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I had a big problem with his interview. It does not mention bitcoin's reliance on "demand". If you look at bitcoin as a closed system and realize that money tha

by groone 6y ago

I had a big problem with his interview. It does not mention bitcoin's reliance on "demand". If you look at bitcoin as a closed system and realize that money that goes in also goes out. The cash from your bank account is transferred to early adopters and used to pay for the huge electricity bills. It does not get stored. It is not there. You cannot get it out. Unless you find a greater fool to buy some bitcoin at higher price. You cannot find greater fools forever, so bitcoin as a system is unsustainable. When people stop believing there will be someone to relieve them the price will go up they stop buying. When that happens and money stops coming, the doors are shut and you are stuck with worthless bitcoin.

scottmsul 6y ago
The way I see it, dollars and bitcoin are two competing forms of money. To calculate the equilibrium market cap of bitcoin, multiply each person's net worth by the fraction they wish to allocate to bitcoin and sum over the population. For example if the total value of all goods is 200T and the net-worth weighted allocation fraction is 1%, then the equilibrium market cap would be 2T. You don't need "greater fools" because people are constantly buying and selling in equilibrium, not just selling, similar to how gold maintains a pretty steady 10T market cap. However bitcoin has superior intrinsic monetary properties to all other stores of value, including gold, so the equilibrium market cap might be extremely high.