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Would you rather own all of Bitcoin (current market cap: $100B) or all of a company with $10B in annual operating income? If it's the former, why?

by pdog 9y ago

RasputinsBro 9y ago
I would rather own all of Bitcoin. I'd sell it tomorrow and make about $1bn in profit and move on with my life. EDIT: I'm editing this because people are missing the point. My point wasn't about how when 1 owner has absolute control BTC is worthless like this guy[1] seems to think or about the liquidity of BTC, like this guy[2] seems to think. My point was about the fact that the difference between BTC is that the only use it has is holding and hoping it moves up, whereas owning a company actually brings in earnings. [1] https://news.ycombinator.com/user?id=code-is-code https://news.ycombinator.com/user?id=code-is-code [2] https://news.ycombinator.com/user?id=jawilson2 https://news.ycombinator.com/user?id=jawilson2
- code-is-code 9y ago
  If you, a single person, owns all bitcoin, noone would buy a single satoshi from you.
  - RasputinsBro 9y ago
    Ok, I would own 1/4 of all bitcoin and make only $250m profit tomorrow. Happy? Do you miss the forest for the trees a lot, or only when you're on HN?
    - sp527 9y ago
      You seem to be someone who’s not aware of how thin the liquidity is in crypto markets.
      - michaelbuckbee 9y ago
        Thank you. Is there an economics term or ratio or something that encapsulates this? In my mind, it's conceptually similar to elastic/inelastic demand curves.
      - coryl 9y ago
        24 hour volume was $1.25 billion USD. Is that thin for a $250m dump?
    - jawilson2 9y ago
      That isn't how supply and demand and market liquidity works. This is why institutional traders have to break up buys or sells over many transactions. If you put up a huge block saying "I want to buy/sell $X million / Y million units of instrument Z" it is going to strongly drive the market away from your bid/ask. In a market like BTC, it might drive the price down 50% within minutes. In other words, who is going to be on the other side of your market? If you are selling 1000 BTC, and if the top bid price has a quantity of 0.1 BTC, you will blow through the first level, then the second, thrid, etc, through dozens of decreasing price levels, if you are doing market orders. You will take out the ENTIRE BUY SIDE OF THE MARKET, and the price of your last transaction will be thousands of dollars lower than the first price. If you are doing a limit order, then you provide the lowest price you are willing to go, so you might only be able to sell a few coins.
    - Cakez0r 9y ago
      You would probably have more success selling off 25% of goldman sachs than 25% of all bitcoin.
ringaroundthetx 9y ago
I would rather own all Bitcoin, and sell a tiny fraction to people that want to transact in it, letting the market determine the price of that tiny float and slowly dilute based on demand. I would also invest into $10B companies with the Bitcoin balance. This is what you do with illiquid float you control, in any asset class. Whats the real question?
chanfest22 9y ago
As more people own Bitcoin, the value of Bitcoin goes up as the value of the network increases. As the network becomes more mainstream, more people start questioning why there needs to be a centralized investment bank making $10B in annual operating income.
- patio11 9y ago
  Is there a particular line of business of Goldman Sachs that you believe is either vulnerable to people's opinions of it as non-competitive with Bitcoin or factually imperiled by the existence of Bitcoin a technology?
  - chanfest22 9y ago
    I don't have an investment banking background and I'm not a financial services expert, but it does seem services related to raising capital (e.g., underwriting securities, assisting with IPOs, etc.) may not be as valuable with alternative options such as raising financial capital through token sales.
- kasey_junk 9y ago
  What is it you think Investment Banks do?
  - chanfest22 9y ago
    As far as I can tell, investment banks offer a variety of financial services such as assisting with M&A, trading derivatives, underwriting securities, etc. What is unclear to me is how many of these financial services (e.g., assisting with stock transfer, IPOs, raising capital, etc.) will continue to thrive in the same way that they have been, mostly unchanged for the past several years, when they can be executed in cheaper, more efficient, decentralized marketplace. I'd love to expand my understand and be proven wrong though so I welcome feedback on this line of thinking.
    - kasey_junk 9y ago
deleted 9y ago
[deleted]
twohlix_ 9y ago
If a single entity owned all BTC produced it would be largely worthless. There would also be no speculative value in it as no one would have any horse in the race. The value of BTC is driven by the network of BTC and its ability to be used in transactions as well as a speculative instrument. Given that, If your question is altered to somehow own all of it while keeping its value, i'd rather the 100B easily liquidated assets over 10B revenue yoy.

Would you rather own all of Bitcoin (current market cap: $100B) or all of a company with $10B in annual operating income? If it's the former, why?

by pdog 9y ago

Would you rather own all of Bitcoin (current market cap: $100B) or all of a company with $10B in annual operating income? If it's the former, why?

RasputinsBro 9y ago

I would rather own all of Bitcoin. I'd sell it tomorrow and make about $1bn in profit and move on with my life. EDIT: I'm editing this because people are missing the point. My point wasn't about how when 1 owner has absolute control BTC is worthless like this guy[1] seems to think or about the liquidity of BTC, like this guy[2] seems to think. My point was about the fact that the difference between BTC is that the only use it has is holding and hoping it moves up, whereas owning a company actually brings in earnings. [1] https://news.ycombinator.com/user?id=code-is-code https://news.ycombinator.com/user?id=code-is-code [2] https://news.ycombinator.com/user?id=jawilson2 https://news.ycombinator.com/user?id=jawilson2

code-is-code 9y ago
If you, a single person, owns all bitcoin, noone would buy a single satoshi from you.
- RasputinsBro 9y ago
  Ok, I would own 1/4 of all bitcoin and make only $250m profit tomorrow. Happy? Do you miss the forest for the trees a lot, or only when you're on HN?
  - sp527 9y ago
    You seem to be someone who’s not aware of how thin the liquidity is in crypto markets.
    - michaelbuckbee 9y ago
      Thank you. Is there an economics term or ratio or something that encapsulates this? In my mind, it's conceptually similar to elastic/inelastic demand curves.
    - coryl 9y ago
      24 hour volume was $1.25 billion USD. Is that thin for a $250m dump?
  - jawilson2 9y ago
    That isn't how supply and demand and market liquidity works. This is why institutional traders have to break up buys or sells over many transactions. If you put up a huge block saying "I want to buy/sell $X million / Y million units of instrument Z" it is going to strongly drive the market away from your bid/ask. In a market like BTC, it might drive the price down 50% within minutes. In other words, who is going to be on the other side of your market? If you are selling 1000 BTC, and if the top bid price has a quantity of 0.1 BTC, you will blow through the first level, then the second, thrid, etc, through dozens of decreasing price levels, if you are doing market orders. You will take out the ENTIRE BUY SIDE OF THE MARKET, and the price of your last transaction will be thousands of dollars lower than the first price. If you are doing a limit order, then you provide the lowest price you are willing to go, so you might only be able to sell a few coins.
  - Cakez0r 9y ago
    You would probably have more success selling off 25% of goldman sachs than 25% of all bitcoin.

ringaroundthetx 9y ago

I would rather own all Bitcoin, and sell a tiny fraction to people that want to transact in it, letting the market determine the price of that tiny float and slowly dilute based on demand. I would also invest into $10B companies with the Bitcoin balance. This is what you do with illiquid float you control, in any asset class. Whats the real question?

chanfest22 9y ago

As more people own Bitcoin, the value of Bitcoin goes up as the value of the network increases. As the network becomes more mainstream, more people start questioning why there needs to be a centralized investment bank making $10B in annual operating income.

patio11 9y ago
Is there a particular line of business of Goldman Sachs that you believe is either vulnerable to people's opinions of it as non-competitive with Bitcoin or factually imperiled by the existence of Bitcoin a technology?
- chanfest22 9y ago
  I don't have an investment banking background and I'm not a financial services expert, but it does seem services related to raising capital (e.g., underwriting securities, assisting with IPOs, etc.) may not be as valuable with alternative options such as raising financial capital through token sales.
kasey_junk 9y ago
What is it you think Investment Banks do?
- chanfest22 9y ago
  As far as I can tell, investment banks offer a variety of financial services such as assisting with M&A, trading derivatives, underwriting securities, etc. What is unclear to me is how many of these financial services (e.g., assisting with stock transfer, IPOs, raising capital, etc.) will continue to thrive in the same way that they have been, mostly unchanged for the past several years, when they can be executed in cheaper, more efficient, decentralized marketplace. I'd love to expand my understand and be proven wrong though so I welcome feedback on this line of thinking.
  - kasey_junk 9y ago

deleted 9y ago

[deleted]

twohlix_ 9y ago

If a single entity owned all BTC produced it would be largely worthless. There would also be no speculative value in it as no one would have any horse in the race. The value of BTC is driven by the network of BTC and its ability to be used in transactions as well as a speculative instrument. Given that, If your question is altered to somehow own all of it while keeping its value, i'd rather the 100B easily liquidated assets over 10B revenue yoy.