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Person A has burger. Person B borrows A’s burger and sells it to Person C. Person D borrows Person C’s burger and sells it to Person E. Still seems to work? T
by codyb 6y ago
Person A has burger.
Person B borrows A’s burger and sells it to Person C.
Person D borrows Person C’s burger and sells it to Person E.
Still seems to work? Then, tomorrow Person B and Person D owe burgers to Person A and Person C.
If there is only one burger in existence, this will create demand pulling prices up I’d think.
- bveb33 6y agoThis is where the burger analogy breaks down in my opinion because it's a lot harder to deliver a fraudulent burger than a digital signature. What can happen in real life is Person A and Person C are given a digital receipt confirming delivery of the burgers they were owed and that is the end of the transaction. To shield themselves from revealing potential fraud, the brokerage will charge a $500 fee if either of them ask for proof of their burger. Now, while there may only be one burger in existence, it appears as though there are two, keeping demand artificially flat.