Topic: Bitcoin is a stock (Read 3997 times)

+1 on this one.

Most people say that bitcoin is backed by the miners, but this is not true, it is secured by the miners. Bitcoin is backed by the bitcoin related economy so as this economy grows the price of bitcoin will generally grow, although owners of bitcoin will not receive any payout from the growth of the economy other then higher prices of the bitcoin they own.

This is the same for other currencies as well.

Not that its entirely wrong to say that bitcoin is becoming like a stock market, It would be accurate to say its becoming more of a digital gold or jewel. Getting scarcer and higher as time pass by.

This is really not true. The federal reserve and other central banks do not back their respective currencies. The economy of the country (or economic zone) that issues the currency is what backs the currencies.

When central banks'' profit increases, the value of the underlying currency do not necessarily go up.

And owning dollars is an investment in the company called The Federal Reserve.

Holding euros then you are invested in the European Central Finance Company.

Hold yen and you are thus invested in the CHINA CORP.

Holding bitcoin supports the value of SATOSHI INC.  

Then SATOSHI INC can issue more stocks (at the rate of 3600 a day) and they are currently trading for $600/share.

Thus SATOSHI INC operations expand, and joint ventures are being formed in alternative but related stock options. (which you may swap)

DRK KOINS Inc.
DOGE Inc.
POT Inc.

etc.

+1
I would also add that unlike a stock bitcoin does not need your money. If I bought a stock then the price dropped 50%, I might sell at a loss. That is because below a certain valuation the company may become insolvent and collapse. That is not the case with bitcoin which does not need your money and can continue to operate no matter the price. 

With a stock you are sharing profits. With BTC you own something of value that can be spent across the world.

No because you can't do it.   Its price derived purely from speculation

What and do all the thinking for you?

I would have to say that a stock ceases to be a stock when the company behind it goes out of business and liquidates all of their assets.  Or perhaps during a merger or acquisition you could say that a particular stock no longer exists and is converted to shares in the new larger company?

It sounds to me like you've been describing shitty stocks.  Arguing that the overwhelming majority of the stocks out there are shitty investments because they are overvalued or because they don't pay any dividends would make a lot more sense.

OK please give us w bitcoins fundamentals then.   Explain why its valued at $590

And try to break it down as line items w prices.   Not abstractions

Ok Satan, thanks for the advice. So when is a stock not a stock? When it is a cat?

Stocks are not all the same, eventually, they become something that isn't really a stock.

Well at least you are contemplating reality. But the point you are missing is that fundamentals are arbitrary and invented. One company's valuation has nothing to do with another. The Beta for an individual stock is nothing more than consensus mind control. Amazon itself is a perfect example, where profits have been eliminated from its fundamentals as its growth potential and global domination trumps any short term profitability.

In reality, ALL fundamentals are arbitrary and fiction for any stock, as is your effective "ownership." Embrace them at your peril and do so only to help you sleep at night. "Fundamentals" are nothing more than mass justification and sales fodder for putting your hard earned money in ownership of digital fiction.

Bitcoin is a limited ownership in an economic entity that is everyone refuses to label as one thing or another, primarily because of stupidity. So figure out what "Fundamentals" the whales use to drive Bitcoin price, get rich.

Yep. Bitcoin is not some magical bubble machine driven by mass hysteria and panic purchases. It is ownership of an asset whose price is driven by basic things that can be measured. Those basic things are more like a stock's basic things than anything else.

Don't let these guys discourage you and don't let definitions get in the way of sound logic.

I tried explaining to my neighbor earlier today that her cat is a dog.  "Look!", I said, "She's covered in fur, walks on four legs, has four paws, and a tail. Just like my dog! Eureka! Your cat is really a dog!"  She rolled her eyes at me and tried to tell me I was stupid, but you and I know that she's the stupid one.  I'm sure they'll get it some day.   

Unless the definition and words that you so vehemently defend is complete BS for 90+% of investors. Keep clinging to your precious "definition" but rest assured the masses own nothing, have no power, and will only receive a return if the consensus of the rest of us buy into the vision that the asset's fundamentals and opportunities will continue to improve.

I hope that "wikipedia article" nonsense wasn't directed at me?  
Your last post confirms that you were talking about publicly traded stock, which is all I was suggesting to twiifm anyway.


What do you have to say to that though?

I know what you are talking about.   Thats why I suggested you look up what a stock is.

You ever seen "The Social Network".  How Zuckerberg diluted his stock to cut out his co founders?

Same company,  same stock.   Regardless if its public or private.

We can debate whether BIDU is worth its current price.  But there's no debating the definition of stock.

Well since you owned an LLC, I think i will shut my dumb ass up. Thanks for setting my ass straight.

Oh, btw I haven't changed my position, you sorry ass LLC shares are not what I am talking about. I am talking about BIDU on NASDAQ, that is what I am talking about.

Dude give it a break.   You obviously don't know what a stock is.   I had an LLC and I issued stock to the co-founders and investors.  When the LLC was sold the stock owners had claim on the assets.  Also during the life of the LLC,  we bought out one of the co-founders.   A stock is just equity in a company

Just because some stocks are used for speculation doesn't mean the definition of stock changes.

Bitcoin is more like a commodity.   Like owning bushels of corn or barrels of oil.   This is so basic any high school student should understand

Its both a currency and a commodity.   But not a stock.

But as a currency theres not really any markets that are priced in BTC.   Places like newegg,  the goods are still priced in USD and coinbase or bitpay does conversion for you.

I think its more similar to a commodity than currency.   Trades like a commodity as well (volatile)

How are bitcoins a commodity?  Are all currencies a commodity?

it may be more accurate than OP's statement, but it's not the full story. it's like owning a currency and commodity (investment) rolled into one. there needs to be a new word for it, because that goes over most peoples' heads.

This is a much more accurate description of what bitcoin is then how the OP describes bitcoin.

Owning bitcoin is like owing dollars, or euros, or yen. It is a currency.

If a share of stock you own say NFLX, BIDU, TSLA pays no dividends, has no material voting rights, will receive no money if the company goes bankrupt, and then you insist on referring to wikipedia to "PROVE" what a stock means, well then you are missing my entire point. We all feel better about what is written in a wikipedia article, however, that doesn't mean your stocks mean anything.

In practice, a share or stock means nothing, you own a piece of fiction, a piece of a limited asset backed by NOTHING other than our collective delusion.

Bitcoins and stocks are digital measures of value where the market agrees every day on their worth.

Oh and if you own enough stocks, then maybe you have enough voting power to control the organization and make the changes you need to make your stocks worth more. Hmmm, Same can be said for Bitcoins.

If bitcoin is a share then so is fiat. They are both currencies, only one is tangible and one is digital. In some cases bitcoin can be tangible, but in general fact stocks are simply owning part of the company.
You own a share you own a part of a company, you own a bitcoin you own a piece of currency like you do with cash.

We have to start with the assumption that he's comparing abstractions or there's really no debate.

...and I apologize if this seems like I'm splitting hairs.  But "stock" generally refers to the equity shares a company offers to the public.
Investment in private companies is usually via VC firms, angel investors, and large institutions, or from friends & family I guess (depending on size).
Those investments wouldn't typically be called "stock" - and would actually be more like investing in bitcoin than owning stock in publicly traded companies is.

Bitcoin is making stock based companies obsolete. Your terminology is archaic to us as horse-drawn carriages.

A stock is just an ownership in a company.   The company doesn't even need to be public.  You can incorporate and issue yourself a million shares if you want.   Then sell some shares to investors who want to speculate that your company will do well in the future.

OP lacks basic knowledge.  Instead of taking my advice to look up the meaning of 'stock' he prefers to be ignorant.  Its not even that complex

I can see some of the similarities that OP bases this conclusion on:

- You buy something that has a value based on what the market has agreed upon.
- Ownership is somewhat ambiguous since you don't gain anything tangible*, like gold (or other physical commodities).
- And you don't have much of a say in the "operations of Bitcoin", or in the operations of the company you buy and hold stock in.
- The price could go up or go down... to the moon or to zero.

One might suggest that you do gain something tangible* - the unique private key for some paired public key that you own.
But the main flaws of your argument are in your understanding of how stocks are valued...
Bitcoin is a speculative investment.  People typically buy bitcoin because they expect it to be worth more at t, where t is some time in the future.
Or they invest because they believe that the value of bitcoin is less volatile (or has greater upside) than their traditional currency.

The way you portray the stock market, you assume those are all speculative investments.  Perhaps you've heard the phrase "do your homework" in regards to stocks?
There are methods to estimate the intrinsic value of a stock - the discounted cash flow formula is standard.
You can also use Price to Earnings ratio, PEG, etc. etc. to compare company A to company B (typically within the same sector).
Amazon's price is ~800-900X earnings......so then you would say, "see, it's magic!".  But no, it isn't.
P/E is just one way to understand the price relative to similar entities.  Using the DCF formula, you would find Net Present Value...
for a firm with extremely high growth, and a dominant position (+ high barriers to entry) - like Amazon - the NPV calculation includes more years.
While there is certainly some guesswork involved, leading to differences in estimates and recommendations by analysts, this isn't just pure speculation.
So, intrinsic value calculations will change based on concrete numbers from the quarterly income statements/balance sheets of these companies.
Investors act accordingly and the price changes.  There's also movements based on missing or exceeding consensus estimates, guidance from the firm, etc.

Then there are the obvious differences between bitcoin and stock that have already been mentioned.
You might have a better case comparing some characteristics of penny stocks to bitcoin...
but your fundamental understanding of stock valuation needs some work.

where do you think people will be buying it in the future? in a totally decentralized way? if BTC is going to be mainstream, i still see this as the typical way of acquiring BTC.

What am I shilling?   Did you look up 'stock' yet?

A lot of things have prices that go up and down and is traded.   Doesn't make it a stock

Do some basic research on any stock of your choosing and maybe you won't be such a shill.

Bitcoin behaves as both a stock and currency... what's with the dichotomy here?

Huh?   Look up the definition of "stock"

Can treat it as a stock, investment instrument or money. This is free market after all.

The purpose of my post is to help figure out how to value and predict the future of Bitcoin. It is actually the misunderstanding of labels that create a problem for deciding what Bitcoin is. If you contemplate what a stock actually is today, and I mean most stocks that the average person owns, then you realize that those stocks are digital assets that have value only because of consensus.

What is the difference between Bitcoin and a share of lets say BIDU on NASDAQ? Over the years we have collectively agreed that BIDU value should be correlated to some composite of revenue, profit, and potential. It is collective fantasy that we value BIDU in any way at all, but as a group we all somehow agree that BIDU is tied to these "fundamentals" so we all can sleep at night or some pathetic reason.

Almost all stocks today do not pay dividends and you will not receive anything if they go bankrupt. It is you that has made a mistake. I am comparing bitcoin to what everyone calls a stock today. What you think of as stocks is not actually representative to what stocks have become.

Money actually only needs to be a medium of exchange, a store of value and a unit of account. That is  it.

bitcoin is not a stock it is the future

well the price is a balance between supply and demand.
demand can't be fixed because it will always depend on the will of the people to exchange goods and services for money.
but at least the supply side is such as to support a stable price (no possibility of inflating the supply).

that is the best design that can be achieved for money.
stocks and fiat currency have volatility in both supply and demand.

the reason bitcoin is so volatile despite its superior design is the low volume on exchanges (relatively to fiat and gold).
considering it is only 5 years old i would even argue it has been remarkably stable in the past few months.

Money also needs to be a store of value (Related to Point 6). Although its supply will not grow arbitrarily, its price is highly volatile. This is a negative for bitcoin (in terms of being classified as money, not negative for traders)

bitcoin is not a stock, bitcoin is money.
in fact it is the only thing besides precious metals that has all the properties that money needs to have.

money needs to be:
1. a medium of exchange - it should be easy to give money to another party in exchange for goods and services.
2. it needs to be portable - it should be easy to carry around.
3. it needs to be durable - it should not be easily destroyed over time.
4. it needs to be divisible - it should be easy to split it into smaller units.
5. it needs to be fungible - all units must have the same value, it should be hard to counterfeit.
6. it must retain purchasing power over long periods of time - its supply must not grow rapidly and arbitrarily.

both fiat and stocks fail at 6 as they can be created by corruptible men at will.
precious metals are protected by the laws of nature from being created arbitrarily.
bitcoin is protected by mathematics from being created arbitrarily.

It is treated like a stock because most people buy it from exchanges. Once we get past the era of exchanges it will function more like a current than a stock.

people buy stock because they want a piece of the companies future earnings. Bitcoin does not have any earnings.

yes threads like this focus too much on labels, and ignore its utility. bitcoin is stock-like, but it's not a stock. it's also currency-like, but it's not a currency. it's currently in a league of its own, and there is no direct comparison.. that's hwy it's so revolutionary.

I know, right?  Even Satoshi doesn't understand the intent of Bitcoin with all of that BTC he's hoarding.  People like you and me just need to keep educating the masses.

If you want to consider buying Bitcoin as an investment, I think it makes more sense to think of it as investing in a commodity (like precious metal) or an index.

Stocks represent ownership in an organization, Bitcoin isn't an organization is a resource. It's an alternative to gold or silver. Bitcoin can do something that influences it's price, whereas a stock (or the company it represents) can influence its value based on decisions it makes.

One problem I see is that if people start using Bitcoin as intended, as a currency, the value of a Bitcoin (to USD for example) is going to go down. 

OP made mistake. Shares present the ownership of the company. Some companies distribute decent dividends on every financial years. OP chose to buy the shares who wouldn't pay out.If the company you bought go to bankruptcy, you will have the rights to claim back the assets that belong to you. It doesn't mean you lose all. Bitcoin is  not share. The reasons is stated by many times in this thread. I don't need to repeat again.

Bitcoin acts like a stock now mostly because it's still so early and most people are scared to use is as currency, then find out 2 years latter now it's 100x more valuable. Like imagine buying pizzas with the thing now and finding out you could have bought a small car with it. Thats why people are HODLING hard and the whales are playing P&D games on this shit.
Bitcoin has the posibilities to act as currency, but now when it's volatile as hell.

well, it can be done... you can transfer ownership in exchange for something. but that's quite a lot more work than sending some bitcoin.

I don't think that Bitcoin is stock, not in the real definition in market world.
We may say right now that Bitcoin is just virtual currency, still not widely accepted but on the way to become mainstream.
When this happen probably Bitcoin will become part of Forex trade but still not stock.

Such as Bitcoin having ALOT of attributes that Stocks don't have, and stocks having attributes that Bitcoin doesn't. I can't walk into a coffie shop with my smartphone, and buy a cup of coffie with a stock, can i? Do i really need to specify all differences? This is BitcoinTalk forum so i presume that readers have general knowlage of Bitcoin's attributes.

So, to make it stupid proof, if someone sais that "ball" and "apple" are same thing only because they are "round", "green" and "they fall to the groun in some moment", it tells more about that someone than about apple and ball.

Riiight.   So bitcoin isn't traded in evil fiat prices.    

I've also always liked thinking of Bitcoin more as a stock.  Albeit a stock with virtually limitless possibilities unlike evil fiat-based stocks!

Yes Bitcoin is a stock. It is also a commodity. It's also asset. It's also currency. It's also an investment. It's also a protocol. It's also a public ledger. It's also anti-establishment. It's also a solution to a problem. It's also open source. It's also anonymity. It's also freedom.

As long as you didn't say Bitcoin is just a stock, you're absolutely right 

 

Its closer to a currency then a stock. It may also be considered a derivative, like an option.

Just a small correction.   A company doesn't have to be public to issue stock

But yeah bitcoin is not a stock by any stretch

You're going off on a tangent again.  I never mentioned the word "fundamentals".  Shares of stock are issued by publicly traded companies and those companies have revenues and expenses.  Bitcoin does not have revenues or expenses, because it is not a company and therefore it is not a stock.  It really is that simple.  It's not even an argument, it's just a simple fact.

Sounds like you need to take your own advice.  You might want to look into the functions and characteristics of money while you're at it too.  Bitcoin is no more a stock than the dollar, the euro, the yen, gold, or silver are.  These are all forms of money that could be used to measure revenues and expenses, but that doesn't make them companies with revenues and expenses.

Such as.... your high quality response is so enlightening..... ummm actually not

You mention fundamentals like it is a magic word that differentiates Bitcoin from a stock. That word alone is rather meaningless and only represents measurements you use to justify paying X$ for a stock. Bitcoin itself has far more "fundamentals" than gold silver or fiat because of its digital and service based nature.

Suggesting that Bitcoin is different because it doesn't have fundamentals is a silly argument.

Ask yourself what the hell a stock even is, what it truly is and what you are truly purchasing. It is a figment of imagination far more than Bitcoin is. If you think it isn't, do some research.

Huh?  I didn't say anything about being able to find information on Bitcoin, market manipulation, Amazon's share price being tied to profits, Bitcoin's price, or why stocks were originally conceived.  What I did say is that it is easy to find information from Amazon's financial statements and I provided you with a link to that information because you were "baffled" about where to find it.  Whether that information is accurate or not is an entirely different matter, not related to the topic of this thread, and irrelevant to me because I don't own or have any desire to own shares of Amazon.

You won't find these financial reports for Bitcoin, (or gold, or silver, or the dollar, or the euro, etc.) because they don't exist.  They don't exist because Bitcoin is not a publicly traded company with revenues and expenses--it's a currency.

It's green, it's round, it just fell to the ground.....is it apple, or maybe ball?
Drawing conlusions like OP is just plain and simple wrong. OP is comparing only properties that agree with his thesis, and not even mentioning ones that would bury it alive...
Low quality post just to create some FUD or something similar.

Bitcoin is a currency not stock.

Information on Bitcoin is even easier as it is always free and likely not manipulated by con artists. Amazon price tied to profits is pure fiction and is a figment of your imagination, you have been conned by the forces of finance. There is no difference between Bitcoin's price tied to its own imaginary fundamentals and Amazon's valuation of speculation and imagination.

Stocks when originally conceived were true ownership, today that is almost always far from the truth unless you happen to own a different class of stock than what is highly traded on the exchanges.

If a stock has no real tangible meaning, look at BIDU trading on NASDAQ for example, then what the heck do fundamentals have to do with anything. BIDU's profits are no more fundamental to its stock than how many new Bitcoin Wallets are installed for Bitcoin.

The correlation between stock price and earnings and revenues is pure fiction and often meaningless, research beta. Bitcoin could have its own type of beta surely.

You want some fundamentals for bitcoin go make some up.

no, stock is not a bitcoin. its value is pegged on the perceived value of a company's future performance, and can be in almost any industry. bitcoin on the other hand is just pegged on its future utility, but can also be used to purchase goods. bitcoins don't pay dividends; stocks can.

i agree. Bitcoin is far from a stock. It is not a company it does not earn any profits. Bitcoin is a medium of exchange for people to send money anywhere in the world more or less instantly.

Bitcoin does not have fundamental metrics like stocks. Even with the supply limitations, bitcoins which have been bought for much cheaper can always be panic sold driving the price down far beyond the latest production costs. Or vice versa to the upside there are no fundamental limitations. Hence, why bitcoin is not anything like stocks but behaves more like a digital imitation of gold.

I wouldn't say that Bitcoin is a stock, since it doesn't really have any other the characteristics of a stock, other than it is volatile.

It's more a store of value (Also kind of like a stock) but it's esy to exchange, and you don't have to go through a broker to sell/buy it, necessarily. Most often it is possible to just sell it (or buy) person-to-person, no broker required.

Plus, as mentioned, there aren't any dividends or anything associated with them, so the don't have that characteristic, nor are more issued by another person, they're mined by people at a predictable rate.

If you bend the definition of "stock" enough, anything can be a "stock" -- my house, my car, my dog.

It's an extreme simplification and factually not 100% accurate
But i agree that in a narrow sense btc is a lot like a growth stock that doesn't pay dividends for folks who view it solely as an appreciating store of value

What do you mean by fundamentals in this case? Bitcoin supply is known and the emission rate is also known so there are fundamentals in Bitcoin that are a constant.

Its much more then a stock. Buy shit with stock? No, cant be done

Look at the bitcoin economy.
Bitcoins being mined and transaction fees correspond to revenue.
Expenses are the cost incurred to keep the economy going.

And when the bitcoin economy prospers, the value of bitcoin (your stock in the economy) goes up.

Wrong again.  Information from Amazon's financial statements can easily be found here.  There's nothing to be baffled about regarding Bitcoin or Amazon.  One is a publicly traded company and the other is a decentralized digital cryptocurrency.

I rarely post, I am mostly a lurker, but I have to disagree here. Bitcoin is not a stock. It sometimes behaves like it but it also acts like commodity and currency. It's everything rolled into one. It's the answer to the century old question of Capital and the means of production.

Major difference is that bitcoin has no fundamentals like gold. It trades purely on speculation. You can argue that it is worth $1 or $10,000 and still get away with it. Stocks on the other hand are limited to a range supported by their earnings and other financial metrics.

There is an issuing party, it is the software. Bitcoin are issued to miners.

There is an authority it is the decentralized blockchain and the mining protocol.

Bitcoin is more like stock than money because fiat money is issued by fiat, where bitcoin like stock must follow complex public rules about when and how to dilute ownership. In Bitcoin's case the rules or so complex and the process so complex that dilution events are even less likely than stock.

You could ask the same questions about Amazon over the last decade and be equally as baffled

So if bitcoin is a stock, who are the people that issues it as a form of investment? Yes, you can say that bitcoin acts like a stock: there are changes in value, there are exchanges that trade them, and there is the concept of pumps and dumps. However, there are no central authorities that offer bitcoins as a form of investment; people who use bitcoin themselves treat it as one. Aren't the use of fiat similar to bitcoin because it has a "magical value" in which we believe? By your definition of a stock, I can also say that fiat is a stock, which isn't.

Where are the revenues, expenses, and profits?  Nope, not a stock.

Bitcoins have the attributes of and fulfill the functions of money.

i suppose you could say bitcoin is like a stock for some of the reasons you mention. but, by definition, it isn't. i mean, who issues bitcoins anyway?

I have decided that owning Bitcoin is no different than my shares of Netflix or my shares of Bidu or my shares of Tesla.

• Those traditional stock shares are not really ownership of anything.
  I don't get dividends.
  I would never make anything if the company were sold to another company except shares in that company.
  If the company were to get attacked by any number of external forces my investment could be zero tomorrow.
  I can vote but my votes are symbolic emblems of stupidity
  The supply is limited but at any time I can get diluted really. You can say it is unlikely but my years of experience says what happens to a stock valuation is completely out of the average guys control.
  In fact many of my stock purchases over the years did in fact become worthless.

Most common stocks are symbolic shares of nothing, that we all magically agree have value based on nothing other than enough people believe they are worth more than zero to let me trade them to some other shlep that bought into the fraud of modern securities.

Especially since there are now 100+ crypto currencies. Aren't they all just stocks in ideas that we all agree have a value more than zero.

Yep Bitcoin is a stock.