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This is all just crazily, pants-on-head wrong. Like, sure, on a whole-economy level, if nobody is creating value, then the economy isn't growing. But you aren

This is all just crazily, pants-on-head wrong. Like, sure, on a whole-economy level, if nobody is creating value, then the economy isn't growing. But you aren't buying the whole economy, you're buying an asset, and that asset just needs to be desired in order for it to increase in value. There is no function where "if I gain money from BTC, you have to lose money from BTC." That's just... not at all how this works.

abeppu 4y ago
I wonder if we're somehow talking about different things. If you realize gains from BTC, it's because you sold it to someone else who bought your BTC, presumably with dollars, yes? The crazy stipulation of "token price monotonically increases" for some crypto currency implies that people are actually exchanging ever larger quantities of some other currency for that asset. Of course this means that the other currency is losing value. When the dollar goes up against the pound, or vice versa, no one thinks it's because some magical process is creating net wealth.
- aetherson 4y ago
  You're conflating two different things. One is "what moves the price of an asset." What moves the price of an asset is supply and demand. In the case of BTC, the supply is (generally) predictable and limited (though I guess someone could reclaim one of those early big wallets that are assumed to be lost forever or something). So demand dominates the BTC price. Note that this is completely irrespective of whether Bitcoin does or does not generate real economic value (like, the production of more goods or services that directly improve the lives of other people). If the economy as a whole (in terms of, now, real value that is actually delivered to people's lives) is shrinking or stable, then for Bitcoin to be increasing in value, something else has to be shrinking in value. But if the economy as a whole is growing, then it is possible for some of that growth to land in Bitcoin such that everyone with Bitcoin is better off than before, and nobody is worse.
  - cuteboy19 4y ago
    >But if the economy as a whole is growing, then it is possible for some of that growth to land in Bitcoin such that everyone with Bitcoin is better off than before, and nobody is worse Not true. Value gain=Revenue-Costs. Revenue for Bitcoin as a whole is 0. Costs are positive. Therefore it is negative sum. Compare with Coca cola stock. Revenue>Cost. So it is positive sum. Notice that there is no "cosmological constant" term. The rest of the universe gaining or losing value has no bearing on a specific stock or crypto
pencilguin 4y ago
Maybe you are not clear on what "zero sum" means? But of course bitcoin is technically negative-sum, because miners don't pay in, but do cash out. And, some fraction of coin is lost and so not cashed out. Whoever can't cash out donated their stake. When it gets where it has been more or less constantly falling for long enough, and everybody wants out, it will fall at an increasing rate, and everybody still holding donated their stake, too.

abeppu 4y ago

I wonder if we're somehow talking about different things. If you realize gains from BTC, it's because you sold it to someone else who bought your BTC, presumably with dollars, yes? The crazy stipulation of "token price monotonically increases" for some crypto currency implies that people are actually exchanging ever larger quantities of some other currency for that asset. Of course this means that the other currency is losing value. When the dollar goes up against the pound, or vice versa, no one thinks it's because some magical process is creating net wealth.

aetherson 4y ago
You're conflating two different things. One is "what moves the price of an asset." What moves the price of an asset is supply and demand. In the case of BTC, the supply is (generally) predictable and limited (though I guess someone could reclaim one of those early big wallets that are assumed to be lost forever or something). So demand dominates the BTC price. Note that this is completely irrespective of whether Bitcoin does or does not generate real economic value (like, the production of more goods or services that directly improve the lives of other people). If the economy as a whole (in terms of, now, real value that is actually delivered to people's lives) is shrinking or stable, then for Bitcoin to be increasing in value, something else has to be shrinking in value. But if the economy as a whole is growing, then it is possible for some of that growth to land in Bitcoin such that everyone with Bitcoin is better off than before, and nobody is worse.
- cuteboy19 4y ago
  >But if the economy as a whole is growing, then it is possible for some of that growth to land in Bitcoin such that everyone with Bitcoin is better off than before, and nobody is worse Not true. Value gain=Revenue-Costs. Revenue for Bitcoin as a whole is 0. Costs are positive. Therefore it is negative sum. Compare with Coca cola stock. Revenue>Cost. So it is positive sum. Notice that there is no "cosmological constant" term. The rest of the universe gaining or losing value has no bearing on a specific stock or crypto

pencilguin 4y ago

Maybe you are not clear on what "zero sum" means? But of course bitcoin is technically negative-sum, because miners don't pay in, but do cash out. And, some fraction of coin is lost and so not cashed out. Whoever can't cash out donated their stake. When it gets where it has been more or less constantly falling for long enough, and everybody wants out, it will fall at an increasing rate, and everybody still holding donated their stake, too.