When you invest in a stock, you're helping the company to raise capital.

It seems like trading crypto currency is nothing more than putting money into a pool (market cap) and trying to predict when other people will put more money into the pool. No economic productivity happens here except for money changing hands. Is there actual any value in trading coins or is it just money changing hands?

  • When I buy a share of stock, I typically buy it from someone else, not from the company. Unless the company itself is the one selling me the shares (as in an IPO), they don't see a dime from the trade. Trading stock generally does not help the company raise capital. – Nuclear Wang Nov 16 '17 at 16:14

When you have a medium to transfer money without any intermediary, which is deflationary, secure and kinda anonymous, the demand for it is obviously gonna go up.

  • Until something better comes along, or its usefulness otherwise decreases, in which case the demand will go down... – Highly Irregular Nov 16 '17 at 20:44

No there is no economic value, exactly like when trading any other currency.

There lies some kind of value in declaring trust in a currency, or the legal entity that stays behind a currency. However, with bitcoin the trust is shared among the participants. So with, investing, you declare your trust in the existing participants. But besides that trust, there is no value.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.