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There's also some really dark patterns with BitClout like the founder being anonymous and virtually no information on the company. Also heavily pre-mined coin and no market to get your money out. The prices and value are all very opaque

> So what would happen if you made your own "stock market"...

Let's say someone like Elon Musk wanted to launch a personal IPO. He raises $1B for a share of his personal wealth. There's instantly a value floor, because if his total market valuation becomes less than the amount he raised he can always buy back his own stock and he gets a bargain on the money raised.

E.g. if the IPO price was $1 per share, and now the market is $0.90 per share, he effectively gets a 10% discount on money he originally raised back at the IPO -- hence the value floor.

Bitclout is nothing but a popularity contest with the participants hoping a greater fool will buy in after they do.

Good points. This seems to be the case for the vast majority of ERC/BEP-20 tokens, as well, for example, and for plenty of other sorts of things.

I don't know how I feel about them. Actually, I do know how I feel about them: instinctive distaste and sometimes revulsion. But that's just an emotion. What do I think about them? Is it all just a microcosm of finance in general? Is pointless zero-sum gambling really so bad, given it induces a sense of excitement and entertainment, if nothing else? I'm not quite sure, at the moment.

I feel about the same, regarding ERC tokens and also most "real" financial derivative instruments; and the revulsion comes not from an aversion to gambling per se, but from the sheer size of the market for it and its distance from the tangible world. I know that some of those instruments produce value beyond their returns, by facilitating the management of risk and so forth, but the scale seems out of whack - akin to a town of 100 people, comprised of 10 farmers and 90 guys devoted to finding exotic new ways to speculate on this year's harvest.

> So what would happen if you made your own "stock market" app, where people could speculate on "shares" of stock that don't include any actual ownership?

You'd get shut down by the SEC for running a "bucket shop".

https://en.wikipedia.org/wiki/Bucket_shop_(stock_market)

the notion of ownership in stock ownership is tenuous at best though: https://www.johnkay.com/2015/11/11/is-it-meaningful-to-talk-....

> These days it seems like investors don't really care about the ownership conferred by stock. I mean, they do for a small startup or LLC, but for blue chip stocks with no dividend, the "ownership" part is kind of vestigial; they're just vehicles for speculation.

This is exactly the kind of thing you read before a bubble pops.

> I could write a webapp that simulates the stock market, declare that it contains X "shares" of Apple at Y price, and people could speculate on them, much as they do in the real stock market, all without Apple knowing or caring.

This already exists. It's called a CFD (Contract For Difference)

That's very different from what I'm describing. CFDs are financial instruments pegged to (real) stock market prices; I'm describing a market that, like Bitclout, is entirely divorced from any objective measure.

Entirely divorced from any objective measure + unregulated by the government = what's stopping the webapp owner from just setting the price and fleecing you? Scout's honor?

This is a hypothetical; my post (charitably) presumes the market is safe in order to discuss other problems with it, but it could certainly be implemented in a way that allows the author to fleece the investors, which I gather is one of the complaints about Bitclout as well.

That's what SpotOption, based in a suburb of Tel Aviv, offered. They powered multiple scams, all bucket shops. Originally they pushed "binary options", but branched out into "contracts for difference" and "forex". [1][2]

[1] https://fintelegram.com/chasing-scam-facilitators-the-united...

[2] https://www.timesofisrael.com/topic/spotoption/

I think this is pretty much what FTX.com is doing? It's trading derivative contracts on stocks; so if I understand correctly you can trade stocks (or even not-public companies) without the actual stock ownership.

Derivatives typically have mechanisms that forces them to stay pegged to the underlying asset. So it's not quite the same, even if you don't own the underlying asset. For example, perpetual futures (like those on FTX) have funding rates that vary based on price difference of the future vs underlying.

That's what an option is on the stock market. It's not so much trading stock, as it is making a bet on whether the stock goes up or down by a certain date.

You don't have to exercise the contract, you can just sell it to someone else.

> Think of a share of AAPL, for a moment, as being the combination of two things: the ownership of a tiny sliver of Apple, and a bet that Apple will increase in size.

That's not accurate though. It's a bet that the expectation of future dividends from the stock will rise. Popular stocks these days don't really do dividends, but that's because they can better spend the money to grow rather than pay out.

But there's still the general sense it might happen eventually and that's why it somewhat makes sense to give these companies high valuations. A fake share has a guaranteed lifetime dividend of $0.

This is complete nonsense. For example, Berkshire Hathaway plans to probably not issue dividends.

https://www.investopedia.com/ask/answers/021615/why-doesnt-b....

> In particular, Buffett prefers to reinvest profits in the companies he controls in order to improve their efficiency, expand their reach, create new products and services, and improve existing ones.

> In one of his famous letters to shareholders, Buffett said that perhaps Berkshire Hathaway might institute a dividend 10 or 20 years down the road. This was in 2018 when Buffett was 88.

This article just reiterates exactly what I said. Berkshire can do better than just giving money back to shareholder by investing the money in itself. The reason shareholders are ok with this is because the growth fuels the potential for larger future dividends. Even if the company grows until the heat death of the universe, the logic behind increasing the valuation of the company is that the ability of a company to give dividends has theoretically increased. You don't need to bet on actually receiving them. But the stock has value because if the company stops growing, the company will pay out instead.

If it were all about size, then a shrinking company would have negative value. This is obviously incorrect.