000 individual owners controlled about 8.5 million Bitcoins while the top groups oversaw closer to 5.5 million Bitcoins.
Digging deeper, the NBER found that the top 1,000 individual investors accounted for about three million of the 8.5 million Bitcoins controlled by the top 10,000 investors.
[…]
NBER found that the top 10 percent of mining operations control around 90 percent of the Bitcoin mining capacity. What’s more, just 0.1 percent of miners (about 50 operations) are responsible for half of all mining output.
(There’s ~18.8m Bitcoin having been mined out of a total possible 21m so that group controls about 45% of the total supply, possibly more)
Cool, so all I need is a force of well-armed “volunteers” and I can own any piece of property I want. Hmmm, sounds like there is a term for that…
Bitcoin and other crypto-currencies can’t be taken seriously until people stop referring to how much they are worth in $. Heck, even the kip has more value than bitcoin. There are useful things one can buy with kip-at least in Laos. (I am not picking on Laos, I just have always thought kip was a great name for a currency. Kind of like the buck but official)