Bitcoin Forum

Why do people continue to act as if an Altcoin is akin to buying stock in a company? The future of blockchain tech is extremely bright and will in all likelihood revolutionize many different industries. However, 99% of the Altcoins have no utility and will never have a utility. Yet, people hype, and buy some of these coins to the point they have a market cap in the hundreds of millions, if not billions.

It's appears to me that people are treating Altcoins like stock? Despite how promising a blockchain's premise is, the Altcoin associate with that specific blockchain, does not give someone ownership or right to dividends. The Altcoin has no intent on utility and has simply been used to raise funds like an IPO.

For example Ripple, 3rd largest crypto with a market cap of $19b. Ripple is a great idea and a perfect example of how Blockhain can revolutionize an industry. Many big name banks around the world have signed up to use Ripple's blockchain, which has clearly helped propel XRP to such a huge market cap. Except Ripple's blockchain doesn't require the banks to use XRP and they can simply use Fiat currencies. Furthermore, the banks have said they have no interests in using XRP. The fact Ripples blockchain can facilitate fiat currency, pretty much renders XRP useless.https://www.bloomberg.com/news/articles/2018-01-25/ripple-wants-xrp-to-be-bitcoin-for-banks-if-only-the-banks-wanted-it (https://www.bloomberg.com/news/articles/2018-01-25/ripple-wants-xrp-to-be-bitcoin-for-banks-if-only-the-banks-wanted-it)

Owning XRP does not mean you own a piece of Ripple and the huge potential of their blockchain. XRP doesn't to mean you will receive a dividend, but people have bought XRP and pushed is valuation to an astronomical value like it is stock in Ripple. I just don't get it.

I don't mean to pick on XRP, but it's value makes it an easy target. Almost every other Altcoin appears to have an even less promising future then XRP when it comes to their utility.

Perhaps I'm missing something though......

You are missing a lot.  I think you need to read up on what coins are actually out there.  There are some that have no utility but you are plain wrong in stating that the number is 99%.  Most people that are investing in altcoins are hoping that the price will rise.  No one is doing it for the dividends.  Maybe for the staking, but not the dividends.

You're right as far as ripple goes but it can't be said for every coin. I think that the evaluations for a lot of coins are ''irrationally exhuberant'' maybe thats why we're having this monstrous crash.

You are totally right. People are playing the cryptos like stocks/gold/fiat money.
They think that the coin/token have a real use and value. A lot of people/companies are scamming people like this.
I think most people already knew this. But they only think about getting rich and fast.
As there was everyday a news about the value of Bitcoin on last year.
That's why every coins are overevalute now. And i don't think the market will change. It will always be like this.
Only greed to try to steal money from other people drive the market.
We are also in the same pot. (If you also invest in some cryptos)

You are partially right. There is a lot of the projects out there which have absolutely no use whatsoever. But in my opinion that number is closer to 80% than 99%. All of them will fail miserably and the strongest projects among remaining 20% will prevail. That is normal in any new/young market.

My main indicator whether to invest in new project is possibility of real world usage. If it has it's use and on top of that there is solid team behind it I will consider investing.

I will not go into Ripple discussion here because it was just used as example an is not that relevant to theme of this topic.

There are so many diverse cryptos, you have currencies, utility tokens, etc.  Its hard to fit most cryptos into just one category.

Sorry, have to disagree here. I own two alt tokens for dividends. Which I have already been paid out for in one, and awaiting the other. OP is correct in saying that we shouldn't see them as stocks. These dividend tokens CAN BE compared to stocks, in that they represent some form of dividend distribution. But not company ownership or voting rights (but some alt projects have this actually).

You should look up coins that have already paid out dividends or some form of profit sharing.

I agree with you, people do not know what they doing. This is caused by people which heard that here is easy profit. Most of them are without any knowledge, but we can not do anything in this situacion

Coins are quite different from stocks and commodities! Just that in trading there have some similarities and because of these similarities people tend to see them as the same. Coins are Internet money and cryptocurrencies is the future of the the world financial system. Stock markets are building there onw coin  on blockchain technology and that is like moving the world financial ssystem into blockchain technology.

They are not stock but bitcoin is not a company, so it cannot be an stock but other tokens are also not stock but companies issue them have internal share structure similar to normal companies.

Only those that are not educated enough would comapre token and Stock as having thesame value, but there can be some comparision, the buy back and burning are two decision taking that one can make, also some project goes as far as paying dividends for token holders a good example is Taas team.

@Mobstar99. Yes but to use Ripple you have to have a minimum amount required of XRP in your wallet to activate it and all fees in Ripple are paid in XRP. It would be impossible for a bank not to use XRP if they want to use Ripple.

Also, I know the developers could have designed it not to have a token, but they way it was designed requires XRP. So saying that there is no need for XRP to use Ripple is wrong.

I am not defending them but you should have the facts right.

99% percent may be a bit of an exaggeration, but I think most would be hard pressed to argue against the fact a large majority have no utility or even intent on utility . So, why should the price ever rise for an Altcoin that has no utility? It shouldn't as far as I'm concerned. Hence, why it looks like to me that people are treating altcoins like stock.

Obviously speculation is the reason any coin with no utility would rise, but I can't understand how widespread speculation is in crypto....it baffles me, which is why I created the post in the first place. I haven't read every white paper, but the rampant speculation made me think I was missing something.

I wasn't aware there were coins that pay dividends. You sound like a smarter investor then most. Care to share what those coins are? I'd be interested to know what there market cap is. I'm guessing there will be several tokens with no dividend or utility that are worth significantly more. Which makes no sense to me.

I'd love to know some of the coins you think fall into that 20% realm? You're investing strategy is pretty similar to the way I look at things. I'm having a hard to finding coins that fall into the "potential real world usage and great team" categories though.

I'm not comparing them to stock. The wild valuations a lot of useless coins have, leads me to believe a lot of investor are treating them like stock.

ripple is good and has been partnered by many big companies in the financial sector and banks, but until now I have not seen any real development. if there is no growth in the ripple in the next few years, I can say that the partnership has not been successful.

I think all this will pass. It is difficult to take Altcoin when this coin is not introduced in your country. In many countries even banned. I think it's a matter of time.

some people play altcoins like stock, another people like alcoin because they think related project or tech are prospective. There are always different buyers in the market, it’s not big deal. What’s your point? The market would not be such profitable, if there were not people who’s buying altcoin like stock.

I also really like ripple,this is the reason why i love ripple,
Ripple is already a Coin of Choice for Business.

Hedge funds, banks and American Express have signed all as important supporters in the future of XRP and Ripple technologies. Ripple has created something that just a few other cryptoes have made it to this point: the currency that pre-existing businesses not only want to use, but will benefit from doing so .. Amazon is likely one of the big customers to take this step in 2018 Trading giants like Everything Store desperately need a coin that offers fast transaction time without the cost of paralyzing the current Bitcoin network. Ripple offers a solution to the problem, while also presenting coins supported by financial institutions. Although it is difficult to say what direction Amazon will take in relation to cryptocurrency, Ripple seems to be the most logical choice at the moment and continues.

Neither are normal currencies (forex) and everyone trades them like stocks. Buying a currency gives you ownership over that currency just like buying euros to exchange them for dollars later on. It's really the same concept.

I agree with that cryptocurrencies and altcoins aren't stock but it is treated like trading or investing forex currencies the only difference is that the cryptocurrencies are volatile and hard to predict the market unlike forex we can predict the market through economic standing and news about the country who owns that currency like USD for USA. In cryptocurrency we can't predict the market as it is decentralized and nobody owns it. Speaking of utility and dividends there are other tokens from  ICOs has implemented this concept, Cappasity is one of them.

It is true because since created Altcoin created like a stock or gold but has a volatile value the same thing with bitcoin, which is now being a crowd so the topic of conversation in the internet universe.

You are right. It is hard to explain to someone what cryptocurrencies are so I would just make stock as an example. I would state that cryptocurrencies are just stocks wherein you would be able to buy and sell them and they can be use to pay for goods and services too that's why they are better than stocks. I am not saying that when they bought a coin, they would be part owners of the company but they would just be owning one of their assets. It is more of the concept rather than what the actual use of stock is. You can either buy and sell cryptocurrencies, fiat currencies or stocks because all of them have the same concept when it comes to trading.

I agree.
People have little interest in crypto, blockchain or specific project. This is purely speculative interest. Many people just see huge growth and want to buy to participate in this holiday.

I disagree, if altcoin is considered the same as bitcoin, because the bitcoin more special when compared with other altcoin, because the amount of supply is limited. and I would agree if bitcoin is considered gold, whose price can go up and down, according to market demand

This post is somewhat true but its hard to deny the fact there is utility facor in some coins as well. For example some coins like Taas basically represent participation in funds and it pays dividends. So utility tokens are thing but not very popular..

Maybe what you really mean is ICO Token, and it is not exactly the same as Stock, but the volatility are similar when projects/company has great development and promising future their Token will has high price.

And about the utility, it is true that many Token has no real utility. But you are saying that many of these token has billion marketcap, that is wrong. If token has huge marketcap, it means the it is/will be useful in it's platform.

It's because some coins are only marketed through ICOs rather than being open source and allowing people to simply mine them if they want. ICOs behave like stocks because the distribution of the coins is controlled by the developers.

That's why the SEC made a distinction between ICOs (which they felt were scams) and cryptocurrencies which are open source and anyone can mine.

There are tons of alt coins with utility. OCN has been integrated into oBike giving 40m users a chance to use crypto and the ecosystem along with it. Many of these alt coins don't have utility, look at all the privacy coins especially... However, many coins are also based on speculation and people speculate that some of these coins will have tons of utility in the future. Like ADA, it's an excellent project, but doesn't have a product yet.

Not a ton, though. Page 200+ of cmc is full of absolute shit coins, even page 1 is filled with non sense coins that have less than 1m in volume and are literal copies of other coins or straight up forks. Like litecoin, which is a very famous alt coin but it's really nothing, it's just a copy of bitcoin, it really offers nothing else. Most coins are still pretty garbage, give it a few more years before real companies jump in.

You are right, majority of cryptocurrency investors are missing the point, and they blindly follow others' investment choices hoping they will make big returns. Although these investors are wrong about the nature of cryptocurrency market, they still can (and probably will) make money of it. In the short term you don't have to be right about the market, you just need a few more investors to join later than you did.

You don`t need to have access to dividends or any equity right to get profits in the stock markets as well. Many growing companies do not distribute any dividends until they get some level of maturity.

Coins are pretty the same - what makes the price increase is the classic offer vs demand, when the supply is low and controled, and the project is strong and delivering promises, price may go upper in normal circunstancies.

The short answer...

Crypto is not stock BUT, stock is the closest we can compare it to right now.  Many might not see it but crypto is evolving... I would even say it changed so much that calling it cryptoCURRENCY might be considered a misnomer soon.

While I agree on most of your points, don't forget that most of the top coins, started near the bottom of the list.

Actually, the best opportunities (highest return) may be among those at the bottom of the list...but yeah, you need to learn how to carefully navigate and avoid the countless "shit" down there.  ;)

Yeah but we were talking about utility not how much money you can make with shit coins. In the bull run, everything had high returns, you don't have to be a genius to make money in a bull market, sure shit coins had big spikes but look where they are now, virtually dead. If you are talking purely about trading and speculation, you can surely use any coin but for a real long term investment, only a few coins will be worth it and I'm talking about 15-20, max right now.

Only few people who get in crypto space with an idealist purpose, they want to change something by acquiring altcoins , they believe the project would make things better , cool and useful but mostly come with full of speculation , greed and uncertainty just like gambling.
There's also a lot of shitcoins taking advantage on this situation , create - pump and walk away with millions dollar in their pocket.
Cryptocurrency offers a lot of better thing than stocks , that's why people start switching to crypto , make it wanted and valuable.

An extensive and instructional topic and through this post we can learn many lessons. In the first analysis, it is normal for sympathizers and investors to consider altcoins as actions because the crypto is a new financial system and descends from the market archaic of actions, with new instructions of data and graphs. In general we should not to attach to a system, opinions or moments of the market, but to seek flexibility in our attitudes towards the market. So we can also consider money as relative and everything depends on our point of view.

I think you missed my point.  Even the best coin will start near the bottom.  It may be cheap still but is gold or diamond...not shit.

The big problem is what those stock/tokens promisses. I get frequentily the Bunny Token add on youtube and they are promissing 1% of value per day!

That's not a promisse that can be made and does not matter how your system will provide it, it is no 'promissible' such a thing.

Tokens being treat like stock is not the problem, the problem is that the market usually does not matter if the token can fulfill the promisses... and that lead us to all the shitcoins and pll saying: Omg, did you know about the StongHands, the next bitcoin?

It is sad

Off course it is not. If some company offer the dividen they will actually get caugh by SEC. Utility token will be used on its platform only but the good thing is, if the platform can scale and people arround the world using their platform they need utility token and utility token can not be issued again. Look at genesis vision. What makes it goes up hard ? Because people trust to use their platform which only can be used with gvt.

You are wrong in that people look at the crypto currency as an investment in stocks. This is a fast dynamic technology, then any delay to level suicide. A stock is like investing in gold or real estate, there is much less risk. Regarding the ripple, this is really the coin that has long been to collapse and withdraw it from the market, I do not understand why it is still being invested in it.

And I think you missed mine, the only reason all these coins grew so much was due to the bull run and dumb money that was coming in last year. Yes, it's true that any coin will start at the bottom but figuring out which one will truly succeed is extremely hard, most people here think they have everything figured it out because they did some ''research'' aka reading a bit about their team and some reddit posts. It's not that easy.