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You’re not describing a zero-sum game. Someone “holding the bag” means nothing—from your understanding, investing in the $SPY would be a zero-sum game as well.

You’re not describing a zero-sum game. Someone “holding the bag” means nothing—from your understanding, investing in the $SPY would be a zero-sum game as well. Well, it’s not. Unless you think the entire value of our entire world economy will become zero. Merely predicting that the value of something will become zero doesn’t automatically make it zero-sum. In order for a game to be zero-sum, that requirement must be built into the rules of the game. That isn’t true in either of these cases (Bitcoin nor $SPY). From https://en.wikipedia.org/wiki/Zero-sum_game https://en.wikipedia.org/wiki/Zero-sum_game (emphasis added): > Zero-sum games are a specific example of constant sum games where the sum of each outcome is always zero. Such games are distributive, not integrative; the pie cannot be enlarged by good negotiation.

onethought 5y ago
Investing in the $SPY would not at all be a zero sum, because the value invested would be converted ultimately into something of real experiential value (in the form of the goods and services produced by the underlying companies), rather than Bitcoin which by definition is only ever an exchange of value. It is precisely that difference which (I think) makes it zero-sum
- theli0nheart 5y ago
  > … Bitcoin which by definition is only ever an exchange of value. Even if this was true (it is not) this still does not make an exchange of Bitcoin a zero-sum game. I’ll prove it. Let’s first denominate value in BTC to simplify this. I then mine one Bitcoin with less than 1 BTC-worth of energy (I wouldn’t mine it, otherwise). I now have 1 - (cost of energy) BTC, I then give my BTC to someone else in exchange for a Widget. I now have a Widget, and they have a non-zero amount of BTC. At no point are the sum of our two assets equal to zero, and they never could be. This could never be a zero-sum game, either by definition or in practice. There is always a non-zero net value after adding up all assets and debts between all of the players. My background: I studied Applied Math in college, with a focus in finance, game theory, and computer science. I studied games and game theory extensively.
  - onethought 5y ago
    Just to be clear though, there is not a whole lot of places you can transact from Bitcoin to goods and services. Those that do accept it, pin it to the usd… so Bitcoin is only used as an exchange of value for USD. That is still zero sum. $1 in $1 out You are correct mining is at least surface level not zero sum. If you apply the assumption that the energy, computing equipment and time were worth less than the resulting btc. But given the fact it has no intrinsic value… is only valuable in exchanging between fiats… I don’t think those assumptions hold.

onethought 5y ago

Investing in the $SPY would not at all be a zero sum, because the value invested would be converted ultimately into something of real experiential value (in the form of the goods and services produced by the underlying companies), rather than Bitcoin which by definition is only ever an exchange of value. It is precisely that difference which (I think) makes it zero-sum

theli0nheart 5y ago
> … Bitcoin which by definition is only ever an exchange of value. Even if this was true (it is not) this still does not make an exchange of Bitcoin a zero-sum game. I’ll prove it. Let’s first denominate value in BTC to simplify this. I then mine one Bitcoin with less than 1 BTC-worth of energy (I wouldn’t mine it, otherwise). I now have 1 - (cost of energy) BTC, I then give my BTC to someone else in exchange for a Widget. I now have a Widget, and they have a non-zero amount of BTC. At no point are the sum of our two assets equal to zero, and they never could be. This could never be a zero-sum game, either by definition or in practice. There is always a non-zero net value after adding up all assets and debts between all of the players. My background: I studied Applied Math in college, with a focus in finance, game theory, and computer science. I studied games and game theory extensively.
- onethought 5y ago
  Just to be clear though, there is not a whole lot of places you can transact from Bitcoin to goods and services. Those that do accept it, pin it to the usd… so Bitcoin is only used as an exchange of value for USD. That is still zero sum. $1 in $1 out You are correct mining is at least surface level not zero sum. If you apply the assumption that the energy, computing equipment and time were worth less than the resulting btc. But given the fact it has no intrinsic value… is only valuable in exchanging between fiats… I don’t think those assumptions hold.