Reply to post: Re: Easy to understand

Cryptocurrencies to end in tears, says investor wizard Warren Buffett

jmch Silver badge

Re: Easy to understand

"I find it amusing that people argue the underlying value of cryptos is worthless (a notional concept) while at the same time buying banking shares which have proved historically to be worthless time and again when confidence evaporates"

Banking (and any other company) shares are not worthless, they are backed by the assets and revenue-generating capabilities of that bank/company. Of course stocks etc can also be grossly overvalued, but you can look at their balance sheet before you buy. In case someone tries to screw the system, there are legal safeguards in place that are backed up by courts and the force that the state can bring to bear on non-compliance (arrest, jail time etc). Right now bitcoin's value is based solely on 'we think that someone else might pay more for it', and if you can't findsomeone who will pay more for it, the whole house of cards comes crashing down.

Of course the value of stocks and shares is also to an extent a 'smoke and mirrors' built on the collective trust in the rule of law, and the legal system does not always work ideally,but it's highly unlikely that shares in Apple or Google are suddenly going to crash, whilewith Bitcoin I think it's a matter of when, not if.

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