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Comment by seibelj | Hacker News Reader

I find a lot of DeFi projects to be very useful, but you have a logical fallacy -

If I buy 1% of Apple stock at $100, and later it's worth $1000 based on the last trading price, money didn't change hands to make me have more USD, it's my paper wealth.

If Bitcoin goes from $1 to $50k, and I never sell, I didn't take any money - the wealth simply grew.

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The point is that holding Apple stock is a claim of ownership of the assets of Apple as well as the future income of Apple, either in the form of dividends or stock buybacks.

The activity of Apple is economically meaningful; and the price of Apple stock reflects that.

Why are you comparing a currency with a stock? What is the claim of ownership for USD for example?

The ability to pay taxes.

The activity on Ethereum is economically meaningful, whether you believe it is or not. And let's be honest, Netflix or Facebook could disappear off the face of the earth tomorrow and productivity would arguably increase, so is that a negative sum game?

The activity on Ethereum has the potential to be economically meaningful (there's a separate discussion on whether or not it's the best way to do it) but I don't think it currently is.

What is people extracting from the Ethereum ecosystem that isn't USD?

OK but I'm responding to a claim about BTC.

Applying this argument to the US dollar when it was gaining value relative to many other currencies before the current inflationary spat is illustrative. Probably all of us held USD during that time, but that act in itself wasn't productive. The increase in value came from the underlying institution of the US Treasury being perceived as more trustworthy than other similar international institutions. The distinction to make is between the minor deflation of USD and the absolutely massive deflation of BTC over the same time period. I think everyone would agree there is some value to a decentralized proof of work transaction ledger, but $50k USD is clearly the result of some mania (rational or otherwise). That "some value" should therefore be reflected in a positive price, even if that number is orders of magnitude less than the current astronomical price.

If you hold something with that much volatility it's not a currency.

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