NickGiambruno on Nostr: Once people realize altcoins are not good money, they often fall back on the claim ...

Once people realize altcoins are not good money, they often fall back on the claim that they are like equity or investing in tech start-ups.

When you invest in the equity of a start-up, you have an ownership stake. It’s a legal claim to the assets of the business and its future cash flows.

However, altcoins do not represent any ownership stake or legal claim on any asset or cash flow whatsoever. That’s why they are nothing like equity, despite what many believe.

It would be similar to mistaking Chuck E. Cheese arcade tokens or airline frequent flyer miles for an ownership stake in the underlying airline or arcade business.

But suppose altcoins did represent an ownership stake or a claim on an asset. They would then undoubtedly be “securities,” which means their developers must register with the government.

Practically no altcoins have registered as a securities, yet most of them probably are indeed securities—even though they offer no legal claim to ownership.

Given their statements, it’s clear that the SEC views altcoins as unregistered securities.

That’s because altcoins have issuers.

By contrast, the SEC and the rest of the US government have been clear that it views Bitcoin—and only Bitcoin—as a commodity, a much more favorable designation.

That’s because Bitcoin does not have an issuer.

It brings up another relevant point. Most altcoins would cease to exist if the SEC went after them, which illustrates that, despite the marketing claims and technobabble, altcoins are not decentralized.

Here’s the bottom line…

When you buy altcoins you get the worst of both worlds.

You get the regulatory and legal risk of owning an unregistered security without any ownership stake in assets or future income.

Altcoins are nothing like equity.

https://financialunderground.com/articles/the-case-against-altcoins-3-reasons-why-you-should-stick-to-bitcoin-only/