Topic: Bitcoins are most like shares of common stock - page 2. (Read 15132 times)

1.38M BTC right? It is much less in USD at the moment I think.

Stock represents a "share" of ownership where the sum of all shares equals 100%

Thus each bitcoin represents a percentage of the total.

Bit coins have a "market cap" of $1.38M

The only "moral" inflation is a "stock split".

This is by far the best way to think about bit coins.  It clearly explains why they have value, where the value comes from (productive employee/owners).  

The only reason not to think about it this way is legal issues regarding issuing stock.   But this is the fundamental problem with all regulations, there are always "multiple ways to think about the same thing".  Changing the description does not change the nature of things though.

I want to be the first to say "No, they are not!"

I'll edit this to support that statement later. :-)

--- Edit ---

It is very important to any new venture to NOT define it in terms of a well known scam. No one here would say bitcoin is like a Ponzi scheme except without the scam part.

But that is what you are doing by saying, it's like issuing stock in a corporation, except without all that bother of actually creating a product. Let's just consider the stock the product and get right to selling it! It's a limited edition product, so its price will vary based upon supply and demand.

Trust me, that metaphor has been used for thousands of scams. It is equivalent to a "red flag" warning to all authorities.

You are really much better saying bitcoins are like sets of collectable poker chips. Some people will want them, some will not. If lots of people want them you can sell each poker chip separately.

There has been a lot of debate about what Bitcoins are -- i.e. currency vs. commodity. Also there has been a lot of debate about inflation vs. deflation with respect to Bitcoins, whether people would lend them, at what rates, etc.

I think the most apt description of Bitcoins is that they are shares of stock in this communal Bitcoin enterprise we are undertaking. It is a lot like being part of a company (right now a very small company) and being paid in stock shares. There are a fixed number of Bitcoins, as there are a fixed number of shares in a company (barring new issues/etc.).

The primary value of Bitcoins right now is the hope that they will someday be worth significantly more than they are right now. For that to happen, the Bitcoin enterprise as a whole needs to gain collective value. We, as employee/owners of Bitcoin need to generate that added value. The most obvious way is to facilitate internet commerce by bartering shares of Bitcoin for other goods. The collective computational effort of all the employee/owners helps ensure that the barter is fair by keeping a record of each transaction. The individual efforts of some Bitcoiners are helping to make the barter of Bitcoins easier or more useful.

Regarding lending/borrowing of Bitcoins, to me it is analogous to lending/borrowing stock. The primary reason to borrow Bitcoins would be because you think they are overvalued and will be worth less when you have to return them. When you borrow the Bitcoins, you can sell them now (barter them now) and hopefully it will cost you less to buy them back at a later date so that you can return them to your lender (probably plus a fee).

In essence, Bitcoins are like a "direct public offering" of stock in the Bitcoin enterprise.