Cryptocurrencies Overrated

[james.hendrickson]

Because the stock market is looking pretty frothy, I've been eyeing some alternative asset classes...like cryptocurrency.

What blows my mind about a lot of these is how speculative these markets really are. The latest is chain.link. Its trading at something like 9.89 bucks, and people on some forums are saying its going to go higher. This seems insanely speculative to me.

[kork13]

Yeah, not going anywhere near crypto currency. 1-10 scale for speculation, if oil & gold are an 8, crypto currency is about a 400. They don't follow traditional market forces, they're totally unregulated, and their value is tied to absolutely nothing. That'll be a hard pass.

[james.hendrickson]

Another problem with a lot of cryptocurrencies is the lack of a long term track record. The asset class is so new that there really isn't a good long term data on performance, or how crypto correlates with other assets.

[bjl584]

No way would I touch a cryptocurrency. Beyond speculation and total dumb luck if you end up with a winner.

I'd rather look at real estate as an alternative to the markets.
Or even something like the resale market. Ebay, Craigslist, etc.

[james.hendrickson]

@BJL - there are some solid applications of blockchain technology, thats obvious. But this whole sector is pretty much the wild west at this point. Its hard, at least for me, to see where the value is in a lot of these new ventures. For sure, the company that gets blockchain and cryptocurrency right will hit it big...but which outfit will that be? Its beyond my ability to tell.

[JBinKC]

I agree its currently too volatile to be functional as a currency but at the right times it can act as a store of value. It also can be hacked/stolen if your unlucky but I do like the concept of limiting the number of units and provided it is designed for the good of society. I am 100% certain when central banks begin to adopt it it will mean a total Orwellian world.

When Modi confiscated the large currency bills in India in Nov/Dec 2016 I thought that would be a fundamental catayst for the sector and sure enough I made a 40+ fold nice trade with Ethereum over the course of the year but now with Goldman Sachs owning Coinbase the sector will be contained/price rigged in a similar fashion to gold has in the past.

[kork13]

@BJL - there are some solid applications of blockchain technology, thats obvious. But this whole sector is pretty much the wild west at this point. Its hard, at least for me, to see where the value is in a lot of these new ventures. For sure, the company that gets blockchain and cryptocurrency right will hit it big...but which outfit will that be? Its beyond my ability to tell.

The important point, though, is to separate the technological innovation of blockchain from crypto currency -- crypto currency is just one very limited use for blockchain. Data security as a whole is what will really be the winner out of blockchain, which is where much of the effort for the tech is actually going.