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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, presumab

by 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

by abeppu 4y ago

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