4 ms·

"At any point in time — past, present, or future — the people who have ever bought bitcoins, considered as a whole, have put into the game more money than they

by Elzear 5y ago

"At any point in time — past, present, or future — the people who have ever bought bitcoins, considered as a whole, have put into the game more money than they have got back." Are you claiming that this sentence is false?

keymone 5y ago
is it not? only tiny fraction of bitcoin's lifetime -- two months out of 12 years -- has it been at higher levels than today.
ta1234567890 5y ago
That’s true. And it’s also true for any stock that doesn’t pay dividends as well. Should people not invest in those stocks? Or should we ban non-dividend stocks for being Ponzi schemes?
- randomsearch 5y ago
  I believe that the missing point there is the expectation that those stocks will _eventually_ pay dividends.
  - mastermojo 5y ago
    I don't think (in my lifetime) I've heard anyone discuss buying or selling a stock in the context of a Dividend Discount Model. This observation isn't really in support of Bitcoin, it's more of a depressing thought that our stock markets are closer to a Keynesian beauty contest. (GME, AMC, etc). I don't personally own stocks or real estate for cash flow purposes. I own them with the expectation that I can sell them for more money down the line.
    - randomsearch 5y ago
      > I've heard anyone discuss buying or selling a stock in the context of a Dividend Discount Model. Pension funds.
- arcticbull 5y ago
  That's not accurate. Dividends are just one of the many ways that companies accrue value. Companies use revenues to invest in the business, to repurchase shares and also to issue dividends. This net welfare accretion must be considered in its totality. Just because a company doesn't issue dividends doesn't make it a Ponzi scheme, and it doesn't make it a zero sum investment (like precious metals) or an negative sum investment (like PoW coins and to a lesser extent, most (all?) other coins). “In the short run, the market is a voting machine, but in the long run, it is a weighing machine”
- JediLuke 5y ago
  At least stocks/companies have a balance sheet with real assets. Even if the whole company shut down (and wasn’t bankrupt) investors would still get at least some of their money back after liquidation.
- deleted 5y ago
  [deleted]
BenoitP 5y ago
This is compatible with Bitcoin being a store of value. If velocity stays low, the price will continue to go up.
pcthrowaway 5y ago
Let's consider this in the context of another currency, say, the Euro. "At any point in time - past, present, or future - the people who have ever bought Euros [with real currency, aka every other fiat], considered as a whole, have put into the game more money than they have got back." Now the Euro is heavily traded in forex markets, and surely the price fluctuates. Is this statement true? I'd suspect yes, though there are many other factors at play. Has the value of Euro increased relative to the other currencies it trades against? If so, this is probably due to large amounts of money pouring into it as a more lucrative asset than the quote currency. I think this question really only makes sense using another currency as a reference. So let's consider the Zimbabwe dollar during its period of hyperinflation (2007-2009). In this case, citizens of Zimbabwe who bought Euros very likely got back more of whatever currency they eventually converted it to than they would have if they had kept their money in Zimbabwe dollars. But what does this even mean. There is no 'stable' currency to use as a true reference, the value of each in the global market is constantly fluctuating. 'Getting less or more money back' becomes hard to evaluate. So let's talk about purchasing power instead. I suspect the people who have ever bought into bitcoins as a whole, have increased their purchasing power (the number of coca-cola's they can theoretically buy on any given day).
- arcticbull 5y ago
  > Now the Euro is heavily traded in forex markets, and surely the price fluctuates. Is this statement true? It is not true, because currencies aren't assets. Currencies are a medium of exchange. Their job is to hold value for only as long as it takes you use them to buy necessities or invest them in assets. That's it. Any longer is a non-goal. Goals include low transaction costs, high transaction speed, fungibility, stability and predictability. As for the FOREX market, that's a highly leveraged speculative trade on the relative purchasing power of a pair of currencies. That's not an investment and it's certainly not an asset. With that in mind FOREX is widely regarded as a zero-sum market in the same way options and futures are. Money from the winners goes to pay off the losers. > In this case, citizens of Zimbabwe who bought Euros very likely got back more of whatever currency they eventually converted it to than they would have if they had kept their money in Zimbabwe dollars. This would have been a zero sum trade, not negative sum. Zero sum doesn't mean reversible or that there aren't winners and losers, just that considered as a whole, between all participants, no money left the system and no money entered - what was there was simply redistributed.

by Elzear 5y ago

keymone 5y ago

is it not? only tiny fraction of bitcoin's lifetime -- two months out of 12 years -- has it been at higher levels than today.

ta1234567890 5y ago

That’s true. And it’s also true for any stock that doesn’t pay dividends as well. Should people not invest in those stocks? Or should we ban non-dividend stocks for being Ponzi schemes?

randomsearch 5y ago
I believe that the missing point there is the expectation that those stocks will _eventually_ pay dividends.
- mastermojo 5y ago
  I don't think (in my lifetime) I've heard anyone discuss buying or selling a stock in the context of a Dividend Discount Model. This observation isn't really in support of Bitcoin, it's more of a depressing thought that our stock markets are closer to a Keynesian beauty contest. (GME, AMC, etc). I don't personally own stocks or real estate for cash flow purposes. I own them with the expectation that I can sell them for more money down the line.
  - randomsearch 5y ago
    > I've heard anyone discuss buying or selling a stock in the context of a Dividend Discount Model. Pension funds.
arcticbull 5y ago
That's not accurate. Dividends are just one of the many ways that companies accrue value. Companies use revenues to invest in the business, to repurchase shares and also to issue dividends. This net welfare accretion must be considered in its totality. Just because a company doesn't issue dividends doesn't make it a Ponzi scheme, and it doesn't make it a zero sum investment (like precious metals) or an negative sum investment (like PoW coins and to a lesser extent, most (all?) other coins). “In the short run, the market is a voting machine, but in the long run, it is a weighing machine”
JediLuke 5y ago
At least stocks/companies have a balance sheet with real assets. Even if the whole company shut down (and wasn’t bankrupt) investors would still get at least some of their money back after liquidation.
deleted 5y ago
[deleted]

BenoitP 5y ago

This is compatible with Bitcoin being a store of value. If velocity stays low, the price will continue to go up.

pcthrowaway 5y ago

Let's consider this in the context of another currency, say, the Euro. "At any point in time - past, present, or future - the people who have ever bought Euros [with real currency, aka every other fiat], considered as a whole, have put into the game more money than they have got back." Now the Euro is heavily traded in forex markets, and surely the price fluctuates. Is this statement true? I'd suspect yes, though there are many other factors at play. Has the value of Euro increased relative to the other currencies it trades against? If so, this is probably due to large amounts of money pouring into it as a more lucrative asset than the quote currency. I think this question really only makes sense using another currency as a reference. So let's consider the Zimbabwe dollar during its period of hyperinflation (2007-2009). In this case, citizens of Zimbabwe who bought Euros very likely got back more of whatever currency they eventually converted it to than they would have if they had kept their money in Zimbabwe dollars. But what does this even mean. There is no 'stable' currency to use as a true reference, the value of each in the global market is constantly fluctuating. 'Getting less or more money back' becomes hard to evaluate. So let's talk about purchasing power instead. I suspect the people who have ever bought into bitcoins as a whole, have increased their purchasing power (the number of coca-cola's they can theoretically buy on any given day).

arcticbull 5y ago
> Now the Euro is heavily traded in forex markets, and surely the price fluctuates. Is this statement true? It is not true, because currencies aren't assets. Currencies are a medium of exchange. Their job is to hold value for only as long as it takes you use them to buy necessities or invest them in assets. That's it. Any longer is a non-goal. Goals include low transaction costs, high transaction speed, fungibility, stability and predictability. As for the FOREX market, that's a highly leveraged speculative trade on the relative purchasing power of a pair of currencies. That's not an investment and it's certainly not an asset. With that in mind FOREX is widely regarded as a zero-sum market in the same way options and futures are. Money from the winners goes to pay off the losers. > In this case, citizens of Zimbabwe who bought Euros very likely got back more of whatever currency they eventually converted it to than they would have if they had kept their money in Zimbabwe dollars. This would have been a zero sum trade, not negative sum. Zero sum doesn't mean reversible or that there aren't winners and losers, just that considered as a whole, between all participants, no money left the system and no money entered - what was there was simply redistributed.