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Is it? That doesn't sound correct. Bitcoin didn't exist a decade ago. The amount of wealth it added can be measured directly. But perhaps I'm not thinking of
by sillysaurus3 9y ago
Is it?
That doesn't sound correct. Bitcoin didn't exist a decade ago. The amount of wealth it added can be measured directly.
But perhaps I'm not thinking of it in the right way.
- umanwizard 9y agoAssuming Bitcoin is totally worthless in the long run (which I strongly believe it is), the right way to think of it is that people who own it have lost however much they paid for it. When you think of it that way, all the sums add up to zero.
- sillysaurus3 9y agoSuppose Bitcoin ends up worth a dollar. Since there will be 22 million BTC, it seems true to say that it added at least as much wealth to the world as a failed (acqui-hired) startup. Therefore it wasn't zero sum, correct? It's not like we're doing anything else with our time, so we may as well have a thought experiment.
- wolco 9y agothe fiat currency required to fullfill the 22 million coins being cashed out would be removed from other areas of society
- sillysaurus3 9y agoWhy is that different from a startup being acquired for $22M? In both cases, people now have $22M to spend that they otherwise wouldn't have had.
- rspeer 9y agoStartups are bought because the buying company plans to use them in a profitable enterprise. What would you do with post-crash Bitcoins that you paid a dollar for?
- abakker 9y agoI suppose if you wanted to be really economic about it, you might say that the wealth created is equal to the sums of the wealth foregone in everyone else’s opportunity costs. But, really, that is stilly. Nobody does that kind of accounting. I think what the OP meant was that when the whole fiction comes crashing down (editorializing here) that the people who get rich will be those that get out first. Those who can’t get out will be owed because there simply doesn’t seem to be enough real dollars backing up the exchanges. For real wealth to be gained you want liquidity and you want to have healthy demand for the underlying product. What people want here is not actual bitcoins (or other cryptos). They want appreciation in value. However, while the prices are inflating a lot, it seems that enough people are trying exit positions to USD that the exchanges are having trouble getting enough cash to facilitate transactions. If that all ends, the fixed sum of dollars in the exchanges will be the zero sum. Those that get out first will get it, and those that don’t will be SOL.
- root_axis 9y agoNothing is created when someone exchanges blockchain tokens for money or the reverse.