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There's only so much that my dog can poop per day. Some of the poop gets lost when I scoop it off the sidewalk. And eventually he will die and not poop any more
by xyzelement 6y ago
There's only so much that my dog can poop per day. Some of the poop gets lost when I scoop it off the sidewalk. And eventually he will die and not poop any more. Thus my dog's turds are a deflationary store of value but I wouldn't say "it makes sense to invest in some."
Disclosure - I made up the dog.
- thebean11 6y agoThe dismissiveness of (presumably) otherwise thoughtful people on this forum still surprises me. Do you really find that comparison valuable in evaluating the tech?
- xyzelement 6y agoI was looking to make a finance, not tech point. Specifically that there are many things that are finite and "deflationary" but obviously without value. Point being that the scarcity argument of bitcoin is on its own not persuasive. I used the cheeky example of dog poop because I though it was cute but I guess it was"too cute" and obscured the point.
- Calamity 6y agoI think your point was made and those who are actually listening have understood it ;) I think your analogy does a good job in conveying the point that deflationary =/= valuable. Almost ironically, having a deflationary system is something one would really like to avoid if you thought about it. It only rewards hoarding. The king, with his hoard of gold, only grow's richer by the year. As long as he is cash flow positive, the supply upon which the peasants rely on to trade shrinks and therefore the value of each grain increases. I, for one, don't think this system is one we should be rushing to return to.
- jcpham2 6y agoDon’t confuse deflationary with the lack of fungibility. No physical currency can be divided into 10 million pieces, no one has a crystal ball.
- Calamity 6y agoI'm not sure I follow? If one year an apple costs 2 gold coins, but next year, that same apple costs only 1 gold coin - this would be deflation. I'm still trading gold coin(s) for an apple (fungible), it's just that the currency itself got stronger against the asset I wanted to purchase.
- jcpham2 6y agoRight, because mathematics-wise the deflating asset (if we’re picking on bitcoin specifically) is programmed to do so until 2040 or so when the block rewards run out for miners. The currency (or asset) will continue to outperform the dollar or any fiat currency because it is setup that way to scale inversely and inverted-like through the magic of fungibility. No one no where ever created a means of trade accurate to the ten millionth. Go look it up I’ll wait. Just because something scales inversely to your currency that doesn’t make it a ponzi, it makes it mathematically and theoretically possible; as the market itself has proven for nearly a decade.
- randomopining 6y agoYeah deflationary is dumb but not bad when there’s also population deflation. If millennials invest in btc before boomer pensions get in, it’ll be a needed transfer of wealth. If there’s a deflationary asset wave, each person is incentivized to get in early. Which I think is what is happening. Although I think one huge hack or whale unloading could drop the trust in Bitcoin for years.
- FabHK 6y agoIt was not dismissive, it was refuting the specific contention that something scarce and of limited supply is ipso facto valuable.
- dwaltrip 6y agoI get it isn't a terribly serious example, but I can't help myself... Your dog shit tokens are vulnerable to "counterfeiting", as poop from other dogs would be practically indistinguishable.
- FabHK 6y agoDNA analysis would fix that. Incidentally, I hear that there are all these forks and clones of BTC, many of which have strictly limited supply. So, they are also valuable long term investments, I assume?
- dwaltrip 6y agoThe forks aren't widely used and there doesn't seem to be much reason to switch from bitcoin to them. Network effects are quite important here.
- mythrwy 6y agoIt's ok. Made up dog turds are the best kind.