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Crypto is just a collectible

Published on 36 Comments on Crypto is just a collectible

Bitcoin is crashing!

But don't get smug just yet. It might go up again! If you think of Bitcoin (and NFTs etc.) as collectibles or commodities, you'll understand things much better. They're valuable when they're popular and they lose value when they fall out of favor. Just like stamps or old masters or pork bellies. That's all crypto is.

36 thoughts on “Crypto is just a collectible”

    1. Doctor Jay

      The plan is much simpler:

      1. Buy a bunch of crypto cheap
      2. Convert the world to crypto
      3. Sell all your crypto at huge profits

    2. kkseattle

      Part of step 2 is: Waste an unconscionable amount of electricity to produce nothing of value.

      Seriously, anyone who trucks in Bitcoin (I don’t know if the other crypto currencies use the same scheme) is basically destroying the planet for no reason whatsoever.

      It’s disgusting. Where are environmentalists on this?

  2. antiscience

    wait, "pork bellies" ? I thought that's what bacon was made from ? Mmmm ... baaaacon. That's not a collectible: that's a *delicious* sinful treat!

    1. Steve_OH

      I bought a half pound of sliced pork belly the other day, thinking it was bacon. I tried frying some of it up, and I couldn't figure out why it looked and smelled so weird. Then I read the label.

  3. Ken Rhodes

    If I own a contract in pork bellies and the price goes way down, I have an option.

    I can make bacon and sell it or eat it. What can I do with cryptoes? (Is that how you spell the plural?)

  4. kahner

    I don't know that collectable is a great definition for at least 2 reasons.

    1) Beanie babies at least were physical objects you could play with or display or do whatever people did with beanie babies.
    2) Crypto, though a shitty currency, is still basically a currency. You can do money-like stuff with it like buy stuff (drugs and illegal guns) or launder funds. Illegal stuff, but also useful stuff.

      1. kahner

        pretty much the only actual use cases i can think of that aren't faster, easier and more secure with any major traditional currency in the regulated banking system. unless risky, destructive financial speculation is considered a use case.

    2. kkseattle

      Crypto is currency like German marks are currency. If you can persuade someone crypto has value, you’re golden. But there’s no reason whatsoever for crypto to have any value.

      Dollars are the same, of course, but they are far more widely accepted and therefore not as prone to drastic swings in value. (Plus, dollars are kind of what you have to use to pay taxes and hold bank deposits in in the largest economy on the planet.)

      Either something is a good currency because it isn’t prone to drastic swings in value, or it’s a potentially profitable speculative scheme to enrich people lucky enough to sell to a greater fool.

      But it can’t be both.

      2. dausuul

        >> Plus, dollars are kind of what you have to use to pay taxes and hold bank deposits in in the largest economy on the planet.

        This is the key difference right here. Dollars have value because the US government demands to be paid in them, which guarantees a baseline level of demand--the tax bill of every American citizen. The dollar will have real value as long as the US government exists and demands them.

        And if you know you're going to need dollars to pay your taxes, you might as well use them for other stuff too.

        1. KenSchulz

          Dollars have value because the US government demands to be paid in them, which guarantees a baseline level of demand--the tax bill of every American citizen

          That is what mainstream economics teaches. I’m sure Venezuelans can pay their taxes in bolivars, but it hasn’t done much to prop up the value of the currency.

      3. kaleberg

        German marks might be a good example. Are they still even currency? Maybe you can redeem them for real money at a bank, assuming the German government still allows this. I gather East German marks have been worthless for a while. It's not like the local shop is likely to accept any type of mark except as a curio.

  5. realrobmac

    I'm usually the first one to crack on crypto, but to be fair, the entire stock market is also crashing.

    Is this the end of the crypto bubble? Way to early to say.

  7. Altoid

    Any historical or contemporary comparison is hard since crypto has no corporeal existence, which means you can't swap it or do anything non-commercially useful with it like you can with $100 bills anywhere or could even with tulip bulbs back in the day (you could at least plant those, in extremis). You can't even use crypto in the outhouse, for crying out loud.

    I might liken it most to 19th century paper money from a bank you might or might not have heard of-- do you take it and at what discount, or do you refuse it-- crossed with speculative stock like, say, a share certificate in the South Sea Company. Speculative paper like that may give us the closest analogue to non-corporeal crypto.

    1. realrobmac

      The bank notes and south sea stock though could, in theory, have some real world value. There is no theory under which crypto has any more value that space dollars from that one South Park episode.

    2. kaleberg

      First you check your Bank Note Reporter. It's a paper money collector's pricing book now, but its original use was to check the reputation of banks issuing paper currency.

  8. Jasper_in_Boston

    I can more or less conceive of how most collectibles and commodities are desirable to own or collect in the first place. Pork can be eaten, after all. And who doesn’t want a piece of digital art that is certified as unique? And gold and diamonds are pretty to look at, and can be used to make beautiful jewelry, and also have various industrial uses. But what created the underlying demand for algorithmically-generated strings of blockchain something something? At least dollars can be used to pay off debts owed to the government, thereby preventing incarceration. That seems pretty useful at a fundamental level.

    Crypto currencies seem about as fundamentally valuable as pet rocks.

  9. duncancairncross

    Crypto is WORSE than that

    Two reasons
    One it can and is used for money laundering
    Two you actually use and lose useful power in "mining" the useless objects

    Its destroying actual value to create useless tokens

    1. aldoushickman

      This, exactly. There are numerous creaky old coal-fired power plants that are economically useless super-polluters whose owners are avoiding retiring them so that they can disconnect from the grid and power _onsite server farms that mine bitcoin_ instead. It's completely insane.

      1. Spadesofgrey

        But it's pollution is small in the game of emissions. I suspect reducing emissions is pretty likely as well due to the technological landscape change.

  10. iamr4man

    Crypto isn’t like collectibles because they are taxed differently:

    “The IRS views most collectibles, other than those held for sale by dealers, as capital assets. As a result, any gain on the sale of a collectible that you’ve had for more than one year generally is treated as a long-term capital gain.

    But while long-term capital gains on most types of assets are taxed at either 15% or 20% (or 0% for taxpayers in the 10% or 15% ordinary-income tax bracket), capital gains on collectibles are taxed at 28% (or your ordinary-income rate, if lower). As with other short-term capital gains, the tax rate when you sell a collectible that you’ve held for one year or less typically will be your ordinary-income tax rate.”
    https://www.hallkistler.com/do-you-know-the-tax-impact-of-your-collectibles/

  11. MontyTheClipArtMongoose

    At this Sobelmann's location by Marquette University, crypto still means sporidiosis & shitting your guts out, not a virtual currency shilled by Boston icons Matt Damon & Tom Brady, but they do know this: if America doesn't get behind untraceable grid-sapping means of exchange, China will win the next Cold War.

  13. chester

    I thought a labeled x axis was required for a useful graphic. I was clearly mistaken.
    But what in the world is the time frame of all those squiggles?

  15. Altoid

    Srsly, if I have crypto, what do I really have? Entries in a virtual ledger whose main difference from a bank's accounting system is that everybody else who has entries has the whole ledger? So it can behave like any speculative item out there, but doesn't really exist? And its value depends on the willingness of other people to speculate in it? Must be fogey status, but I'm liking realrobmac's space dollars better, frankly.

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