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You're missing the point completely. A product needs to be produced. When somebody buys a product, the money pays for the production costs, so the producer is
by lottin 6y ago
You're missing the point completely. A product needs to be produced. When somebody buys a product, the money pays for the production costs, so the producer is compensated for the expenses as well as the invested capital, so that they can continue to produce more products. This incentivises the production of goods that the public wants. That's distinctively different from what happens when somebody buys a bitcoin. The supply of bitcoins is fixed which means buying a bitcoin can't possibly incentivise the production of more bitcoins. The money doesn't pay for production costs, it doesn't pay for taking the risk to produce something, or for having contributed anything to society. It's purely and simply giving money to somebody for having bought bitcoin earlier than you. If you're fine with that, sure, buy bitcoin. If you don't, or if you want to penalise people who own bitcoins, steer clear of it (this is what I recommend).
- randomhodler84 6y agoI think you might not quite understand how this works. 21 million bitcoin are slowly released until the year 2140. They are released more slowly every 4 years as the reward per block halves. The bitcoin is produced, mined, sold, paying for its creation. As more people want it (demand), and thus more people want to make it (supply) the network adjusts so they cost more energy to produce, ensuring they keep mining until 2140. There is indeed an incentive model at work here. It appears to work very well (on a scale of 10years out of 130+). What you might be thinking of is stuff that was invented out of thin air, “instamined” like a ethereum, ripple, or other Proof of Stake coins (bad, for some of the reasons you have outlined). Fair launch, no premine Proof of work coins are as close as you can get to a digital commodity.
- lottin 6y agoNo, I do understand how bitcoin "mining" works. The supply of bitcoin is technically not fixed (although it will be in the future), but inelastic, which, for the purposes of the argument I was making, is the same thing. The fact that it's an environmental disaster is another reason not to buy IMO.
- randomhodler84 6y agoI’m sorry you are hung up on the energy thing, and I’m not going to continue to argue or rehash that point. I wish you luck.
- joe_momma 6y agoYou got shut down on every point except for the environmental mining. FeatherCoin it is.
- lottin 6y agoI got shut down on every point?