DiamondEcho wrote:I'd ultimately sue my broker, which itself is NASDAQ listed and has $10Bn of equity capital, is UK FCA and FSCS, US SEC and CFTC regulated and is a member of the SIPC compensation scheme. Who would you go to if your Fake-coins go phutt in the night?
Yes, this is my point. So the value of stocks and shares (for small investors such as ourselves at least), as compared to that of crypto, is down to contract law more than some "intrinsic" value. We can of course argue about whether an index or a synthetic ETF is abstract or not, but
in practice they are the same. In fact they may be becoming more so as the price of crypto starts to become affected by the prices of traditional investments, as we've seen recently I think.
As to fake-coins going phutt in the night, that's not a problem exclusive to crypto. There are many cases of people having their bank accounts emptied and not being reimbursed (in fact ask Greeks about that - their own government did it), share certificates being lost or other bureaucratic issues ending in no recourse. But they are hugely rare. On the crypto side that happens too, the most famous being the collapse of the MtGox exchange in 2014. After subsequent investigations by the (in this case Japanese) authorities, it now looks like creditors will be compensated though. The situation is not as black and white as you make out.
Don't get me wrong - I'm not trying to defend crypto. There are many reasons why it could be a bad idea to buy it, just as there are good reasons not to buy shares, gold or wine as investments. My point is that problems with crypto aren't really about "infrastructural" problems leading to things like "going phutt" any more than holding things with conventional brokers or banks is. What matters is the market and how that works - and I think the problem there is that understanding that is currently extremely hard because it's not all about fungible currencies, as I mentioned before.