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Linux Inventor Says He Doesn’t Believe in Crypto (u.today)

submitted 6 months ago by AnActOfCreation@programming.dev to c/technology@lemmy.world

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Linus Torvalds, creator of Linux, does not believe in cryptocurrencies, calling them a vehicle for scams and a Ponzi scheme.
Torvalds was once rumored to be Bitcoin creator Satoshi Nakamoto, but he clarified it was a joke and denied owning a Bitcoin fortune.
Torvalds also dismissed the idea of technological singularity as a bedtime story for children, saying continuous exponential growth does not make sense.

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[–] Rivalarrival@lemmy.today 0 points 6 months ago* (last edited 6 months ago) (1 children)

Except, you know, the stock being tied to ownership in a company that sells real goods or services.

That's the scam: without dividends, or at least the reasonable prospect of dividends, it is not tied to the company in any tangible way. Shareholders benefit only from speculation by other investors, and not from actual business operations.

[–] AliasAKA@lemmy.world -1 points 6 months ago (1 children)

Almost. If you own a share of a company, you own a share of something fungible, namely literal company property or IP. Even if the company went bankrupt, you own a sliver of their real product (real estate, computers, patented processes). So while you may be speculating on the wealth associated with the company, it is not a scam in the sense that it isn’t a non fungible entity. The sole value of crypto currency is in its speculative value, it is not tied in theory or in practice to something of perceptibly equal realized value. A dividend is just giving you return on profit made from realized assets (aforementioned real estate or other company property or processes), but the stock itself is intrinsically tied to the literal ownership of those profit generating assets.

[–] Rivalarrival@lemmy.today 1 points 6 months ago* (last edited 6 months ago)

Everything you just said is only true for stocks that pay dividends now, or may pay dividends in the future.

It is not true for companies with zero intention of ever paying dividends.

Even if the company went bankrupt, you own a sliver of their real product

Historically, when that happens, the creditors walk away with the assets. The shareholders get nothing.

but the stock itself is intrinsically tied to the literal ownership of those profit generating assets.

That's the scam. It's not. In practice, the sole value of a zero-dividend stock is the speculative value.

it is not tied in theory or in practice to something of perceptibly equal realized value.

Electricity has value. Crypto value is intrinsically tied to mining costs. Even if you have access to a free source of power like your own solar panels, you have to weigh the cost effectiveness of mining against the revenue from using your panels to backfeed the grid, selling power back to the power companies.

Because crypto is tied to something of utilitarian value, and zero-dividend stocks are tied only to the whims of investors, the stocks are actually a significantly greater scam than the crypto.