Originally Posted by
mflat
I don't disagree with you from the airline's standpoint at all. All I'm saying is that eventually all value will end up being virtual, and by that very nature, all value will be freely exchangeable and transferable. Anything that does not make that migration will be deemed worthless. Clearly, this is a threat to centralized loyalty programs that can freely devalue a point/redemption value at their leisure, but the whole threat of cryptocurrency is that even sovereign governments/bodies no longer have the power to devalue fiat on a whim. From a market cap importance perspective, loyalty programs are further down the list of what has widespread impact, but it's still a vision of the future worth thinking about.
I've never seen an airline devalue as much as quickly as Bitcoin sank from its highs a month or so ago. So there is big devaluation possible in the cryptocurrenices market also, it's just that the cryptocurrencies devaluations are due to market forces (which are not at all easier to predict that what an airline will do!), as opposed to someone making a decision to devalue a currency they have complete control over (ie, one which is not traded on an open market at all0.
So while the typical airline miles have close to zero chance of steadily accumulating in value like the S&P 500 does (based on history), they also tend to devaluate at gradual pace, while unstable currencies can "crash" in a way that typical airline miles rarely do (unless the airline goes out of business with no buyers). Of course, as with all investments, if you can diversify, that's safer. (In the case of airline programs, diversification -- especially across multiple alliances -- may also make it easier to find availability more often, compared to only holding one airline's miles.)