It doesn't pay dividends in ETH, it pays dividends in more kitties. Is that really a dividend?
If apple shares could only pay dividends in more apple shares instead of USD would they have any value?
> This is ethereum we are talking about. If the ether was bought 1 year ago today, it would have cost $1,557.1. Someone could have made a $1.5k investment 1 year ago which is now paying for itself weekly.
Ethereum at least has a purpose, cryptokitties do not seem to have one. Besides, you can't just say that the price of one crypto asset will go up because a different one has gone up in the past!
"On May 22, 2010, the yellow stamp was auctioned once again by David Feldman in Geneva, Switzerland. It sold "for at least the $2.3 million price [that] it set a record for in 1996"." https://en.wikipedia.org/wiki/Treskilling_Yellow
Apple shares are worth money because they entitle one to a share of ownership and voting rights in a company that engages in real wealth production, and would be worth lots even if they reinvested all their dividends like Amazon.
The same cannot be said of these kittens... that this obvious point even needs to be stated is just sad.
He's not suggesting the markets are imaginary, simply suggesting that there isn't a backing asset to stabilize them. Sure people buy counter-strike skins right now but there is very little reason to believe that the current version of counter-strike in which these skins exist will be popular in perpetuity. At some point people will move on from the game, maybe even to the next version of counter-strike... at which point those assets values will decrease significantly. Just like people moved on from beanie babies, and just like they'll move on from crypto kitties.
To suggest that these things are anything other that highly speculative is intellectually dishonest at best, gambling at worst.
I think the point is one can imagine someone believing their $117k cat breeding lots of kittens that they can manage to sell for ETH (and/or later exchanged to USD), netting them a profit after some time.
> Are they buying an option on the right to receive dividends at some indeterminate point in the distant future?
> Do they think they'll receive a fraction of the enterprise value when Google gets bought by a bigger company?
> Will Google get sold off piece by piece and they'll get a pro-rata share of the liquidation proceeds?
Yes, but also a bet on other people's demand for those things - its asset backed. Since they all are based on USD I think they're a little safer bet than a cat fad.
It doesn't pay dividends in ETH, it pays dividends in more kitties. Is that really a dividend?
If apple shares could only pay dividends in more apple shares instead of USD would they have any value?
> This is ethereum we are talking about. If the ether was bought 1 year ago today, it would have cost $1,557.1. Someone could have made a $1.5k investment 1 year ago which is now paying for itself weekly.
Ethereum at least has a purpose, cryptokitties do not seem to have one. Besides, you can't just say that the price of one crypto asset will go up because a different one has gone up in the past!