> That BTC I own represents an immutable thing that itself does nothing.
Part of BTC's value is probably the hope (speculation) that it will one day be used as an alternative payment system / store of value / whatever, and that will cause it to maintain value. As of right now, a share of AMZN itself does virtually nothing either. Its value lies in the hope (speculation) that one day Amazon will pay us money for holding it.
Mining is productive. It supports the payment system. BTC does not. If we took 90% of all coins, shoved them in a wallet, and destroyed the key it wouldn't change the network's capabilities at supporting payments or storing value or whatever. That's the difference between a productive asset and something else.
An AMZN share on the other hand represents some small percentage of actual labor and production being done by Amazon's employees.
> An AMZN share on the other hand represents some small percentage of actual labor and production being done by Amazon's employees.
Which is nice on paper but is functionally worthless for virtually all shareholders unless AMZN pays a dividend, no? The only way to generate wealth from AMZN right now is to give it to someone else for more money than you paid for it. If you bought AMZN 20 years ago for retirement, you'd still be waiting for that asset to produce anything on its own. For fun, compare that to the East India companies which paid up to double digit dividends from year one.
To be fair, AMZN is one of the more promising examples of these tech growth stocks, but many of them seem to be trading in a way similar to BTC: pure speculation on an asset which currently does not produce anything on its own -- and has no guarantee that it ever will.
>Which is nice on paper but is functionally worthless for virtually all shareholders unless AMZN pays a dividend, no? The only way to generate wealth from AMZN right now is to give it to someone else for more money than you paid for it. If you bought AMZN 20 years ago for retirement, you'd still be waiting for that asset to produce anything on its own. For fun, compare that to the East India companies which paid up to double digit dividends from year one.
Of course when an investor buys single stocks he is taking on the risk that the company has to survive until it pays out dividends or does stock buybacks. However, literally everyone knows and understands that risk. Everyone has heard about companies going bankrupt. This is why you are supposed to have a portfolio of a variety of stocks. Employees who receive stock compensation want to avoid the risk that their employer will disappear and they lose their job and the stocks both at the same time.
But if we assume that Amazon is not paying out dividends right now because it is still growing (I don't know, haven't checked since I consider Amazon to be an awful company) then it would grow its ability to pay out dividends in the future. There will be one day in the future that Amazon will stop growing and then be forced to just pay out the profits. If it turns out that the margins at the end are super thin and it can't pay enough dividends to justify its market cap then the value of the stock will simply go down because investors sell their stock and look for companies with growth potential. This will happen until the value of the stock is low enough that the valuation of the company is entirely based on dividends.
>pure speculation on an asset which currently does not produce anything on its own -- and has no guarantee that it ever will.
This is an undesirable property of the stock market, at least if you were to ask the central bank or government or me. With Bitcoin, this is actually considered desirable because there is nothing to it other than speculation.
Part of BTC's value is probably the hope (speculation) that it will one day be used as an alternative payment system / store of value / whatever, and that will cause it to maintain value. As of right now, a share of AMZN itself does virtually nothing either. Its value lies in the hope (speculation) that one day Amazon will pay us money for holding it.