3 ms·

Not really though because they would have a lot of trouble converting all those coins to another currency at that exchange rate. Once they started selling, dema

Not really though because they would have a lot of trouble converting all those coins to another currency at that exchange rate. Once they started selling, demand at that price would be met and the bidding price would fall.

colejohnson66 7y ago
That argument doesn’t really work. Measuring coins in their current value, not their theoretical value is used in other situations too. Specifically stocks. You can possibly sell $1b of stocks and expect to get $1b.
- Swenrekcah 7y ago
  Except that you can. It will take some time and/or you need to do some work to find buyers, but people can and do. Because (most) stocks are backed by real world companies that have real world value.
ivalm 7y ago
More like 100M * 100 = 10 B < Gates
smabie 7y ago
Sure, but mark-to-market is a commonly used method of valuing assets. Of course what you’re saying is true, but there’s nothing inherently wrong with valuing a portfolio like this. Even with real currency, you can’t directly measure value in another currency for the reasons you gave. So it’s probably just a better idea to ignore slippage and bid-ask bread when talking about value.
- est31 7y ago
  There is a difference though: Google isn't built on a scam. While another dot com boom isn't impossible, it's still not very likely that it will happen in the near future. So your Google cofounder with tons of Google shares can divest from them over a period of decades, building themselves a diverse portfolio. A pyramid scheme currency only has very short lived and temporary value. Thus you need to exit before the scam is detected. The faster you try to exit though, the more the effect that GP mentioned becomes relevant. Anyways, even if she had managed to exit with a large stash of money, she'd still have to keep it out of reach from the government authorities, lawyers, etc. So even if she owned $1B momentarily, it wouldn't be of much worth to her if she (rightfully) lost it all again in 4 years plus interest. That's why criminals have such an extravagant lifestyle: they can't think long term because long term they might be in prison, killed by another criminal, etc. Same goes for rich people in authoritarian regimes: the moment they fall out of favour, their money is gone, so often they want to get it out of the country before the tides turn on them.

colejohnson66 7y ago

That argument doesn’t really work. Measuring coins in their current value, not their theoretical value is used in other situations too. Specifically stocks. You can possibly sell $1b of stocks and expect to get $1b.

Swenrekcah 7y ago
Except that you can. It will take some time and/or you need to do some work to find buyers, but people can and do. Because (most) stocks are backed by real world companies that have real world value.

ivalm 7y ago

More like 100M * 100 = 10 B < Gates

smabie 7y ago

Sure, but mark-to-market is a commonly used method of valuing assets. Of course what you’re saying is true, but there’s nothing inherently wrong with valuing a portfolio like this. Even with real currency, you can’t directly measure value in another currency for the reasons you gave. So it’s probably just a better idea to ignore slippage and bid-ask bread when talking about value.

est31 7y ago
There is a difference though: Google isn't built on a scam. While another dot com boom isn't impossible, it's still not very likely that it will happen in the near future. So your Google cofounder with tons of Google shares can divest from them over a period of decades, building themselves a diverse portfolio. A pyramid scheme currency only has very short lived and temporary value. Thus you need to exit before the scam is detected. The faster you try to exit though, the more the effect that GP mentioned becomes relevant. Anyways, even if she had managed to exit with a large stash of money, she'd still have to keep it out of reach from the government authorities, lawyers, etc. So even if she owned $1B momentarily, it wouldn't be of much worth to her if she (rightfully) lost it all again in 4 years plus interest. That's why criminals have such an extravagant lifestyle: they can't think long term because long term they might be in prison, killed by another criminal, etc. Same goes for rich people in authoritarian regimes: the moment they fall out of favour, their money is gone, so often they want to get it out of the country before the tides turn on them.