Why Crypto Assets Which Yurumazu Hates Are Worthless

Crypto-assets and natural resources, crypto-assets and works of art.

The other day, Emin Yurumazu and Yuzo Kano had a clash of opinions about crypto assets.

IEOはEquityといったけど、IEOのEがEquityとは言ってない。（日本語）

デジタル・ゴールドは、ゴールドのように資産価格が簡単に算定できないが、人々が信じているので価値がつくというメタファーと理解している。 https://t.co/T7JGDieip9

— 加納裕三@bitFlyer (@YuzoKano) November 14, 2022

[Translation]

IEO says Equity, but the E in IEO doesn't say Equity. (Japanese)

I understand digital gold as a metaphor that, unlike gold, the price of an asset cannot be easily calculated, but it has value because people believe in it. https://t.co/T7JG Dieip9

— Yuzo Kano @bitFlyer (@YuzoKano) November 14, 2022

In this article, I will explain why crypto assets no value has, referring to Emin Yurumazu's remarks.

I would like to state in advance that the following is not the opinion of Emin Yurumazu himself, but my own, influenced by his words.

How does it compare to practical resources such as gold, oil, and food?

First of all, whether it is gold, oil, or food, it has its own purpose of use.

Gold is beautiful to look at.

It has the property of rust resistance.

It has excellent electrical conductivity and can be used in the circuits of electronic devices.

Oil can also be used as fuel, and it is useful for making processed products such as vinyl and plastic.

Food is a constant need to keep us from the pain of hunger and is essential for our survival.

Cryptocurrencies, on the other hand, have no bloating of their own, no utility to conduct electricity, and no fuel to move or heat anything.

Value is born only when human beings believe that it has value.

How does it compare to paintings such as works of art?

When I say that gold is valuable because it is beautiful, some of you may have thought, "That's because people believe that gold is valuable."

It makes sense.

We express the standard of human value as values, but how about paintings as an easy-to-understand example?

Like cryptocurrency, it cannot be used to create anything, much less eat it.

The beauty of gold and the beauty of works of art such as paintings are values that each person has, so they probably think that crypto assets are the same.

So let me ask you a question.

If you were offered a Picasso painting for 10 yen[10cent], would you buy it or not?

A Picasso painting is one of the finest works of art worth more than 10 billion yen.

I think most people would answer that they would buy it for 10 yen.

What if we add a condition like this next?

You buy Picasso's paintings for 10 yen, but as a condition, you can't resell them to anyone or hold an exhibition to show them to anyone, and don't tell anyone what you bought.

In other words, would you buy a Picasso painting without being able to attract customers and collect money, or have the honor of owning a Picasso painting?

I won't buy.

Because I don't understand the charm of Picasso's painting so much.

Most people will not buy it.

Even if you add a fictitious good condition that it will never be robbed, it takes up space and I don't think you can enjoy looking at the picture all the time.

In most cases, if you can satisfy your curiosity at first sight at an art museum, that's fine.

Still, there are people who buy Picasso's paintings on this condition.

No, some people may buy it for 10 billion yen under this condition.

It's someone you don't have to show anyone or resell, so you want to keep it as your own.

That's the person who really likes Picasso's paintings and understands the charm of Picasso's paintings.

That is the value of a Picasso painting.

The first person who raised their hand asking if they would sell it for 10 yen was probably looking at Picasso's painting with a speculative eye.

"If I buy it for 10 yen and sell it for 10 billion yen, I will get almost 10 billion yen. It's a good deal!"

This is the logic that expresses the weakness of crypto assets as it is.

Do you think there are people who want crypto assets like Picasso's paintings without reselling them or showing them to anyone?

In other words, crypto assets have no value other than speculation.

Interestingly enough, the real value isn't about money.

They're priced to make you think they're worth it because they're worthless.

This is called rarity value.

Value is created because there is a limit.

Music, ideas, and things called intangible assets are the same.

So is the stock, which is the valuation price of the company.

Since the conditions were quite mean, let's bring the story back to reality.

How much do you pay for crypto assets?

How much of your wealth can you give to crypto assets instead of taking money from them?

The answer is the true value of crypto assets for you, according to your values.

People who thought that art and crypto assets were the same thing may represent the way investors should be in a sense, and I understand that feeling, but they have lost sight of what is really important.

Remember what you really like.

What are you really passionate about?

If it's all about money, it's time to get away from the market a little and go on a trip and reconsider what a rich life is through various scenery and encounters with locals.

How does it compare to currencies such as coins and banknotes?

If you come this far, you don't even need to explain the difference between currency and crypto assets.

However, I understand that those who have believed in the value of crypto assets will not be able to immediately return to their original sense of values.

Resources are what our lives depend on, or what we are willing to spend our lives on.

Can you find meaning in crypto assets other than speculative purposes to risk your life?

Currencies are exchanged not only for speculative purposes, but also as collateral for buying and selling resources that actually depend on our lives.

Some people may say, “You can buy things with crypto assets.”

Of course, I know that, but you can buy it with "regular money", right?

Where are the advantages of crypto assets?

Conversely, cryptocurrencies are at great risk of being lost due to external factors such as freezing, hacking, and fraudulent use.

It's safer to deposit it in a bank and pay with a credit card.

Where is the advantage of crypto assets?

Would you then improve the system and tighten regulations to increase security?

Then there is nothing better than major currencies such as the dollar and the yen.

Where is the advantage of crypto assets, whose selling point is the lack of regulation?

The last hope for those who support crypto assets is that “the future is expected, and the value will increase”.

However, it is nothing more than a trap created by us critics of crypto assets.

It is checkmate with "Things that exist only for speculative purposes have no real value".

Crypto assets themselves have no purpose of use and no rarity value.

Although there are safety issues, if they are regulated, they will lose their superiority.

If such a thing has value, that value is the bubble itself.

The land bubble had a minimum value of land.

It cannot be zero.

However, crypto assets are only bubbles.

An amateur painting that was still overpriced at Valve's time is worth more.

The value of the frame and the value of the drawing board as firewood.

Emin Yurumazu described cryptocurrencies as electron garbage.

I don't like to use extreme phrasing, but if even plastic bottles are recycled, it might not be an exaggeration to say that crypto assets is the garbage in garbage, the real garbage.

Are all crypto assets scams?

I think it would have been better to create a system that humbly contributes to the circulation of money, like electronic money or Rakuten points, but the people who founded cryptocurrencies are touting that the price will go up. If there is, I think that it can not be helped even if it is considered a fraud.

Just like the hypothesis that a Picasso painting won't sell even if it's just 10 yen, I've seen and heard from their behavior that most of the people who support crypto-assets will quickly give up if crypto-assets don't move in price. It's easy to understand when you're doing it, and you think it's a sad world.

Newspaper article by Emin Yurumazu

Unexpected future waiting for Bitcoin after FTX collapse: Nihon Keizai Shimbun (nikkei.com)